Multi-channel retail falling down on fulfilment, warns study

Retailers are increasingly focused on multi-channel operations, says a new report, but they are failing to get the fulfilment processes right to deliver on their service promises. 

The study, “Multi-channel matters: a route to next generation retailing”, was commissioned by DHL Supply Chain and produced by think tank FreshMinds.

It found that 69 per cent of retailers said that having a multi-channel operation was very important or essential to their business. Some 25 per cent said the biggest growth opportunity for their organisation lay in establishing new channels to market.

And nearly two thirds of those surveyed said they expected to start or grow e-commerce sales via own-brand web sites over the next three years, with 32 per cent expecting to invest most heavily in the e-commerce channel over the next 12 months.

M-commerce is set to take off as one in ten retailers plans to start selling via mobile applications or devices over the next three years. The report points to high street retailers such as Next, Warehouse and Barratts that have been creating mobile tools to allow consumers to access their products 24 hours a day.

But, the report warned that many retailers are failing to get fulfilment processes right to deliver on the service promises of their new websites.

“For example, while 45 per cent of retailers identify stock availability as the most serious issue they have faced over the past year, only 24 per cent have most heavily invested in making improvements to stock control. Stock availability issues are exacerbated by a move into a multi-channel strategy as retailers report difficulties in deciding which channel to prioritise, and in balancing variable demand between the channels with the customer expectation for an identical service from all channels,” the report says.

For some 63 per cent of the retailers in the survey, the heaviest investment over the past year has been in front-end processes. Asked about what influences overall consumer satisfaction, 31 per cent of retailers said product choice; 29 per cent chose staff knowledge and advice and 22 per cent chose website usability. Only 11 per cent highlight accurate and on-time delivery.

The report said this focus on the front end is a risk for retailers as they are failing to deliver back-end services that meet increasingly high consumer expectations for an easy and convenient retail experience.

The study is based on research out with 500 UK-based retailers plus analysis with professionals and academics within the sector.

John Boulter, managing director of non-food retail UK & Ireland at DHL Supply Chain, said: “Retailers must ensure they optimise the brand experience for their customers, so that not only are they able to interact with the brand through multiple channels, but they have a seamless retail experience, meaning the back-end processes are as tailored as front-end. Retailers must provide a consistent brand experience across all channel interactions.”