No more getting away with it

According to some recent global market research that Peoplevox commissioned, “The 2017 E-Commerce Fulfilment Report”, 82% of the e-commerce and multichannel businesses surveyed had increased sales in 2016, with only 6% reporting a decrease in orders.

A total of 154 respondents from a variety of countries took part in the survey during the first quarter of 2017. Approximately 70% of businesses are UK/Ireland based and 10% are in the USA. They work in organisations predominantly identified as either multi-channel retailers (31%); online only (21%); or marketplace resellers (13%). Approximately 80% have turnovers of £1-25M with 12% in excess of £100M. The majority (58%) have been operating for at least 7 years with fewer than 3% under a year. 

While many respondents voiced concerns over increasing competition, Brexit and currency fluctuations, the majority (88%) expected a further increase in orders during 2017. 

Clearly, from the survey findings, business is booming for online retailers. However, our study identified a number of growing pains which will become increasingly challenging for e-commerce and multichannel businesses as they continue to expand rapidly.

It is telling that just 53% of respondents said they were happy with their fulfilment and warehouse operations. In fact, Purchasing and Forecasting was highlighted as the most common challenge overall with almost a quarter (24%) saying this was the one area requiring the most improvement in 2017.

Furthermore, many of those businesses questioned (63%) admitted to not always shipping on time with 34% citing the unavailability of stock being a key reason. And when it came to rectifying shipping errors, the majority (80%) appeared accepting of the additional carriage, customer service and warehouse labour expenses as an inevitable cost of order fulfilment. 1 in 5 admitted to not knowing the cost of shipping mistakes.

Moreover, the majority (78%) of businesses questioned also found meeting the additional demand for orders at peak times an ongoing challenge in 2016, with just over half (52%) resorting to hiring temporary staff. Paying overtime to existing staff and pulling in staff from other parts of the business were other common solutions.

First and foremost, in this super-competitive era of E-commerce fulfilment retailers can no longer afford to paper over the cracks. With expectations of next day/same day delivery, customers just won’t accept the apparent inability of online businesses to accurately ship on time, every time, or inadvertently sell items that just aren’t available.

These fundamental warehouse and fulfilment issues need to be addressed before they grow into more serious problems that may risk customer loyalty, cause increases in the number of returns, a failure to maximise available sales opportunities, and an escalation in avoidable overheads.

Interestingly, 62% of respondents said their business already used a WMS, but of the 70% of those that don’t, ‘will not’ or ‘may not’ implement such a system in 2017 said it was due to reasons of complexity, unclear benefits, or believing their business just isn’t ready.

However, specific business challenges or key IT events appear to impact directly on a retailer’s decision to invest in a dedicated WMS platform. 40% stated that an increase in picking errors was the main reason they would or had implemented a WMS while other common reasons included sales growth, warehouse expansion, or the implementation of new e-commerce platforms or ERP systems. Just over 10% said poor online ratings had also inspired a move towards implementing a WMS.

For those still without, or delaying investment in the latest technology, affordable, fit for purpose e-commerce fulfilment solutions are now readily available. It’s now high time, and easier than ever, to equip e-commerce warehouses with the technology necessary for maximising productivity, accuracy and profitability.

Download the 2017 E-Commerce Fulfilment report