Ecommerce Dare: Brands Are Struggling To Get Fulfillment Into Place


Ecommerce Dare: Brands Are Struggling To Get Fulfillment Into Place



by , Columnist, November 8, 2022

Ecommerce brands often struggle to get their email systems into place. But engagement with shoppers may be the least of their problems.


The big challenge is fulfilling online orders, judging by “Increase Your Pace in the Ecommerce Race,” a study released Tuesday by the CMO Council in cooperation with Attabotics.


Of those polled, 50% say that delivery to the home has placed increased pressure on their business. And 28% see an impact on profitability. 


Moreover, 96% say redesigning supply and delivery chains is important to their business, and 61% say it is very important.


This is no small problem, given the increasing turn to online commerce. The respondents say: 



  • Ecommerce is a major part of our business — 50%
  • We are increasing our use of ecommerce to serve our customers — 26%
  • We are in the early stages of adopting ecommerce—13% 
  •  E commerce is the predominant way we do business with customers — 7% 

Only 4% say ecommerce is not part of their business model.  


In general, companies list these as these hurdles to pursuing an ecommerce strategy:



  • Having the right technology and infrastructure — 70%
  • Dealing with technology complexity — 58% 
  • Challenges with fast and efficient order fulfillment — 42%
  • High cost of doing business — 24%
  • Lack of the right fulfillment facilities and processes — 20%
  • Need for additional human resources — 14%
  • Increasing competition from ecommerce leaders — 13%
  • Heavy capital investment — 13%
  • Profitability and margins vs. in-store sales — 10% 
  • Other — 7%
  • Rapid shift in online ordering — 2%

Moreover, these aspects of the digital supply chain are most in need of improvement:



  • Greater automation of picking, packing and sorting in order fulfillment — 59%
  • Improved proximity to the customer of order fulfillment — 48%
  • Efficient last mile delivery — 47% 
  • Predictive analytics of supply and demand — 37% 
  • Warehouse management systems and software — 21% 
  • Great availability of product assortment — 21% 
  • Increase collaboration with other retailers to improve supply chain economics — 8% 
  • Other—5%

Of course, normal-size ecommerce businesses may be cowed by the elephant in the room: Amazon. Here is how they list their main competitive threats: 



  • Amazon — 77%
  • Large existing retailers in my category — 68% 
  • Ecommerce-only businesses in my category — 64%
  • Walmart — 21% 
  • Consumer manufacturers — 9% 
  • Order fulfillment and last-minute delivery companies (Instacart, Doordash, Uber, etc.) — 7%
  • Other—7%

What makes Amazon so imposing? It has these strengths:



  • Expansive ecommerce infrastructure — 71% 
  • Huge available assortment — 61%
  • Amazon brand recognition — 57% 
  • Low cost of capital — 20% 
  • Little pressure for profitability — 19%
  • Deep customer data — 16%
  • High-tech market valuation — 14% 
  • High leverage with manufacturers — 13%
  • Growing control of manufacturer brands — 6%
  • Other — 5%

What are their priorities for investing in supply chain and infrastructure? They are: 



  • Better and more predictive data analytics — 65% 
  • Warehouse & fulfillment automation — 55%
  • Warehouse management systems and software — 47%
  • AI solutions — 35%
  • Store automation — 20%
  • Increase number of distribution and fulfillment centers—20% 
  • Network access to data — 19% 
  • Improved inventory visibility — 19% 
  • Self-driving delivery — 3% 
  • Other — 1% 

The CMO Council surveyed 153 executives and professionals involved in consumer supply chains. 


The biggest hurdle is delivering orders to the home, the CMO Council and Attabotics report.

 

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