Deep In The Holidays: Ecommerce Home Delivery Places Intense Pressure On Retailers, CPGs

Retailers and consumer packaged goods (CPG) companies are scrambling to meet customer demand for fast home delivery of products, citing outdated supply and delivery chains, lack of order fulfillment centers near customers, and high capital costs of fixing these problems as major challenges and roadblocks. 

Same-day or next-day delivery is attainable, even as online purchases increase.

The CMO Council released a report in partnership with the Business Performance Innovation (BPI) Network to gain insights from executives in retail, ecommerce, consumer products and firms involved in consumer supply chains.

Just 3% of industry survey respondents surveyed said their companies are very capable of meeting current expectations for fast home delivery.

The report -- Increase Your Pace in the Ecommerce Race, commissioned by Attabotics, a robotics and software company -- examines how consumer demand for ecommerce home delivery is placing intense pressure on retailers and consumer product companies.

The study is based on a survey of 153 executives in retail, ecommerce, consumer products, distribution and consulting firms involved in consumer supply chains. 

Ninety-six percent of survey participants said they believe the industry must make dramatic or significant changes to supply and delivery chains to keep pace with consumer expectations

Some 84% of respondents say they are experiencing increased financial and resource pressures due to consumer demand for fast home delivery

And 99% expect the shift to ecommerce and home delivery of products will continue beyond the Covid pandemic.

The findings also suggest the industry is considering new cooperative approaches to transform the supply chain, including joint ventures for creating shared micro-fulfillment centers in urban areas closer to customers. Some 97% of respondents say they would consider new joint venture approaches to rebuilding supply and fulfillment, including 42% who already expect adoption of these shared models.

More than three-quarters -- 77% -- of respondents point to Amazon as a major competitive threat to their business due chiefly to the company’s massive ecommerce infrastructure and selection of available products.

A third of respondents believe they could increase revenues by more than 20% by instituting same day delivery; another 51% estimate same day delivery would increase revenue by 10% to 20%.

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