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40% of Parcels Delivered Within 2 Hours By 2028

April 13, 2018
A new study shows that executives expect the most disruptive technologies to be drones (39%), driverless/autonomous vehicles (38%), wearable and mobile technology (37%) and robotics (37%).

In response to today’s online-buying, smartphone-wielding consumer that expects a seamless, faster purchasing journey, 78 % of logistics companies expect to provide same-day delivery by 2023, according to a new study, "The Future of Fulfillment Vision Study," by Zebra Technologies. Corp.

Additionally these companies expect to provide 40%  of deliveries within a two-hour window by 2028.

In order to achieve this goal, 87% of survey respondents expect to use crowdsourced delivery or a network of drivers that choose to complete a specific order by 2028.

“Driven by the always-connected, tech-savvy shopper, retailers, manufacturers and logistics companies are collaborating and swapping roles in uncharted ways to meet shoppers’ omnichannel product fulfillment and delivery expectations,” said  Jim Hilton, Manufacturing and Transportation and Logistics Global Principal, Zebra Technologies.

“Our survey found that 89% of survey respondents agreed that e-commerce is driving the need for faster delivery,” Hilton added. “ In response, companies are turning to digital technology and analytics to bring heightened automation, merchandise visibility and business intelligence to the supply chain to compete in the on-demand consumer economy.”

The following are some key findings from the survey:

--Only 39% of supply chain respondents reported operating at an omnichannel level. The survey found reducing backorders was the biggest challenge to reaching omnichannel fulfillment for one-third of respondents followed by inventory allocation and freight costs.

--76% of surveyed retailers use store inventory to fill online orders, and 86% of retail respondents plan to implement buy online/pick up in store in the next year. Retailers are investing in retrofitting stores to double as online fulfillment centers and shrinking selling space to accommodate e-commerce pickups and returns.

--Globally, 87% of respondents agreed that accepting and managing product returns is a challenge. The increase in free and fast product delivery corresponds with an increase in product returns, a costly concern that retailers struggle to manage efficiently across many different purchasing models. Seven in 10 surveyed executives agree that more retailers will turn stores into fulfillment centers that accommodate product returns. More than 60% of retailers that currently do not offer free shipping, free returns or same-day delivery plan to do so while 44% expect to outsource returns management to a third party.

--Although 72% of organizations utilize barcodes today, 55% of organizations are still using inefficient, manual pen-and-paper based processes to enable omnichannel logistics. By 2021, handheld mobile computers with barcode scanners will be used by 94% of respondents for omnichannel logistics. The upgrade from manual pen-and-paper spreadsheets to handheld computers with barcode scanners or tablets will improve omnichannel logistics by providing more real-time access to warehouse management systems.

--Radio-frequency identification (RFID) technology and inventory management platforms are expected to grow by 49% in the next few years. RFID-enabled software, hardware and tagging solutions, offer up-to-the-minute, item-level inventory lookup, heightening inventory accuracy and shopper satisfaction while reducing out of stocks, overstocks and replenishment errors.

--Future-oriented decision makers revealed that next generation supply chains will reflect connected, business-intelligence and automated solutions that will add newfound speed, precision and cost effectiveness to transportation and labor. Surveyed executives expect the most disruptive technologies to be drones (39%), driverless/autonomous vehicles (38%), wearable and mobile technology (37%) and robotics (37%).

The following are findings based on regional needs:

--The need for inventory accuracy will continue to rise in North America. Manufacturers, logistics companies and merchants ranked current inventory accuracy at 74% and reported needing to be at 83% to handle the rise of omnichannel logistics.

--Retailers in Europe and the Middle East are filling digital orders directly from their physical stores. Retailers and operations leaders are calculating that a network of stores can get digital orders faster and more efficiently than a handful of centralized warehouses. More than 80% use store inventory to fulfill orders and 29% expect this to increase by greater than 10% over the next five years.
95% of respondents in Asia Pacific rate e-commerce as the driving need for faster delivery. The region expects to implement same-day delivery faster than any other region, and 42% of those surveyed ranked drones as one of the most important disruptive technologies.

--Shipping fees and returns are undergoing a makeover in Latin America. Approximately 40% of respondents plan to discontinue free shipping, 55% expect to end free return shipping and 61% forecast the elimination of separate returns facilities that are managed by third-party companies.

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