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Same-day delivery to be the norm by 2022, survey finds

13th April 2018 BY: Anine Kilian
Contributing Editor Online

Manufacturers, transportation and logistics firms and retailers are moving to meet the growing needs of the on-demand economy, in which the online buying, smartphone-wielding consumer expects a seamless, faster purchasing journey, a global survey has shown.

The ‘Future of Fulfilment Vision Study’, by US firm Zebra Technologies, has revealed that 78% of logistics companies expect to provide same-day delivery by 2023 and that 40% of logistics companies anticipate delivery within a two-hour window by 2028.

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Of the more than 2 700 professionals in transportation and logistics, retail and manufacturing firms surveyed, 87% expect to use crowdsourced delivery or a network of drivers that choose to complete a specific order by 2028.

“Driven by the always-connected, tech-savvy shopper, retailers, manufacturers and logistics companies are collaborating and swapping roles in uncharted ways to meet shoppers’ omnichannel product fulfilment and delivery expectations,” Zebra manufacturing, logistics and transportation global principal Jim Hilton said.

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The study found that 89% of survey respondents agreed that e-commerce was driving the need for faster delivery.

“In response, companies are turning to digital technology and analytics to bring heightened automation, merchandise visibility and business intelligence to the supply chain to compete in the on-demand consumer economy,” he noted.

Radio-frequency identification technology and inventory management platforms are expected to grow the most in the next few years, providing up-to-the-minute, item-level inventory lookup, heightening inventory accuracy and shopper satisfaction, while reducing out-of-stock, overstocking and replenishment errors.

Zebra stated that next generation supply chains would reflect connected, business-intelligence and automated solutions that would add newfound speed, precision and cost effectiveness to transportation and labour.

The most disruptive technologies are expected to be drones (39%), driverless/autonomous vehicles (38%), wearable and mobile technology (37%) and robotics (37%).

The study showed that only 39% of supply chain respondents reported operating at an omnichannel for one-third of respondents followed by inventory allocation and freight costs.

Globally, 87% of respondents agreed that accepting and managing product returns was a challenge.

The report highlighted that an increase in free and fast product delivery corresponded with an increase in product returns, a costly concern that retailers struggled to manage efficiently across many different purchasing models.

“Seven in ten surveyed executives agree that more retailers will turn stores into fulfilment centres that accommodate product returns,” the report stated.

More than 60% of retailers that currently do not offer free shipping, free returns or same-day delivery plan to do so while 44% expect to outsource returns management to a third party.

The survey also found that, although 72% of organisations used barcodes today, 55% of organisations were still using inefficient, manual pen-and-paper based processes to enable omnichannel logistics.

By 2021, handheld mobile computers with barcode scanners will be used by 94% of respondents for omnichannel logistics.

“The upgrade from manual pen-and-paper spreadsheets to handheld computers with barcode scanners or tablets will improve omnichannel logistics by providing more real-time access to warehouse management systems.”

The survey, meanwhile, pointed out that retailers in Europe and the Middle East were filling digital orders directly from their physical stores.

Retailers and operations leaders are calculating that a network of stores can get digital orders faster and more efficiently than a handful of centralised warehouses. More than 80% use store inventory to fulfil orders and 29% expect this to increase by greater than 10% over the next five years.

It also noted that shipping fees and returns were undergoing a makeover in Latin America.

About 40% of respondents plan to discontinue free shipping, 55% expect to end free return shipping and 61% forecast the elimination of separate returns facilities that are managed by third-party companies.

Surveys were conducted in the US, Canada, Brazil, Mexico, Colombia, Chile, France, Germany, UK, Italy, Russia, Spain, China, India, Australia and New Zealand. 

EDITED BY: Chanel de Bruyn Creamer Media Senior Deputy Editor Online
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