Retailers are finding the burdens of fulfilling online orders across multiple channels a drag on profits, according to a new study from JDA Software Group, Inc. Its new report, Omni-Channel Fulfillment Imperative, relies on a global survey conducted by PwC of more than 400 retail and consumer goods CEOs, which found 67% of respondents facing rising fulfillment costs. Only 16% of companies say they can fulfill omnichannel demand profitable today.
The highest costs associated with omnichannel selling included:
- Handling returns from online and store orders (cited by 71% of respondents)
- Shipping directly to customers (67%)
- Shipping to the store for customer pick-up (59%)
CEOs rated the fulfillment capability needing the most attention was transportation and logistics. It was a priority for the future for 88% of the CEOs that responded. Improving inventory availability to fill orders came in second, cited by 85%.
The retailers have the physical assets to make fulfillment successful, but may lack the analytic tools for doing so. JDA explained that receipt of an online order necessitates a choice. Will the retailer take the product from a local store or a centralized warehouse or ship it directly from the brand?
Recognizing that their current fulfillment approach is inefficient is not the same thing as accepting its shortfalls. Seventy-on percent of the CEO’s ranked omnichannel fulfillment as either a high or a top priority. They planned to invest in improved fulfillment capacity in 2015.