Retail-Tech Landscape: E-Commerce Fulfillment and Returns

E-commerce experienced a surge in 2020 amid the Covid-19 outbreak globally, and sales growth in the online channel remains strong: For example, in the US, nonstore retailers’ sales were up 14.8% year over year in April 2021 and up 41.7% versus April 2019. The digital acceleration presents huge opportunity for retailers, but it is imperative for retailers to enhance the overall shopping experience for their customers in order to remain competitive in the digital era. This is not straightforward, with multiple 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 the overall customer experience. We have identified 42 startups across the following categories:

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

Key Trends in E-Commerce Fulfillment and Returns

Below, we highlight two key industry trends in the fulfillment of online orders. 1. Consumer demand is rising for efficient, cheap delivery services  Last-mile delivery is an important differentiating factor for success and plays an important role in improving the overall shopper experience. According to Reuters’ Supply Chain Last Mile Report 2020 which surveyed 314 supply chain executives, some 35% of the total respondents cited reducing logistics costs as their biggest last-mile delivery challenge, while 21% are challenged in delivering parcels on time. In addition, only 18% of the respondents believe they meet their shopper expectations from last-mile delivery experience, according to the same report. We believe providing transparency and offering shoppers more control on how and when they receive their parcel can substantially improve the shopper experience.

• Read our separate reports on this topic: Trends To Watch in Last-Mile Delivery (part of our Reshaping Supply Chains for the 2020s series) and Retail Reimagined: Advancing Last-Mile Delivery with Technology.

2. Returns are costly, complicated and environmentally damaging Returns are more prevalent in e-commerce than retail in general, meaning that the recent surge in online shopping has resulted in a rise in returns. According to the NRF (National Retail Federation), the US returns rate for online purchases was 18.1% (amounting to $102 billion) in 2020—much higher than the overall retail industry rate of 10.6%. Returns add pressure to retailers’ bottom lines with additional logistics and labor costs, particularly returns by mail versus in-store. Challenges in handling returns include transitioning to new seasonal merchandise—which in many cases translates to sunk costs. However, a flexible returns policy could potentially attract consumers and boost sales: The Coresight Research US Consumer Tracker found that almost four in 10 survey respondents that had returned products in the past 12 months (as of November 2020) stated that retailers’ returns policies influence where they shop. In addition, there is rising consumer awareness of the impacts of their shopping decisions on the environment. Retail returns have an adverse impact on the environment across landfill, carbon emissions, and packaging and plastic waste. Retailers must therefore focus on reducing the overall returns rate by implementing technology and logistics solutions.

• Read our separate report on the role of technology in returns reduction, which considers environmental impacts and sustainability initiatives, with a focus on the US market.

Retail-Tech Landscape: E-Commerce Fulfillment and Returns—Infographic

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

Micro-Fulfillment: Micro-fulfillment solution providers for e-commerce retailers [wpdatatable id=957 table_view=regular]   Order-Picking Robots: Companies providing robotics for order picking [wpdatatable id=958 table_view=regular]   Product Delivery: Companies assisting in managing and delivering e-commerce orders to shoppers [wpdatatable id=959 table_view=regular]   Returns: Companies simplifying the returns process [wpdatatable id=960 table_view=regular]   Sustainable Packaging: Companies offering reusable packaging solutions [wpdatatable id=961 table_view=regular]   Cross-Border E-Commerce: Platforms to manage, facilitate, accept and ease cross-border transactions [wpdatatable id=962 table_view=regular]