Retail Execs Eye
Fulfillment Margins & Frictionless CX
The dramatic increase in ecommerce volume triggered by the
pandemic has had an accompanying impact on retailers'
abilities to provide profitable new forms of order
fulfillment, such as buy online pickup in-store (BOPIS),
ship-from-store, and curbside pickup.
Data revealed that the pandemic triggered a five-fold
increase in ecommerce volume in 2020 compared to the same
period in 2019. Amid the significant shift to online stores,
many retailers struggled to grow profit margins through
order fulfillment, according to the "The New Store
Experience Imperatives in High-Touch Retail" report. It also
identified the pressing need for retailers to create
frictionless customer experiences across physical and
"The ecommerce uptick of the last twelve months has
necessitated a realignment of how retailers approach
leveraging store associates, locations and inventory,"
commented Kevin Swanwick, vice president, store solutions,
Manhattan Associates. "Associates became pickers and
shippers; stores turned into mini fulfillment centers, and
in-store inventory was increasingly made available online."
As the pandemic's impact continues to accelerate the
transformation of brick-and-mortar retailers, the research
revealed some key findings for retailers looking to chart a
path to success in a post-pandemic world:
Retailers must make store-based fulfillment more profitable.
The significant growth in BOPIS, curbside pickup and other
modes of fulfillment has squeezed margins. Seventy-nine
percent of surveyed retailers say the profitability of
orders fulfilled from stores was reduced somewhat or
significantly between Q1 and Q2 2020. With 80% of shoppers
expecting to increase BOPIS and curbside pickup over the
next six months, it's critical that retailers identify and
address the inefficiencies causing this loss to improve
Unified customer experience across touchpoints is key.
Eighty percent of shoppers said they were likely or very
likely to have digital interactions with store associates
over the next six months. Yet 54% of retailers don't
currently equip their associates with the digital tools to
reach out via email, text or social media, and 81% do not
enable store associates to contact a customer about an
Frictionless experience is critical. The survey found that
returning an item ranked as the number two motivator for
future store visits by customers, second only to the need
for same-day products. However, 60% of retailers surveyed do
not allow shoppers to return or exchange an item during
checkout, adding an unnecessary obstacle to flipping the
return interaction from a loss to a profit.
In-store inventory management needs to match warehouse
accuracy. Eighty-five percent of surveyed retailers ranked
inventory accuracy as a top priority to improve BOPIS and
curbside pickup options. Retailers faced challenges with
in-store inventory numbers that were not nearly as accurate
as warehouse numbers.
“Brick-and-mortar retailers still hold an important place in
the evolving retail landscape, and how well brands embrace
these changes to the store footprint will directly impact
their overall profitability,” said Gaurav Pant, chief
insights officer, Incisiv. “We recommend retailers focus on
delivering safe, convenient in-store order fulfillment
options. Equally important is enabling associates to
communicate with shoppers digitally and providing a
high-quality, consistent cross-channel experience.”