Hyper-Local Fulfillment 101: Permanent Changes in Buyer Behavior

Alex Haines | 14 October 2020

It’s important to understand how changes in consumer buying behavior have created a fundamental shift to supply chain fulfilment strategy. Consumer buying behavior has changed dramatically in e-commerce, buy-online, pick-up in-store (BOPIS) and in-store.

This supply chain evolution has created the need for hyper-local fulfillment, which also comes with its own challenges. Customers expect things like free or low-cost shipping, same or next day delivery, hassle-free returns and inventory to be always in stock, just to name a few.

Prior to the COVID-19 pandemic, customer adoption of BOPIS was increasing rapidly. Since the pandemic began, demand for BOPIS and curb-side pick-up surged exponentially. These increases created the need for distribution strategies to undergo major changes.

Traditionally, product went from a distribution center (DC), straight to the store where end-users purchased. Now, we are seeing numerous brands adopting omnichannel fulfillment – DCs are replenishing stores, drop-shipping each orders for BOPIS and shipping directly to the end-users – all from the same facility.

Looking ahead, there is an expectation for retailers to bring fulfillment directly into back of store or hyper-local dark stores from which end users can pick up orders. The graphic below explains more:

 

The shift to “future-omni” is accelerating rapidly since the pandemic began, but there are also numerous pain-point considerations for retailers; increased shipping and labor costs, SKU proliferation, social-distancing measures and the increasing number of any kind of order. To address these, retailers are shifting to automation.

Microfulfillment automation can reduce final-mile delivery costs, increase efficiency in order picking and labor and keep pace with rapidly growing SKU profiles. Popular technologies for microfulfillment include AutoStore, OPEX Perfect Pick, Tompkins t-Sort and Exacta intralogistics software.

The recorded webinar dives much deeper into these topics as well as a case study and other key considerations for microfulfillment.

Here are key timestamps:

• Customer Buying Behavior Changes: 3:04
• Common Pain Points: 14:56
• Key Considerations: 23:51
• Requirements for Successful Automation: 27:42
• AutoStore: 28:59
• Case Study: 35:34
• Q&A: 39:29

Author: Alex Haines