Retail today is almost recognizable compared with pre-pandemic norms – and it’s no different for ecommerce fulfillment. The space has scaled almost beyond recognition thanks to stay-at-home restrictions and supply chain issues – and it isn’t finished yet.
As 2022 creeps closer, there’s set to be plenty of developments that will put ecommerce merchants to the test in their mission to secure long-term customer loyalty. In this post, we’re going to cover the 5 biggest ecommerce fulfillment trends for 2022 that brands should be preparing for. Let’s begin!
Subscription offerings took off early on in the pandemic thanks to stay-at-home orders and consumer anxiety about accessing essential goods. According to Recharge Payments, 2020 saw an eye-watering 90% growth in sign-ups to subscription programs compared with 2019.
While market growth has slowed with the reopening of physical retail, signs are pointing to ecommerce subscriptions being a lasting shopping tactic. GfK’s FutureBuy survey found that 22% of consumers are likely to continue using subscription services – 7% higher than 2020. This figure rises to 34% for millennials, who now have the strongest purchasing power of any age group.
Although replenishment subscriptions were particularly popular in 2020, curated subscriptions are driving much of this growth thanks to the increasing demand for personalized ecommerce experiences.
With 77% of consumers having chosen, recommended, or paid more for a brand that provides personalized services or experiences, curated subscriptions are a powerful tool to assist brands in getting more insight into what their customers want.
Adding a subscription business model means a significant change in your ecommerce fulfillment strategy. Subscription boxes require complex subassembly and packing processes which add significant time to order fulfillment. If you have a 3PL partner, it’s important to start discussions early on to find out how they can assist with creating an effective subscription fulfillment strategy.
Direct-to-consumer ecommerce is set to bring in $151.3 million in sales during 2022 – a 15% increase on 2021 figures.
But direct-to-consumer fulfillment is no longer the domain of disruptive, online-only brands. With direct selling growing leaps and bounds during 2021, more traditional retailers are eyeing up vertical integration as a way to improve profit margins and exert more control over the brand experience.
Moreover, many legacy brands have found out the hard way that wholesale channels can be the squeaky wheel during periods of supply chain challenges. Centralizing distribution and fulfillment is an effort to stave off the disruption caused by a lack of visibility and unreliable foot traffic.
Nike, Under Armor, and Levi’s are just a few of the brands that are pushing hard to expand their D2C capabilities. Back in 2010, just 15% of Nike’s revenue came from D2C sales. By 2020, this increased to 40%, with plans to reach 60% by 2025.
But this doesn’t mean that transitioning to direct-to-consumer ecommerce is a walk in the park. Building up a digital ecosystem that can handle omnichannel shopping activity and higher volumes of direct sales takes considerable legwork. Taking ownership over the end-to-end experience also means taking responsibility for the less sexy parts of direct selling – order management, freight, and shipments, just to name a few – and there’s little room for error.
Where services like curbside pickup and BOPIS (Buy Online Pick-Up In-Store) were a novelty early in the pandemic, consumers have come to rely on these services to help them navigate the complexities of a recovering retail landscape. Raydiant’s State of BOPIS report 2021 found that 60% of consumers plan on using BOPIS either the same amount or more often over the next twelve months.
The growth of BOPIS and online-to-offline (O2O) services highlights the importance of customer-centric shopping journeys that serve your customer in whatever channel they choose to shop in. For BOPIS to be sought after by your customers over the next year, it needs to maximize convenience in the post-purchase experience – or they aren’t going to engage.
In the same study, Raydiant asked consumers what pain points are preventing them from using a BOPIS service:
In sum, your BOPIS service needs to offer customers significant advantages if you’re going to see a strong uptake in 2022 and beyond. This means a unified inventory system that can retrieve in-store stock levels for your customers when they’re browsing online, in addition to a store-based fulfillment system that can manage upticks in demand around major promotional periods.
Whether it takes the form of Warehouse Management Systems, return management platforms, or robots roaming the warehouse floor, the demand for automation has gone from a steady creep to a sought-after solution to ongoing labor shortages and complex supply chains.
The global warehouse automation market is estimated to surpass $30 billion by 2026 – up from just 15 billion U.S. dollars in 2019. Meanwhile, an ARC Advisory Group survey published in July 2020 found that 79% of respondents think it’s ‘likely’ or ‘very likely’ that they’ll invest in warehouse automation within 1-3 years.
Manual processes are becoming increasingly costly to retailers who are pursuing greater speed and efficiency. However, upfront investments in automation are unlikely to pay off for smaller operations that can’t achieve economy of scale throughout the year. To avoid expensive software investments that end up gathering dust during periods of downtime, it’s far more cost-effective to partner with a 3PL that can provide you with the technological and physical infrastructure to support rapid scaling.
Your customer doesn’t just want to receive their order on time; they want to be surprised and delighted by a seamless shipping experience. Yet this is where many ecommerce brands drop the ball by neglecting the importance of CX management.
For example, the average U.S. consumer tracks their order an average of 3.9 times after purchasing. But over half of ecommerce merchants fail to provide tracking information through their website, preferring to rely on third-party sites instead.
This may deliver the information that your customer wants, but directing them away from your brand causes disruption to the post-purchase experience that can confuse or annoy customers.
Integrated, real-time shipping updates are the key to instilling confidence in the reliability of your service. When combined with regular email communications and personalization, you can provide customers with the consistent, accessible aftercare they expect.
As retailers and consumers alike adjust to the ‘new normal’, we’re getting a much better sense of which pandemic-induced shopping habits are here to stay.
COVID-19 has highlighted just how invaluable ecommerce services can be, leading legacy retailers to push into direct selling at a rapid pace. Yet we’ve also shifted past the era of one-off purchases for home delivery. High shipping costs are pushing consumers towards using physical channels as pick-up locations, while ecommerce subscriptions are helping to streamline the online shopping experience for time-starved shoppers.
As order fulfillment becomes increasingly complex and time-sensitive, automation is the key to meeting consumer expectations and softening the impact of ongoing labor shortages. By preparing for these 2022 ecommerce fulfillment trends, your business will be well-positioned to reap the rewards of a shifting retail landscape.
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