More and more people—especially young people—are moving into cities. To reach this increasingly important market segment, retailers need to find a profitable and efficient way to do urban fulfillment. There is no doubt that omnichannel retailing is having a significant impact on how retailers fulfill and deliver customer orders.

With 2018 U.S. E-commerce sales projected to eclipse US$526 billion, consumers are increasingly demanding that they be able to place orders through any channel they like and that they be able to receive them when and where they want. At the same time that retailers are grappling with this revolution, they are facing a key demographic change that is significantly complicating order delivery and fulfillment: the growth in urban population.

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Following decades of population migration to the suburbs, there is a shift back to urban areas. Between 2010 and 2015, the core cities of the 33 largest metro areas in the United States added 1.52 educated millennials for each one added to their surrounding suburbs. Fastest customer fulfillment speed by method These urban markets provide fertile prospects for omnichannel retailing.

With limited household storage capacity, parking for vehicles, or shopping time, newer city dwellers are prime candidates for rapid omnichannel fulfillment. When these newer customers are coupled with long-time city residents who lack personal transportation and shopping options, retailers have a significant demand growth opportunity.

Fulfilling small volume, high frequency, rapid-velocity omnichannel orders in a highly congested urban setting, however, adds complications to the already challenging task of suburban and rural omnichannel order fulfillment. Rising real estate costs make it impractical to establish high-capacity urban fulfillment centers that can provide efficient access to a wide inventory assortment. Vehicle parking challenges and proposed restrictions on delivery times in urban core areas can limit the ability to support consistent, same-day delivery. And, serving customers in high-rise offices and limited-access residential buildings adds to delivery complexity, time, and cost. Finale 2009 download full version. So, despite the perceived potential, fulfilling urban omnichannel demand profitably poses quite a challenge. The additional complications are not deterring omnichannel retailers. Purveyors from Amazon to Walmart are pursuing opportunities created by the intersection of e-commerce and the revival of city living.

In the recently published 'Eighth Annual State of Retail Supply Chain (SRSC) Report,' nearly 60 percent of the research participants said they are active in urban fulfillment. Furthermore, that interest is increasing, with 80 percent of all respondents indicating that urban fulfillment is a growth area for their company. Additionally, the SRSC report found that 78 percent of respondents believe that the value derived from the pursuit of urban fulfillment outweighs the costs.

Urban logistics is the new battleground'in an SRSC interview, a supply chain executive indicated that flawless fulfillment and delivery will be essential for capturing and retaining urban market share. Winning the battle for city shoppers will not be easy. Retailers must establish networks with the capabilities to fill and deliver product to urban consumers with urgency and efficiency.