After robotics and automation (cited by 19% of respondents), order management systems (OMS) and inventory management systems were the highest priority for tech investment in 2019, based on the MCM Outlook survey, noted by 12% of respondents each.
“When you’re carrying a depth of inventory in multiple locations across the country, you need technology to manage that,” said Perry Belcastro, SVP of Fulfillment Services for 3PL Saddle Creek Logistics Services. “A robust OMS can help manage a highly complex distribution network to optimize delivery time and cost while providing real-time product visibility to consumers.”
The state of the art for OMS and inventory management, as well as WMS and automation controls like WES and WCS, has advanced significantly in recent years as omnichannel operations have added layers of complexity to the flow of inventory and orders between DCs and FCs, stores, manufacturers and marketplaces. Also, the latest systems do a better job of helping companies trim rising shipping, logistics and supply chain costs.
This trend is reflected in the MCM Outlook results, as more companies have implemented various systems to drive greater efficiency and cut costs. Among respondents, 61% said they currently use an inventory management system, followed by WMS (57%), OMS (54%), TMS (32%) and parcel rate optimization tools (25%).
David Strobelt, former CIO of Modell’s Sporting Goods, said customer expectations have raised the bar considerably for retail and ecommerce companies in terms of tech investment imperatives, especially for OMS.
“Retailers nowadays consider a complete dashboard with performance metrics and drill-down analytical tools basic table stakes to manage their real-time inventory and order fulfillment tasks,” Strobelt said. “There is also a growing desire for advanced machine learning algorithms to automate fulfillment optimization and capitalize on opportunities at scale, while quickly making course corrections as unique customer issues occur.”
Free or Cheap Still Trumps Fast – But They Want That, Too
While increasing rollouts of same-day and next-day delivery in urban markets continues to get a lot of attention, consumers by and large still favor free or low-cost shipping, convenience and hitting the promised delivery above all. But fast is still sexy and attention-getting.
Respondents to the MCM Outlook survey have gotten the memo on rising expectations for delivery speed. When asked if they offered same-day delivery, 33% said yes, up from 18% in 2018, while 79% offer next-day delivery, up from 45% a year ago. The vast majority (87%) offer two-day shipping to hit the Prime expectation, up from 70% a year ago.
According to a 2019 survey of 1,000 consumers in the U.S. and Canada by Metapack, 61% of them cited free shipping as the top consideration for the majority of their purchases. However, the survey also found many willing to pay expedited fees for faster delivery or a more convenient option: 81% in the U.S. and 69% in Canada expect to pay extra for one-hour, same day, next day or Sunday delivery.
“Everyone wants no cost, next day or same day, so retailers need to leverage a network of locations and manage inventory across all of them, positioning DCs as close to consumers as possible,” said Belcastro. “If a retailer puts up a free same-day shipping offer, people will bite but the question is, do they need it? What’s really more important to the consumer based on their delivery needs is having it there when you say it will be and meeting their fulfillment expectations.”
Want to find out more about the results from the 2019 MCM Outlook survey and learn about ecommerce fulfillment trends? You can download the report here.