The Fifth Wave of E-Commerce – Multi-Channel Merchant

Have you ever had the experience of seeing the same stranger walk past you in the grocery aisle multiple times, only to realize they were filling an e-commerce order?

What about buying an item listed online, but out of stock when you check the shelves? If so, you’ve seen for yourself why the latest flourish models need a redesign.

No shopper wants to feel like they’re racing to the internet to grab the last onion in the produce section of Whole Foods on a Sunday afternoon, or feel the frustration of knowing the item they want is in store, but not available to him.

In-store fulfillment models, including on-demand delivery services and Buy-in-Store Pickup Online (BOPIS), proliferated during the early days of the COVID-19 pandemic and are being credited on earnings calls to increase the revenue potential of brick-and-mortar stores and keep margins stable.

And yet, on-demand delivery and BOPIS fail to consider the entire customer journey, especially one that includes unfortunate souls pushing a cart down the aisles of a store to complete their purchase at a physical checkout. That’s enough to make the metaverse appealing.

If the best of e-commerce technology can only imagine sending strangers into the store to facilitate a pickup instead of the customer themselves, are we really enabling new behaviors?

The challenge today is to understand that in-store fulfillment is a workaround, not a scalable solution, for retailers moving further into e-commerce. If your physical buyers are having a bad experience because of the technology processes you’ve enabled, you’ve let them down in the overall customer journey.

Store struggles

In-store order fulfillment causes disruptions and delays at the point of sale. Shelves are bare in grocery stores on weekends and peak hours, as gig workers crowd the aisles and wipe out the stores of items eventually delivered to homes.

BOPIS models are designed to benefit the retailer, not the customer, essentially outsourcing the last mile to customers themselves by shifting the burden of transportation and delivery. BOPIS further forces employees to take time off from other tasks in search of products set aside for pickup by customers who then confuse payment lanes and obstruct the flow of traffic.

More importantly, demand planning and inventory allocation can never be fully accurate when fulfilling e-commerce orders outside of retail stores. There is no way to update stock levels in real time and orders are often only partially filled as products are promised to different channels, inevitably leaving some unlucky shoppers with a poor customer experience. When did it become acceptable to systematically deceive consumers?

Redefining brick and mortar

As e-commerce continues to transition into the primary mode of purchase for consumers, we are witnessing the emergence of the fifth wave of e-commerce. Brick and mortar no longer means retail stores, but warehouses and fulfillment centers dedicated to e-commerce orders, ensuring accurate inventory levels and setting retailers up for long-term success.

We are already seeing retailers like Kroger adopt this model, opening fulfillment centers and operating delivery services in markets where it does not operate retail stores, aimed specifically at serving its growing base of e-commerce customers.

Instacart did the same, recognizing that their future lies in making the logistics of food delivery easier — not cluttering the aisles of local grocery stores.

Consider the customer journey

Retailers need to consider the impact of their e-commerce practices on the overall customer experience. Whether shoppers have to throw elbows in the dairy aisle or wander stores with shelves that have been emptied to accommodate online orders, many are lost in the mess when in-store fulfillment takes priority.

With the emergence of connected fulfillment networks, linked by software that centralizes order sources, inventory availability and delivery options in one place, brands are able to deliver the customer experience that any customer is looking for, whatever their preference.

A positive customer experience for all can be restored by using warehouse fulfillment to deliver customers to their homes and returning the in-store experience to shoppers who choose it.

Frank Garcia is responsible for operations for flow space