Online retailers know how expensive fulfillment and delivery can be. In 2023’s challenging economic environment, they had to find ways to make it work for their consumers — and their bottom lines.
That meant being creative with where merchants shipped orders from, and where consumers could pick up their online orders. And even when everything goes right, consumers are still bound to return some of their orders — especially after the holidays. In fact, shipping carrier Pitney Bowes plans to add almost 1,000 drop-off locations through a partnership with PackageHub as the current holiday returns season peaks.
Below, we recap some of Digital Commerce 360’s most insightful coverage about fulfillment and delivery in online retail from the past year. These stories highlight meaningful fulfillment trends among online retailers in 2023. Most notably, they include in-store and curbside pickup, retailers shipping from stores, outsourcing fulfillment to other companies, and the impact returns have on all these processes.
What we learned about fulfillment and delivery methods in 2023
How merchants cut shipping costs
In an era where online shoppers expect free shipping, retailers need to find more profitable shipping approaches, such as by changing packaging, negotiating with shipping carriers, changing shipping schedules or outsourcing fulfillment to a 3PL.
Home Depot customers opt for ship to home — if the wait isn’t too long
Home Depot invests in its supply chain to cut costs and speed up delivery. As a result, more customers are opting to ship their orders to their homes.
Keeping customers updated during the shipping process can make or break the experience
Retailers say more communication is always better around fulfillment as consumers increasingly expect accurate, regularly updated information on their online orders.
Pickup takes different forms, yet isn’t worth it for some retailers
Committing to curbside pickup — or breaking up with it
Retailers scrambled to launch curbside pickup during the pandemic. But now that many consumers resumed in-store shopping, retailers must determine if offering curbside is still worth it.
Will alternate package pickup points take off?
Some retailers allow online shoppers to ship products to locations other than their stores or shoppers’ homes. The alternate fulfillment option can reduce package theft and offer convenience, but leaves the customer experience at pickup outside of the merchant’s control.
Office Depot delivers on 20-minute BOPIS promise
The office supply chain can have an order ready for pickup 20 minutes after shoppers order it online 98.9% of the time.
Walgreens commits to pickup and delivery customers: ‘they spend more money with us’
Lindsay Mikos, senior director, retail omnichannel at Walgreens, told Digital Commerce 360 more than half its digital orders are same-day pickups. The retail chain’s omnichannel services were critical during COVID-19, but now, Walgreens customers continue to want the convenience of shopping online and either picking up in-store or having orders delivered to their homes.
Tractor Supply 2022 conversion for BOPIS and curbside is 60% higher than home delivery
In 2022, Tractor Supply Co.’s conversion for buy online, pickup in-store and curbside orders was 60% greater than home delivery.
Some retailers save on costs by shipping from store
Why some retailers use — and avoid over-using — stores as fulfillment locations
Today’s shopper is a hybrid in-store and online shopper. Retailers face logistical and fulfillment challenges to ensure inventory is there. Three retailers strategize how to divide orders between warehouses and stores to efficiently meet shopper demand.
Apparel retailer Vince ‘pulls the lever’ on and off to use stores to fulfill orders
Apparel brand Vince LLC invested in software to navigate buy online, pick up in-store services, resulting in a 7% increase in BOPIS sales.
Destination XL Group uses stores to help promote its website
Big and tall men’s apparel retailer DXL increased online sales 9.9% in fiscal 2022, which ended Jan. 28, compared with 2021. By cutting back on the brands it carries and selling private-label merchandise on marketplaces like Amazon.com, the retailer plans to continue to expand its ecommerce presence.
Aviator Nation automates returns, uses stores to fulfill online orders
The California 1970s-inspired leisure wear brand Aviator Nation decreased its refund rate 11% by automating returns. The retailer also fulfills online orders through its 17 store locations.
Outsourcing fulfillment can make it faster and cheaper
What is 4PL, and does your ecommerce business need one?
Family farm Palouse Brand cut fulfillment costs by 20% by working with Ware2Go, a fourth-party logistics UPS company, to streamline shipping.
As orders mount, online men’s skincare brand outsources fulfillment, sells on Amazon
As demand grows, online retailer Black Wolf Skincare opts to outsource its fulfillment services and expand its reach by selling on Amazon.
PacSun pilots RFID to improve inventory accuracy, reduce split shipments
With products tagged with RFID, PacSun store employees can quickly count inventory several times a week, a large increase from a few times a year.
Retailers expect returns after holidays, but how do they handle them?
Online returns outpace in-store in 2023, NRF report finds
Online sales have an even higher rate of returns than in-store sales in 2023, according to a report from the NRF and Appriss Retail. And about 13.7% of returns (of online and offline orders) were fraudulent.
Retailers are in for a ‘tsunami’ of holiday returns this year: Salesforce
Holiday returns typically spike following Cyber 5, and then again right after Christmas, says David Sobie, CEO of Happy Returns.
How returns can be a retail ‘superpower’
A returns management CEO explains the valuable data behind returns.
Retailers revisit return policies ahead of the holiday season
Retailers give shoppers an average of 30 days to return their products, and a large majority of retailers plan to make their return policies stricter in 2023, according to Salesforce data.
Loop processes 60,000 returns a day during 2022 holiday season
The return-management software company said Dec. 27 was its busiest day, with 68,000 returns processed that day.
Amazon will charge for some UPS returns, warn customers about frequently returned items
Some customers will have to pay a $1 fee to return orders at a UPS store if they have other options closer to home.
Holiday returns decline as retailers raise fees
Return fees are more common, but extended returns windows are, too.
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