Four out of five e-tailers struggle with peak fulfillment demands

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A new report by Peoplevox, a provider of warehouse management systems (WMS) for the e-commerce industry, has found that 82% of businesses reported an increase in online sales in 2016, and that only 6% reported a decrease in orders compare to the previous year.

The 2017 E-Commerce Fulfilment Report found that, while many voiced concerns over increasing competition, Brexit and currency fluctuations, the majority (88%) expected a further increase in orders during 2017.

Despite such positive results and the generally upbeat outlook for this year, only 53% of respondents said they were happy with their fulfilment and warehouse operations. 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. When it comes to rectifying shipping errors, the majority (80%) appears accepting of the additional carriage, customer service and warehouse labor expenses as an inevitable cost of order fulfilment, and 20% admitted to not knowing the cost of shipping mistakes.

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.

Jonathan Bellwood, founder and CEO, Peoplevox, said, “While it is encouraging to see so many survey respondents reporting continuing sales growth, which is broadly in line with figures for the online retailing sector as a whole, our report has identified a number of growing pains. These will become increasingly challenging for businesses as they continue to expand rapidly.

“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 maximize available sales opportunities, and an escalation in avoidable overheads.

“For those still without or delaying investment in the latest technology, the availability of affordable, fit-for-purpose e-commerce fulfilment solutions now makes it easier than ever to equip their warehouses with the tools necessary for maximizing productivity, accuracy and profitability.”

A total of 154 respondents from a variety of countries took part in the online survey during the first quarter of 2017. Approximately 70% of businesses are UK/Ireland based and 10% are in the USA. To download the full report, click here.

June 19, 2017

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Dan joined Postal and Parcel Technology International in 2014 having spent the early years of his career in the recruitment industry. As assistant editor, he now produces daily content for the website and supports the editors with the publication of each exciting new issue. When he’s not reporting on the latest logistics news, Dan can be found apprehensively planning his next DIY project for his new home.

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