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Retail Trends 2014: #5 – A “Fulfilling” Experience (Faster Fulfillment)

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I promise not to talk about drones (well, maybe just a little.)
In 1860, with 120 riders, 184 stations, 400 horses and several hundred personnel, the Pony Express reduced the time for messages to travel across the United States to 10 days. It was a successful innovation, but still not fast enough, and after 18 months of operation, it shut down to make way for one more innovation: the telegraph. I don’t think that retailers are considering a resurgence of the Pony Express model, but in 2014 they will continue to find new ways to fulfill orders faster and with more options for consumers to take advantage of. fulfillmentImg_1
Despite the late delivery snafus of the 2013 holiday season, online, brick and mortar, and all forms of omni-channel retailing will continue the push innovations in fulfillment and delivery models in 2014.  IDC predicts that retailers will double the rate of industry supply chain investments in 2014, as compared to 2013.
Online retailing is all about the convenience of the shopping experience, broad assortments, the “endless aisle,” and competitive pricing. Consumers can wait for the satisfaction of using their products. In fact, tracking your order and waiting for the UPS truck to pull up in front of your house is half the fun! But what if brick and mortar stores can offer the same conveniences and leverage their “forward-deployed inventory centers” (their stores, according CEO Joel Anderson) to muddle the tradeoffs even further?
The connected consumer is not just expecting faster delivery, but infinite flexibility in how it is done. Orders should be sent from any channel: Store, online, mobile, call center. Orders can be shipped from the manufacturer, distribution center, store, or digitally to any device (how about a 3-D printer, while we’re at it?) Maybe the consumer would like to pick it up in the store or in a nearby locker. Maybe she can wait two weeks, but maybe she needs it in two hours. Every permutation is fulfillment nirvana.
Some interesting advances and models are making progress. Amazon Now and Google Shopping Express are pushing the same-day delivery envelope. Walmart and Swapbox are rolling out the convenience of locker-based delivery. Even Uber is experimenting with local delivery of things as an add-on service to its popular delivery of… people. Uber has already given customers the chance to request Christmas trees, roses and even kittens for a limited period. It may seem like a novelty, but, again, the connected consumer is asking for it and by golly the connected consumer will get it.
Does every segment and scenario need to be satisfied? No, but optimizing for just a few insanely great options takes a coordinated effort to deliver quickly and efficiently (that is, profitably.) Getting the right items in the right locations requires a deep understanding of products and consumers through analytics. Picking from the fastest locations means that inventories are managed and updated in real time. Ordering and delivering quickly with all of the available options means order management and logistics system are fully integrated and tuned on a regular basis.
Look for these investments and a lot more creativity in the air* for 2014.
*That’s as close to drone reference as we will get here.

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Jim Hertzfeld, Area Vice President, Strategy

Jim Hertzfeld leads Strategy for Perficient, and works with clients to make their customers and shareholders happy with real world strategies that build their digital depth.

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