itim insights | Increasing the speed of customer order fulfilment

Increasing the speed of customer order fulfilment

Simon Evetts | 26.02.2019

Same-day delivery and rapid Click & Collect for online shopping has been talked about for a long time now, but very few retailers have managed to succeed. So what’s holding them back and why can’t retailers deliver?

Amazon raised the bar by offering same-day deliveries in some areas and has upped the ante with the potential help of drone technology in future. Argos has been able to steal a march by offering same-day delivery (on orders up to 6pm on many items) and FastTrack instant collection thanks to an established network of over 800 stores and distribution centres spread throughout the country. And Screwfix are renowned for their “collect in store in as little as one minute” promise.

But most bricks-and-mortar retailers, where approximately eighty percent of sales still occur, struggle to make home deliveries and rapid collections really work for them. According to a Kurt Salmon survey, standard home delivery times in the UK averaged 3.8 days and Click & Collect times averaged 2.2 days.

This is because few retailers have real-time stock visibility or order management systems in place to fulfil online orders from a store location. Those that do have these systems can significantly speed up both store collections and home delivery times.

Retailers working with itim and using our order management system have been successful at cutting down on waiting times: for instance, the UK toy-shop chain, The Entertainer, was one of the first retailers to introduce a market-leading click-and-collect service, available for pick-up within just 30 minutes of ordering.

So why can’t others deliver more quickly or offer rapid collection? The problem, for many, is that online orders are still mostly fulfilled from warehouse stock because they either don’t have visibility to store stock or lack the systems and processes to pick from store for collection or despatch.

With stock accuracy hovering around eighty percent for the average retailer and a lot of fragmented stock ‒ particularly in fashion, where sizes and styles tend to be unevenly spread all over the country ‒ speed of delivery and reliability continues to be an uphill struggle.

Nonetheless, deliveries can be expedited by holding stock closer to the customer. And here’s where most bricks-and-mortar retailers are missing a trick. Stores themselves can act as mini warehouses and distribution hubs across the country. Marrying the two ‒ online and store-based retailing ‒ creates an endless shopping aisle and offers the best of both worlds to a much bigger audience. It can also create significant service differentiation against the pureplays by offering goods for collection within the hour and the ability to rapidly ship-from-store (using local couriers in urban locations).

Order management systems can facilitate this by providing real-time inventory visibility, improved stock accuracy (with in-store tools and self-healing capabilities), intelligent order routing and automation of the in-store order processes. The results include increased customer order satisfaction rates and significantly faster collection and customer delivery times.

Within the next year or so, I’d certainly expect to see an increase in the number of retailers offering near-immediate collection and faster delivery times being achieved ‒ even hourly deliveries in some major cities. If apps like Uber and Deliveroo can do it, then so can others.

>> Read more about our Enterprise Order Management solution

Sources: https://sml-rfid.com/solutions/in-store/