Time running out for retail logistics dinosaurs

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I suspect that you don’t really need to be told that e-commerce is booming, but a new study highlights some of the problem areas for retailers.

Malory Davies FCILT, Editor.

Malory Davies FCILT, Editor.

The “2017 E-Commerce Fulfilment Report” from Peoplevox found sales of 82 per cent of the e-commerce and multichannel businesses taking part had increased in 2016. Only six per cent reported a decrease in orders.

However more than half, (53 per cent) were not happy with their fulfilment and warehouse operations some 64 per cent admitted to not shipping on time, with 34 per cent citing stock-outs as a major reason.

And four out of five accepted that additional costs for carriage, customer service and warehouse labour, was an inevitable cost of order fulfilment. One in five said they did not know the cost of shipping mistakes.

Overall, 24 per cent said purchasing and forecasting was the area most needing improvement this year.

According to the IMRG, UK online retail sales are currently growing at more than 14 per cent a year. The average basket value in April was £98 – up from £79 a year ago.

“Fundamental warehouse and fulfilment issues need to be addressed before they grow into more serious problems that may risk customer loyalty,” says Peoplevox chief Jonathan Bellwood.

Clearly, there is a lot to play for. There was a time when it was possible to regard e-commerce as a useful add-on to the core store business. That has long since ceased to be the case. E-commerce is a core retail process and those that are failing to manage its logistics effectively are surely going the way of the dinosaurs.

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