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Using AI for fulfilment within the Retail Customer Journey

Full report: The impact of AI on the UK retail industry

Using AI for fulfilment within the Retail Customer Journey

How Artificial Intelligence is being used in fulfilment systems within the customer journey

One of the toughest and sometimes most expensive challenges for brands and retailers is the fulfilment of orders generated online. Customers want their online order delivered in the shortest possible time, free, or at minimal cost. Companies have been deploying AI in this area with providers assisting them to optimise all aspects of their logistics (e.g. Satalia).

Retailers need to ensure their current delivery systems are up-to-date and that they have future capacity, not least because the last mile of a delivery can often reach or exceed 50% of the overall transportation costs (McKinsey). This is why drones and AI-assisted in-home delivery are being seen as the future, and will have a significant impact on the Fulfilment stage of the Retail Economics Customer Journey.




The average drone can reach 100mph and safely carry 2.2kg, and with a deployment cost of 78p per shipment; hence it is easy to see why retailers are keen to see drone deliveries come about. However, this enthusiasm has yet to completely transfer to the consumer. 42% of shoppers forecast that drone deliveries will never become mainstream, while a further 30% believe it will be at least five years before they are commonplace.

“42% of shoppers think that drone deliveries will never become mainstream”

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This work forms part of a wider piece of research and is a downloadable in pdf format


Consumers don’t think drones will become mainstream

Survey question to consumers: thinking about shopping online; I think that ‘drone deliveries’ will become mainstream within:

Source: Retail Economics/CMS, 2019


In-home delivery

Not so long ago, a well-known supermarket chain hit the headlines when a delivery driver entered a customer’s home to deliver and store away groceries that a customer had ordered online. Sentiments on this were polarised. Some thought it was terrifying, while others saw it as convenient; and in the future, this may be more commonplace. However, the key here is customer trust. This can be partially satisfied with AI-implemented security techniques to identify faces, vehicles and behaviours.

Only one in six customers polled were comfortable with the concept of in-home delivery, but discomfort is often high with new technologies until they are proven to be safe and non-invasive.


In-home delivery… the jury’s still out with consumers

Survey question to consumers: I would trust a delivery driver to have ‘controlled and monitored’ access to my home (using an AI-powered delivery service) to ensure my package was delivered on time if I was out.

Source: Retail Economics/CMS, 2019


In-home delivery… companies are more bullish than consumers

Survey question to retailers: I think consumers would trust an AI-driven, home delivery service whereby authorised delivery drivers would have controlled and monitored access to their homes in order to ensure packages were delivered on time.

Source: Retail Economics/CMS, 2019


The importance of retailers getting fulfilment right cannot be understated, and AI-related applications within supply chains and logistics will continue to cause disruption in the immediate future, particularly around distribution and inventory management.

Distribution is being revolutionised with autonomous vehicles and self-driving freights, such as Uber trucks operating in Arizona. 36% of retailers said they believed autonomous vehicles would have the greatest impact on the consumer retail industry in general.

Lastly, fully automated inventory management processes also provide advantages over systems that rely partially or solely on human diligence. Next generation inventory management systems are using AI for image recognition and real-time data sensing to more accurately manage stock levels as well as predict future demand.

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Found this short article interesting?

This insight article forms part of a thought leadership report entitled “Disruption 2.0 – Here we go again: AI in Consumer and Retail”. It was produced by Retail Economics in partnership with CMS and looks at consumers across all age groups in the UK and explores their attitudes regarding AI technologies they currently interact with, and the cutting-edge applications emerging. To contrast this, the research also includes a business survey of senior leaders from Consumer and Retail organisations, FMCG manufacturers and fashion and luxury brands, to gauge their sentiments towards disruptive technologies and the opportunities and challenges they currently face.

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