2021 is another year of fulfillment challenges. The ongoing effects of the pandemic have retailers worried about having enough inventory for the holidays. Plus, COVID-19 spurs further expansion in omnichannel services, like curbside pickup.

The pandemic dramatically changed fulfillment and delivery in 2020. A year later, retailers are still feeling the effects.

Mandatory store closures have mostly ended, but shopping habits are unlikely to return to the 2019 version of normal. More consumers started purchasing online regularly during the pandemic, enjoyed the experience, and do not plan to go back to their old ways. During the upcoming holiday season, that trend could be good for e-retailers. But they can’t sell what they don’t have.

The ongoing effects of the pandemic on the global supply chain have retailers worried about whether they will have enough inventory when the holiday season arrives. The situation is so dire that The Home Depot Inc. (No. 4  in the 2021 Digital Commerce 360 Top 1000) has chartered at least one dedicated cargo ship to take greater control of its supply chain and avoid having products out of stock.

A recent shock to the system occurred in early June, when Yantian International Container Terminal in Guangdong, China, was partially shut down to control COVID-19 cases. The port resumed operation later the same month, but not before causing a massive backup of outgoing goods. In July, Union Pacific Railroad suspended rail service from the West Coast to Chicago for a week to relieve congestion in Chicago and divert some rail equipment to serve other markets.
Retailers are also concerned about the potential economic impact of new variants of the coronavirus. As Digital Commerce 360 was finalizing its 2021 Click, Ship & Return Report, COVID-19 outbreaks in Southeast Asia curtailed production for some of the world’s most prominent footwear and garment companies, as factories there struggled to keep the lights on.

Walmart and Target leverage their stores for fulfillment

Other key fulfillment trends include retailers adding to or improving their omnichannel options—especially curbside pickup. Among the retailers ranked in the Top 1000, 170 offered the service as of mid-2021, up from just 25 in 2020, an increase of 580.0%.

Among the retailers most committed to leveraging their stores to fulfill online orders are Walmart Inc. (No. 2) and Target Corp. (No. 6).

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A significant contributor to Walmart’s strength in online sales is its grocery business. Walmart does not break out online sales by merchandise category. But in its fiscal year ended April 30, Walmart reported that grocery pickup and delivery saw record-high sales volumes, reflecting a continued customer shift toward ecommerce and omnichannel options.

As of Jan. 31, 2020, Walmart offered pickup of online orders at 3,750 U.S. stores and same-day delivery at roughly 3,000. In January 2020, just before the pandemic hit the U.S., those numbers were 3,200 and 1,600, respectively.

Walmart also invested in technology to give its fulfillment operation an edge. Among those investments, Walmart developed artificial intelligence-based software for its grocery business to handle the surprisingly complex process of deciding how to substitute out-of-stock items. Walmart says making decisions about grocery substitutions can involve almost 100 factors. Also, Walmart invested in robotic fulfillment technology.

Robotics are also part of Walmart’s drive for improved efficiency. The retailer began testing an automated robotic fulfillment system at a Salem, New Hampshire, store in late 2019 and began rolling out similar fulfillment centers at dozens of stores in 2021.

At Target, the retailer’s “same-day services”—consisting of curbside pickup, buy online pickup in stores (BOPIS) and on-demand delivery via its Shipt unit—kept growing at a rapid clip in 2021. Curbside pickup (which Target calls Drive Up) grew 123% in Q1—which was on top of 600%+ growth in the comparable quarter a year ago. BOPIS grew 52%, on top of 100% growth in Q1 2020, while Shipt delivery grew 86%, on top of 300% growth a year earlier.

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In Q2, which ended July 31, growth continued for sales fulfilled via Target’s same-day services. Drive Up grew more than 80% in Q2 2021 after increasing more than 700% in Q2 of 2020. BOPIS grew more than 30% year over year after increasing more than 350% a year earlier. And Shipt grew about 20% on top of more than 60% growth in q2 2020.

The 2021 Click, Ship & Return Report

The 2021 Click, Ship & Return Report explores the fulfillment practices and strategies of retailers in the Top 1000, including Amazon, Walmart, Target and Best Buy, and the current pain points in order processing and fulfillment. This report examines everything from shipping and returns to omnichannel services. The report includes:

  • 30+ data-packed charts and graphs
  • In-depth analysis of the shipping policies of Top 1000 retailers
  • An overview of Amazon’s fulfillment practices
  • Details on the state of the worldwide supply chain in 2021
  • Breakout sections on topics including in-warehouse automation and the potential of delivery robotics
  • Exclusive consumer survey insights

View the table of contents for full details on what’s included in the report.

To purchase the report for $399, you can click here. Digital Commerce 360 Gold and Platinum members receive this report for free.

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