In an omnichannel world with more shipping and delivery options than ever, retailers should continually evaluate their operations to prepare for uncertainties and keep an eye on the competition to keep loyal customers happy. Organizations must figure out how to leverage fulfillment and shipping solutions as differentiators to both the customer experience and the bottom line.
Our 2023 Omnichannel Retail Index (ORI) confirms cost-effective fulfillment strategies have the power to drive consumer loyalty. Compared to 2022, the average adoption of shipping and delivery best practices dropped slightly. Some of the best practices criteria include having a specific expected delivery date (not just a range) on the product detail page and offering free shipping (outside of promotions). As pressure on expenses hit the bottom line, retailers have had to relook at the cost implications of free shipping, and we are seeing change happening on threshold levels and testing of shipping offers.
Since 2021, we continue to see a slight decline in companies offering Buy Online Pickup In-Store (BOPIS) (82% in 2023, compared to the peak of 86% in 2021). BOPIS is still a customer favorite, and despite the slight decline, it has become table stakes for omnichannel retailers — the real challenge for retailers is how well they execute and deliver seamless customer experiences.
To deliver the best experience possible, retailers and brands must start by mapping the customer journey, assessing the customer data strategy and technologies necessary to support a seamless experience.
Salesforce research shows that BOPIS generates value for the brand and retailer. In addition to faster online revenue growth for those companies offering BOPIS, Salesforce forecasts that in 2023 BOPIS will drive $28 billion in incremental global store sales when customers pick up their online orders.
As expected, curbside pickup has been on a steep decline since 2021 (49% of retailers offered curbside in 2023, compared to the peak of 73% in 2021).
Interestingly, 16% of retailers offer curbside returns (a slight increase from 13% adoption in 2022), and 37% today have designated parking spaces for curbside pickup (29% in 2022).
The use and growth of predictive analytics, which can influence future decision-making in last-mile delivery, will become a dominant trend. Analytics allow shippers to gain clarity on current issues and help them anticipate future problems, mitigate risks, and improve overall practices. The right AI-driven technology can work hand in hand with courier management capabilities to leverage the full fleet to address any issues that pop up and gain more visibility into delivery processes.
As retailers look for better ways to streamline their operations, outsourcing order fulfillment will continue to soar. AI-driven order fulfillment will become commonplace, assisting retailers in managing goals such as capacity, shopping costs, avoiding markdowns and stockouts, and optimizing fulfillment plans at the lowest possible cost-to-serve.
See how your company stacks up! Download the 2023 Omnichannel Retail Index and sign up for your free ORI assessment to understand how you deliver on omnichannel best practices compared to the overall Index, your vertical, and your competitors.
Rich Siefert is a Senior Consultant, Practice Lead in OSF Digital´s Strategy group. He has over two decades of executive-level experience at large-scale retailers, particularly in the home categories, with a proven record in strategy, P&L management, and organizational leadership in an omnichannel environment.