E-commerce survey highlights retail challenges

The e-commerce market is growing rapidly, with global sales expected to reach $6 trillion this year. This growth is a victory for innovative brands and retailers that have mastered online sales, but a dark cloud hangs over the industry: shipping and fulfillment challenges.

In UPS Capital’s latest survey of retailers and consumers, “The 2024 Mid-Year Guide to Shipping Excellence,” researchers found weaknesses in several areas. While most retailers are confident they can handle a 30% increase in order volume, there is a gap between their capabilities and consumer expectations. Surprisingly, 42 percent of surveyed retailers and brands said orders take at least two days to be fulfilled, while almost half of consumers surveyed said they expected purchases within three days (excluding e-commerce giants like Amazon) .

The report’s authors said this disconnect highlights the need for better communication and transparency throughout the procurement process.

Other findings include retailers citing rising shipping costs (52 percent), damaged products (40 percent) and lost items (37 percent) as a greater threat than demanding faster delivery. The report also found that retailers and fashion brands typically face more specific challenges, such as limited warehouse space, quality control concerns and inventory gaps.

The study also revealed that the world is shrinking. Nearly half of retailers surveyed said they ship more than 20 percent of their orders overseas, while 73 percent of consumer respondents said they make purchases abroad. However, this global reach comes with complexity. Nearly three-quarters of retailers surveyed said they suffered from international shipping problems such as delays, damage or theft last year, likely due to busy overseas ports.

There are other dangers as well. The report found that almost half of retailers surveyed suspect that more than 20 percent of returns are fraudulent. Consumers also share this concern – 32 percent believe return fraud is on the rise. Manual verification processes are a major obstacle, with over 40 percent of retailers struggling to reduce fraud risk due to time constraints. Lax returns policies and pressure to reassure customers further complicate matters.

On the other hand, consumers are more worried about counterfeit goods. Forty-one percent of consumers surveyed believe the number of counterfeits is on the rise, and 23 percent have received a counterfeit product instead of the real thing. This issue appears to have the greatest impact on Generation Z, with 43 percent of respondents in this demographic having experienced counterfeit fraud.

The report identified trends such as the use of alternative delivery locations. More than 80 percent of consumers surveyed said they are open to using pickup points, such as UPS access points or lockers, to increase safety, convenience and speed.