Retailers still not planning enough for home delivery
Retailers do not consider home and same-day delivery as critical for the future as other segments of the retail supply chain, with potentially negative consequences
Retailers appear to be underestimating the transformative effect of e-commerce as they lag behind other segments in citing home and same-day delivery as key trends, finds new finds 2020 State of Retail Supply Chain Report, which can be downloaded for free here.
Logistics and technology solution providers were significantly more likely to cite increasing levels of both home and same-day delivery as being key trends for the industry when compared to retailers and manufacturers in the retail supply chain. Whereas 27.7% of retailer and manufacturers see increased home delivery as a key long-term trend, just under of half of LSPs chose it as critical, and an even higher 58.9% of technology and other solution providers consider it key to watch. Similarly, 18.5% of retailer and manufacturers expect same-day delivery to be critical, compared to 42.6% of tech companies.
Retailers would do well to consider these perspectives from other segments of their supply chain, particularly as tech providers live and die by their ability to see future trends emerging. Retailers need to be more aware of the shift over to home delivery and the acceleration of the process from customer order to delivery arrival. Already they have been burnt by being behind the curve introduced by the likes of Amazon and increasingly other regional players, such as Flipkart. Increasing the speed of delivery to the customer, improving tracking along the route, enhancing accuracy of delivery schedules and finding ways for physical stores to support the journey to the customer need to be put as a higher priority among retailers.
Retailers were also far more optimistic about international expansion, with 41.5% of retailer and manufacturers noting this as a key trend, compared to 27.5% of LSPs and 24.1% of technology other solution providers. Given that many of the world’s largest brands have patchy records in entering foreign markets, such as Walmart in Japan and Tesco in China, this may be an area to par back expectations.