Essential Retail recently published an article about shipping orders to customers and the cost of managing returns. This article has a fairly strong focus on shipping directly to customers from a DC (Distribution Centre) which may not be the case for the majority of Independent Retailers but the same challenges and processes still apply.
Omni or Cross-Channel selling brings with it a number of additional sales channels but also a number of additional administration processes, challenges and costs. As online sales continue to grow and take a greater share of a retailer’s overall sales, the resulting margin erosion from the additional costs associated with fulfilling customer orders, could have an adverse effect on profitability.
Whilst items are out with a customer awaiting return to you they are not in stock and available for sale, monitoring these and keeping the time stock is in transit to a minimum all help with your stock profile and stock control. SalesStream has a number of features and tools which can assist with this.
75% of the in this survey admit to still running their store and online operations separately, and according to an accompanying report this is taking a toll on retailers’ profitability and hinders their ability to create a seamless shopping experience for customers.
A number of UK retailers have started to address profitability concerns surrounding new fulfilment pressures by introducing charges for certain orders. John Lewis now places a £2 charge on click & collect orders below £30, while Tesco now charges its customers £4 for grocery click & collect orders up to £40.
A JDA and PwC study says that to deal with the high costs of new fulfilment practices, 39% of CEOs are planning on raising the minimum order value for free home delivery. In addition, 31% of respondents are planning on raising the minimum order value for free click & collect services and 29% are looking at increasing the cost for home delivery.
What is clear is that profitability has to be addressed as a matter of priority. This will require both an investment in the supply chain and technology, allowing retailers to reduce the cost of fulfilment model whilst still delivering exemplary customer service and experience.
You can read the full article here at Essential Retail (Published: 10:17:13 on the 24th Feb 2016 Author: Ben Sillitoe)