Automation Solutions Closes the Gap on Last Mile Delivery for Retailers
Industry experts forecast that e-commerce sales will reach $4.2 trillion in 2021.
Retailers can no longer rely on customer-facing variables such as brand, product, or price to differentiate themselves from rivals. Fulfillment is becoming an essential component of a successful end-to-end retail plan.
With e-commerce giants like Amazon and Walmart setting the standard for 2-day and same-day delivery, competing businesses are under pressure to offer a quick fulfillment and distribution experience to meet customer demand while lowering last-mile delivery prices.
This aim may be achieved in various ways, but a growing trend is to utilize automation solutions throughout fulfillment operations.
Consider using an automation solution if you are looking for ways to automate your fulfillment process, especially around last-mile delivery. Automation solutions can help increase accuracy and efficiency during the entire process while also reducing labor & shipping costs. Expediting fulfillment through an automation initiative will ultimately lead to improved supply chain management and increased customer satisfaction.
Benefits of Fulfillment Automation
According to a recent industry report, only 14% of 300 senior executives polled by Blue Yonder said their fulfillment sites are entirely automated. Of them, 21% anticipate that the entire fulfillment process will be fully automated by year’s end.
Furthermore, roughly 23% of respondents expect to have most fulfillment centers automated within the next three years.
The ability to fulfill orders at multiple locations and utilize automation tools will be the key to efficient fulfillment and optimal delivery solutions.
Automation capabilities for fulfillment can help retailers:
- Eliminate manual shipping procedures
- Improve operational efficiency to meet industry and consumer demand
- Reduce last-mile delivery costs – Increase profitability
- Get back to a customer-centric approach
Logistic Network Benefits for Last-Mile Delivery
Another critical reason retail organizations adopt fulfillment automation is the increasing expense of what’s known as last-mile delivery. This is the part of the fulfillment process where the product goes from the distribution center to the back of a delivery truck and then to the customer’s doorstep – hence the term “last mile.”
This part of the product’s journey accounts for over 50% of the delivery expense. Distribution centers, especially pop-up distribution centers (also known as pop-up DCs), and micro-fulfillment warehouses, have been used by retailers to combat the rising input costs associated with last-mile delivery.
Over the next several years, pop-up DCs and micro-fulfillment centers are set to nearly double. With these fully automated distribution centers, merchants can reconcile orders more quickly and profitably, especially with higher order volumes resulting from the ongoing COVID-19 pandemic and migration to e-commerce shopping.
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At Data Ideology, we have worked with several retail organizations helping them deploy automation resources. Our approach is to collaborate with their IT and business leaders to centralize the multiple data sources utilized during the fulfillment and distribution processes and create a single source of truth (SSOT) for all relevant data.
These businesses can now apply their supply chain intelligence to modern technology that supports automation capabilities thanks to SSOT. By using automated solutions and removing manual procedures from operations, merchants can avoid prolonged queues in their fulfillment centers to help ensure timely delivery. Cost savings, improved profitability, and meeting customer expectations are direct positive results of these efforts.
Establishing SSOT is a critical step in the fulfillment automation ecosystem. Retailers may use this data to close the gap in market share and refocus on a more customer-centric approach to enhance the entire online shopping experience. Contact us today to learn how we can help accelerate your automation initiative using our proven retail methodology.