Retail-Tech Landscape: E-Commerce Fulfillment

We expect to see stickiness in pandemic-driven online shopping habits and estimate that total US online retail sales reached $805 billion in 2021 and will reach approximately $1.2 trillion in 2025, representing a CAGR of around 10%, based on our analysis of US Census Bureau data. Brands and retailers must streamline their e-commerce operations using innovative technologies to cater to demand for rapid fulfillment, real-time updates and cross-border purchasing. This will not be easy given existing challenges in inventory management, order fulfillment and returns. This Retail-Tech Landscape comprises selected startups globally that can help retailers improve their e-commerce fulfillment operations and thus enhance overall customer experiences. We have identified 45 startups across the following categories:

• Micro-fulfillment
• Order-picking robots
• Product delivery
• Returns
• Sustainable packaging
• Cross-border e-commerce

For innovators in last-mile delivery, see our separate Retail-Tech Landscape. Key Trends in E-Commerce Fulfillment  Below, we highlight two key industry trends in online order fulfillment. 1. Speed and agility in e-commerce operations will become critical for business success Following the surge in online shopping, we believe that speed in e-commerce operations including order picking, fulfillment and inventory replenishment will be imperative for retailers’ success. To get products into consumers’ hands as quickly as possible, brands and retailers should leverage artificial intelligence (AI) and machine learning (ML) capabilities throughout the operational journey, from order receipt to last mile.

• Walmart has announced plans to open a high-tech fulfillment center in Mississippi in spring 2022 to support its supply chain network and e-commerce business in the US mid-South. The new center spans over 1 million square feet and will store items to be picked, packed and shipped directly to consumers for next-day deliveries.
• The move is part of Walmart’s initiative to ramp up its supply chain through high-tech local fulfillment centers. The facilities will use AI for palletizing products and employ automated bots to retrieve items from within the center for faster order fulfillment.

As most brands and retailers already have an online presence, those that focus on speed and agility in their operations will stand out. 2. Cross-border e-commerce will gain momentum in 2022 and beyond Coresight Research has identified cross-border e-commerce as a key US e-commerce tech trend for 2022. While cross-border commerce presents an opportunity for retailers to expand their customer base in international markets it will require re-evaluation of major business operations, including marketing, order fulfillment and payments.

• Some 76% of shoppers made a cross-border purchase in 2021, up from 69% in 2019, according to a 2021 global survey of 2,021 respondents aged 18–54 conducted by cross-border e-commerce platform Flow Commerce.
• Apparel (57%), fashion accessories (34%), and beauty and personal care (34%) were the most popular categories for cross-border purchases, according to the survey.

Figure 1 compares consumers’ cross-border e-commerce purchases, by country.

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Figure 1. Cross-Border E-Commerce Shopping by Country [caption id="attachment_143607" align="aligncenter" width="700"] Base: 2,021 consumers in the 18–54 age group
Source: Flow Commerce [/caption]   Pandemic-led travel restrictions and limited access to international stores have also boosted cross-border e-commerce. Legacy retailers in Western countries can take advantage of shoppers in fast-growing markets such as China and India.

• China’s State Council issued a statement in February 2022 to approve the establishment of further cross-border e-commerce pilot zones (designated areas in cities to promote cross-border online commerce). This will involve experimentation with new business models, regulatory policies and technical standards to boost foreign trade and the country’s economy. The additional zones will be set up in 27 cities across China, following a surge in cross-border e-commerce amid the pandemic.
• China’s cross-border e-commerce imports and exports saw a 15% increase year over year to ¥1.98 trillion ($312.3 billion) in 2021, with e-commerce pilot zones significantly contributing to the growth, according to official data released by China’s State Council on January 15, 2022.

Retailers must streamline their business operations, including order fulfillment and local payment processing to meet increasing demand—this can be supported by seeking out partnerships with companies offering end-to-end cross-border commerce solutions.

Retail-Tech Landscape: E-Commerce Fulfillment—Infographic

Retail-Tech Landscape: E-Commerce Fulfillment, by Category

Micro-Fulfillment: Companies providing micro-fulfillment solutions for e-commerce retailers [wpdatatable id=1815 table_view=regular] Order-Picking Robots: Companies providing robotic technology for use in order picking [wpdatatable id=1816 table_view=regular] Product Delivery: Companies helping with management and delivery of e-commerce orders to shoppers [wpdatatable id=1817 table_view=regular] Returns: Companies simplifying the returns process for shoppers and retailers [wpdatatable id=1819 table_view=regular] Sustainable Packaging: Companies offering reusable and recyclable packaging solutions to minimize environmental impact [wpdatatable id=1820 table_view=regular] Cross-Border E-Commerce: Platforms that help with managing and simplifying cross-border online transactions [wpdatatable id=1821 table_view=regular]