Member Exclusive   //   March 14, 2024

Research Briefing: How retailers are upgrading their fulfillment strategies

By Li Lu

In this edition of the weekly briefing, we share newly released data from Modern Retail+ Research’s yearly index that focuses on how retailers have changed their fulfillment strategies.

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The State of Fulfillment: A Retailers’ Playbook

Breaking News: This week, Modern Retail+ Research published an update of our Modern Retail Index (MRI) on fulfillment strategies, in which we provide an in-depth look at the current state of retailer fulfillment. The updated playbook examines how different industries are approaching how to best get products to end consumers and how recent economic turbulence has affected those strategies.

The MRI collects data from 30 retailers and scores the data into dimensions to create a total index average score as a benchmarking tool. The ease of fulfillment dimension of our rubric assesses retailers across four different areas: Product Accessibility, Post Purchase, Returns and Payments. Our industry coverage includes the following cohorts: Big Box, Drugstore, Dollar Store/Off-Price, Home Goods, Amazon and, newly added, Specialty Retail.

Questions: What fulfillment strategies are working for retailers? What are the key components of a successful fulfillment strategy? Who are the top players?

Answers From Research:

As e-commerce sales in the U.S. rise, so does the need for retailers to build stronger distribution networks to fulfill these online orders. The “Amazon Effect” has been coined by industry experts for the effect Amazon’s digital fulfillment capabilities have had on customer’s expectations. Consumers now prioritize quick and easy shopping experiences with ultra-fast delivery speeds, free and flexible returns, on-demand package tracking and customer service, and convenient payment options. 

To further highlight the Amazon effect, Morning Consult found that eight out of 10 shoppers cite convenience as a top motivator growing in importance for them to shop online. To meet customer’s expectations for retailers, necessary attributes survey respondents say retailers must accommodate is free shipping (76% of responses), in-stock products (71% of responses), package tracking (68% of responses), fast shipping (66% of responses) and free returns (63% of responses). 

Within the index, the big-box and specialty retail cohorts were top performers. Big box stores revisited their distribution and re-imagined the shopping experience while specialty retail focused on omnichannel touchpoints that allowed for easy fulfillment options for consumers.

Read the first installment of the Modern Retail Index, where we took a look at the digital platforms retailers have modernized to cater to customers’ online needs.

Want to learn more: Modern Retail+ Research’s updated index on fulfillment strategies examines the current state of fulfillment and its main players.


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