The E-Commerce Fulfillment Challenge for Growing Retailers: Automation for the Other 90 Percent - Part 2

By Beth Ann Ferner, OPEX Material Handling

As was stated in Part 1 of this article, a problem that almost all e-commerce retailers are grappling with these days is how to adapt fulfillment requirements to meet the exponential growth of online ordering.  Online purchasing in the United States is growing by more than 17 percent annually, according to the U.S. Department of Commerce.  By 2017, continued double-digit annual e-commerce growth is expected to reach 10 percent of total retail sales in the U.S., according to market analysts, Forrester Research.  Interestingly, 80 percent of this revenue is coming from only about 10 percent of all e-commerce players.

For e-commerce retailers, the challenge of handling their Internet fulfillment lies with predicting what their order volume will be in three, five or even ten years out.  Unfortunately, the real conundrum is that this e-commerce growth is entirely unpredictable.  Because unpredictability is a constant factor in e-commerce, flexibility and scalability in fulfillment operations if absolutely critical.  As an e-commerce company’s needs increase or decrease, its pick, pack and ship model should be able to accommodate these fluctuations.

Quite different from a large Internet retailers, however, the vast majority of small-and mid-sized e-commerce companies, which accounts for about 90 percent of all retail Internet suppliers, are not highly automated and are challenged to justify the capital equipment ROI of automated systems.

Please log in or register below to continue reading.