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Agile, flexible, scalable fulfilment operations

Editor Jonathan Wright introduces our whitepaper exploring how fulflment services can deliver the memorable experiences customers expect

The idea that fulfilment and logistics should be integral to the disciplines of merchandising, customer engagement and conveying brand values is, at first glance, counter-intuitive. This, surely, is a muddling of back-end operations and systems with the public face of retail.

So why would we link fulfilment with the customer experience in an eDelivery whitepaper? At root, it’s because of the nature of ecommerce and multichannel retail, and the way this has changed customer behaviour. Customers are increasingly likely to order online rather than buy items on the high street, more likely to shop around with the help of Google and Bing, and more likely to order multiple items before returning those they don’t want. Customers are demanding and expect to shop on their own terms. Retailers need to support this behaviour at the same time as differentiating themselves from competitors.

Without underestimating the importance of such facets of retail craft as website and app design or implementing carefully targeted marketing campaigns, retailers can’t achieve this just through honing their use of digital technologies. Customers’ real-world experiences matter too, whether that’s in the store or when a courier delivers a purchase to the home and after, as a customer first views a purchase. It’s no coincidence that forward-looking retail professionals are now talking less about multichannel or omnichannel but instead prefer the term ‘customer-centred retail’, which we can define as retail that flexes to meet the needs and demands of individual customers, whatever channel they may choose to shop in.

Our Beyond ‘In Stock’ whitepaper reflects this emerging thinking across the industry by focusing on the ways retailers can use fulfilment and logistics to improve the experience of their individual customers – more than this, potentially for fulfilment and logistics to be that all-important point of differentiation that does this through customer loyalty.

In the whitepaper, we consider three main areas in turn:

  • A single view of stock: how retailers can use visibility of stock across the whole estate to serve customers better

  • Flexible and bespoke: how retailers can make fulfilment services intrinsic to the customer experience

  • The home as showroom/the bedroom as changing room: how retailers can work with changing customer behaviour to drive sales

Informing our thinking on these issues, we conducted research aimed at considering how the infrastructure layer in a multichannel business can support the creation of impressive customer experiences – at scale and consistently.

If there is one central message we would want to share from this research, it is that fulfilment really is now essential to imparting brand values and to improving the customer experience. In the years ahead, generic fufilment services will become the exception rather than the rule. Retailers need to recognise this and plan accordingly.

Fulfilment and delivery as a way to differentiate the brand:

  • Asked to rank whether their company’s fulfilment and delivery experience offered a competitive advantage/differentiator from market competitors on a scale from zero to five, the average response was three

  • If respondents are ambivalent about whether the delivery experience reflects the brand, the message carries over here. The responses clustered around three, with a few outliers at either end of the scale

Improving the fulfilment and delivery experience during 2017:

  • Close to 90% of respondents saw it as important to improve the delivery and fulfilment experience in 2017

What the results suggest

The idea of fulfilment being central to the customer experience is familiar to many retail professionals. However, as we explore elsewhere in this whitepaper, it is an area where best practice is still developing as retailers refine their approaches – and in some cases make up ground. Were we to come back in a year and ask the same questions, our guess is we would see increasing sophistication of implementation around the ideas the whitepaper explores.

That’s not to be complacent, but we see clear signs the industry is beginning to respond to customer demands to be able to shop in ways that suits them and, from the retail side, to make meeting these demands a point of differentiation within fulfilment services.

The respondents

Our survey ran in 2017. From the supplied job titles:

  • Around 20% of those who answered worked at director level or c-level within their companies

  • Around a third worked in such roles as ecommerce manager and operations manager

  • Consultants and researchers were also represented

The companies the respondents worked for included supermarkets, fashion retailers, specialist pureplays and high-end brands.

  • Around 10% of respondents worked for enterprise-level companies such as multinational brands and listed UK companies

  • The majority of respondents worked for medium-sized companies, including fast-growing fashion pureplays, book stores and homeware retailers

Room for improvement

Looking at the 90% statistic above, we are confident this is not just a ‘generic’ figure reflecting the idea that it is always important for retailers to improve the delivery and fulfilment experience. Looking through the results, two figures suggest this is genuine:

  • Almost 40% of respondents think that their fulfilment and delivery experience gives them a competitive advantage

  • Almost 35% of respondents scored their delivery experience at five out of 10 for reflecting their brand

We interpret these figures as confirming a recognition that improving the fulfilment and delivery experience really is important to retailers’ continuing competitiveness.

Survey results in full

Here are the key findings of our survey, From ‘In Stock’ to Service and Experience – Delivery and Customer Impact

The delivery experience and brand:

  • Asked to rank whether the delivery and fulfilment experience fully reflects their company’s brand on a scale of zero to 10, the average response was six

  • This suggests a certain ambivalence among respondents as to whether their companies are doing enough. The responses clustered around five and six, with a few outliers at either end of the scale

Warehousing and fulfilment logistics

We asked respondents what, if anything, would they wish to improve about their company’s warehousing

and fulfilment logistics.

  • 54.2% wanted more effective returns processing and management

  • 44.6% wanted improved stock visibility across the internet and retail stock for the consumer

  • 39.8% wanted increased agility in responding to retail spikes and volume fluctuations

  • 32.5% wanted more flexibility in pre-retailing/value-added services such as ticketing, repricing, quality control, etc

  • 28.9% wanted improved supply chain systems integration with enterprise software

These answers tally with the idea of an industry that’s beginning to look in more depth at issues around fulfilment. In particular, the emphasis within the answers on returns would appear to back up the idea that customers are using the home as a showroom.

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