Despite a continued growth of ecommerce sales the majority of retailers are failing when it comes to their fulfilment operations, they admit.
According to The 2017 E-commerce Fulfilment Report, a new report from ecommerce warehouse management system provider PeopleVox, only just over half of those surveyed (53%) said that they were happy with their fulfilment and warehouse operations.
Of those questioned nearly two-thirds (63%) admitted to not always shipping on time with a third (34%) citing the unavailability of stock being a key reason.
Correcting shipping errors came at a high price for many. According to the survey results, the majority (80%) appear accepting of the additional carriage, customer service and warehouse labour expenses as an inevitable cost of order fulfilment. 1 in 5 admitted to not knowing the cost of shipping mistakes.
Managing peak demands was also a problem for retailers with 78% of businesses saying that meeting the additional demand for orders at peak times was an ongoing challenge in 2016, with just over half (52%) resorting to hiring temporary staff to solve the problem.
Nearly two-thirds (62%) of those surveyed used a WMS but of those that don’t have one or aren’t implementing one this year, 70% said it was for reasons such as complexity, unclear benefits, or believing their business just isn’t ready. A significant minority (30%) said they still rely on their ERP/e-commerce platform for managing the basics of warehouse management.
For those that had invested or were considering investing 40% stated that an increase in picking errors was the main reason with other common reasons including sales growth, warehouse expansion, or the implementation of new e-commerce platforms or ERP systems. Just over 10% said poor online ratings had also inspired a move towards implementing a WMS.
“Our report has identified a number of growing pains,” said Jonathan Bellwood, founder & CEO, Peoplevox. “First and foremost, in this super-competitive era of ecommerce 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 maximise available sales opportunities, and an escalation in avoidable overheads,” he said.
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