A new report has warned that retailers and consumer products companies are scrambling to meet customer demand for fast home delivery of products, citing outdated supply and delivery chains, a lack of order fulfilment centres near customers, and the high capital costs of fixing these problems as major
The study by the Chief Marketing Officer (CMO) Council and Business Performance Innovation (BPI) Network found just 3% of industry survey respondents think their companies are very capable of meeting current expectations for fast home delivery.
The CMO council said as a result the industry is considering new cooperative approaches to supply chain transformation, including joint ventures for creating shared micor-fulfilment centres in urban areas closer to customers.
“The increasing dominance of Amazon and very short list of other retail ecommerce giants is placing intense pressure on retailers and consumer products companies to find profitable and effective solutions to the home delivery dilemma,” said Dave Murray, director of thought leadership for the BPI Network. “Our study makes it clear that efficient delivery is now the key to winning and keeping customers in the era of ecommerce.”
Some 97% of respondents say they would consider new joint venture approaches to rebuilding supply and fulfilment, including 42% who already expect adoption of these shared models.
The new study, Increase Your Pace in the Ecommerce Race, was conducted in partnership with Attabotics, a robotics and software company focused on enabling a new generation of automated fulfilment centres.
The study is based on a survey of 153 executives in retail, ecommerce, consumer products, distribution and consulting firms involved in consumer supply chains. The vast majority of executives (96%) say that redesigning supply and delivery chains will be crucial to fulfilling their promise to customers and maintaining business profitability.
Greater automation of picking, packing and sorting, closer proximity of fulfil centres to customers, and more efficient last mile delivery are seen as the top three requirements for supply chain transformation.
“Same day/next day home delivery is attainable for retailers and consumer brands of all types and sizes,” added Julien Seret, Attabotics vice president, Network Supply Chain. “To make this a reality, a new system of shared, multi-tenant micro-fulfilment centres built in key population centres will be needed. As this study demonstrates, the industry is ready for cooperative, network supply chains.”