According to a new body of research, 55 percent of logistics companies expect to be providing two-hour delivery services by 2028.
Zebra Technologies has released the results of its Future of Fulfilment Vision Study, claiming over half of the respondents are anticipating two-hour delivery windows within the next 10 years.
Findings also suggest that shipping companies could utilise crowd-sourced delivery options and networks of on-demand drivers by the year 2028, with 96 percent of respondents saying they expect to see their service offerings shift in this direction in the coming years.
According to Jim Hilton, the manufacturing and T&L global lead at Zebra Technologies, increasing consumer demand and the shift from traditional bricks-and-mortar and pureplay retailers to omnichannel shopping environments, are driving the shift in order fulfilment requirements.
“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,” Hilton said.
“Zebra’s Future of Fulfillment Vision Study found that 95 percent of survey respondents in Asia-Pacific agreed that e-commerce is 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.”
Some other key findings from the report include that 67 percent of delivery companies expect to be providing same-day delivery services by 2023. This figure isn’t surprising in the “on-demand” shopping economy where a large portion of Australian retailers, including the likes of ASOS and Vinomofo, already offer same-day delivery services.
This delivery method is usually well-received by consumers, with ASOS claiming its sales grew 30 percent in the four months to December 31, 2017, after the introduction of same-day shipping.
Omnichannel shopping environments were another key focus of the study, as 92 percent of respondents cited implementing an omnichannel strategy as a key challenge. Also worth noting is that an estimated 73 percent of consumers shop both online and in-store but only 42 percent of supply chain respondents felt confident they were meeting consumer needs in this field.
Zebra Technologies also claim that managing product returns is still a key challenge for suppliers in the Asia Pacific region, with 93 percent of businesses saying this is an area of concern. Presently, the technology provider says that 58 percent of retail respondents add a surcharge for online returns and 71 percent of these retailers have no plans to eliminate this fee in the foreseeable future. Another 71 percent of businesses reportedly believe more retail stores will turn their physical store locations into mini fulfilment centres to address challenges around omnichannel shopping and online returns.
It’s also believed that technological innovations within the retail operations space will assist with alleviating common shopping limitations.
Interestingly enough, the report made no mention of plans for implementing one-hour shipping, which could be because of the difficulty retailers and suppliers alike face when implementing such a high-speed fulfilment service.
This is a concern that Jane Lu, the CEO and founder of online women’s shopping portal, Showpo brought up in a recent interview with Power Retail.
“One-hour shipping seems quite difficult with the current infrastructure available to Aussie retailers, given it takes almost an hour to ship from most warehouses into the CBD,” she said.
Although some industry insiders are more positive about the likelihood of implementing one-hour shipping in Australia, as Dean Salakas, co-CEO at The Party People, believes it’s not so far-fetched.
“It already exists – at least to some extent,” he said. “I think it’s just over 50 percent of our order volume is already express, so providing a one-hour shipping service, wouldn’t be that much of an extra strain.”