Online retailers and brick-and-mortar stores are trying to hit all of the fulfillment channels. How will sustainability fare?
A few years ago, “showrooming” – in which a customer checks out a product at a physical store and then buys it from a different business online – looked like the harbinger of doom for brick-and-mortar retailers.
“ Multichannel fulfillment is one of the top issues shaking up e-commerce today.”
Now it’s common for customers to research items at home and then head out to buy them at a shop.
Consumers decide to go to a store for multiple reasons, including handling an item before they buy it, eliminating shipping costs and reducing the time it takes to get the product.
This trend may be great news for retailers by creating new sales opportunities, but it has also created new challenges as businesses develop multichannel strategies.
First is the matter of up-to-date inventory data. Shoppers should be able to determine online if an item they want is available at a local store, yet that information is not always available in real time. The second challenge is to provide a consistent and quality customer service experience across all channels.
Multichannel fulfillment is one of the top issues shaking up e-commerce today. As consumers become more comfortable with in-store pickups, companies must figure out ways to efficiently satisfy demand.
In-store pickups pick up
At the moment, consumer demand for in-store pickups is outpacing retailers’ abilities.
JDA Software Group surveyed 1,000 U.S. shoppers in 2015 and found that of the 35 percent who bought online products and tried to pick them up in stores, about 50 percent ran into problems.
One complaint is subpar customer service, which can be tied to overworked in-store employees who now have to handle online orders in addition to their regular jobs.
“A lot of it has to do with training store operators,” says Sucharita Mulpuru, an analyst with Forrester Research. “They may be doing 10 other things in the store.”
“ Consumer demand for in-store pickups is outpacing retailers’ abilities.”
According to 2015 research from UPS and comScore Inc, 48 percent of customers surveyed used ship-to-store or store pickup services. This trend is expected to continue as 41 percent of customers plan to use those methods more often in the coming year.
Shoppers are looking for convenient pickup options that meet their fast-paced lifestyles.
According to the research, one in three online shoppers prefer to have packages delivered to places other than their homes and 52 percent are interested in shipping to an alternative location with extended hours and lower fees.
New options available include UPS Access Point locations, which are local businesses where shoppers can pick up items they bought online in their neighborhood.
This method can lower a package’s carbon footprint by consolidating deliveries. Plus it prevents unsuccessful deliveries, which waste fuel.
Going small: the big payoff
It can be argued that shopping online is more sustainable than shopping at a brick-and-mortar location, especially for suburban shoppers who own nonelectric cars.
A report by the MIT Center for Transportation & Logistics arrived at this conclusion while also adding that retailers can still improve the overall carbon footprint of their supply chain.
Ed Rogers, UPS’s senior director of global sustainability, says downsizing packaging sizes can have a big impact. When small items are shipped in large boxes, they take up more cubic inches of space in planes, trains and trucks.
“Multiply that by millions of packages, and the result is fewer packages per vehicle,” says Rogers. “That translates into extra vehicles in the air and on the ground, extra miles flown or driven, and extra fuel consumed.”
Another recent innovation that saves fuel and miles is invisible to consumers. In 2012, UPS started deploying ORION, its proprietary route optimization platform that uses package data, algorithms and custom delivery maps to help drivers determine the most efficient way to deliver packages.
“This means we can reduce miles, fuel, idle time and greenhouse gas emissions without sacrificing any part of our service to customers or commitments to the environment,” Rogers says.
The system, which took a decade to develop, will be fully deployed to more than 55,000 U.S. drivers by the end of 2016.
When ORION is fully implemented in 2016, it is expected to save 100 million driving miles annually, with a 100,000 metric-ton reduction in carbon dioxide emissions. That’s the same impact as removing 21,000 cars from the road.
Today, what had once been considered non-negotiable – the delivery location – is now becoming customizable. This further blurs the line between e-commerce and traditional retail.
As the popularity of webrooming shows, online sales won’t spell the end of brick-and-mortar retailing. Instead, they offer the possibility to enhance the experience by giving consumers more flexibility and choices.
This article originally appeared on The Guardian on April 19, 2016, and was republished with permission.
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