With Retail Networks, Shoppers Access Faster Delivery And Convenient Returns
Retailers turn to stores and third-party fulfillment to meet customers' expectations for immediate service, research shows in PSFK's latest Future of Retail report
E-commerce ushered in a culture of convenience. Same-day delivery and in-store pickup options are skyrocketing for a reason: Consumers expect to fit their shopping needs into their routines with minimal effort.
In order to respond to customers’ expectations of immediacy without straining backend operations, retailers are transforming their supply chains and logistics streams from linear to distributed models, relying on networks for physical stores and third party operators to fulfill orders more quickly across any combination of retail channels—store, desktop or mobile. PSFK Labs categorizes this trend as Networked Logistics in The Future of Retail 2018 report.
The new standards for instant gratification extend from everyday groceries to high fashion. As José Neves, founder of luxury retail platform Farfetch, commented:
“Timely delivery of product remains the top of all criteria for luxury consumers. They want storytelling and theater of course, but they also want their chosen item, in the right color, size and in their hands as quickly as possible. Ultimately the use of data to transform stores will separate those who make it to the next step and those who won’t.”
A survey by Temando found that 60% of consumers want 1 to 3-hour shipping options, though only 20% of retailers are offering them. 95% of consumers say they would shop in store and ship goods home, but 65% of retailers do not have the option (The State of Shipping in Commerce 2016).
To establish an efficient system for providing these conveniences, retailers should limit the burden and cost for stores to carry inventory, and instead rely on digital fulfillment to deliver products to customers within 24 to 48 hours. Existing stores can play double duty as fulfillment centers that satisfy orders for neighboring locations or online orders.
Direct-to-consumer online brands should partner with retailers that frequently intersect customers’ routines to offer more convenient drop-off locations for online returns. Brands should also leverage retail and third-party fulfillment partnerships to create physical touchpoints without investing in storefronts.
Some B2B startups are already meeting this new logistical need for their partners. Darkstore is an on-demand delivery platform that enables brands to offer same-day delivery by acting as a fulfillment center for participating e-commerce brands. Taking advantage of excess capacity in storage facilities, malls and bodegas, Darkstore enables brands without local inventory to store their supply and then ship out the same day. Orders are automatically routed to the fulfillment location that provides the lowest rate for the delivery. Darkstore works with on-demand delivery services, as well as traditional courier businesses.
Startup retail service Happy Returns has a network of physical return locations inside malls that allow customers to quickly and efficiently return and receive a refund for items bought online, rather than shipping returns by mail. Customers drop off their purchases off at Happy Returns locations. Using the Happy Returns iOS app, which connects to the backend of participating brands and retailers, ‘Returnistas’ enter a customer’s email address to verify that the purchase occurred and that it can be returned, and then handle processing and shipping.
The Future of Retail 2018 outlines how companies can transform their stores into experience centers that extend their supply chain and digital commerce platforms, creating mutual value with a focus on shopper experience. Members can download the report today or all readers can immerse themselves in the findings at our retail sessions on Jan. 17, 2018.