KING OF PRUSSIA, PA — A recent survey by Radial, Inc., a bpostgroup company, has uncovered significant hurdles retail brands face in managing fulfillment operations. The survey, which polled 200 retail decision-makers, highlights challenges such as scaling logistics, leveraging new sales channels, and managing transportation costs, particularly as consumer expectations for fast and seamless delivery continue to rise.
The survey found that 70% of brands still manage fulfillment in-house, with 59% operating from just one distribution center. This method poses scalability concerns as brands grow. Nearly half (47%) of respondents cited difficulties in managing growth under their current fulfillment strategies, while 44% faced obstacles adding new channels and capabilities. Additionally, 40% struggled with outdated or ineffective technology stacks.
“As modern retailers scale operations and navigate customer demands, many are finding that in-house fulfillment alone is not sustainable and stretches their internal resources,” said Tom Schmitt, CEO of Radial. “Our research shows that as brands near the $50M revenue mark, outsourcing to a logistics partner is much more common, showing there is an inflection point where partnership with a trusted 3PL helps unlock efficiencies and future-proofs operations against the dynamic retail landscape.”
The data revealed a clear shift toward outsourcing as brands mature. Outsourced fulfillment to third-party logistics providers (3PLs) becomes the preferred strategy for 57% of brands in the $50-100M revenue range, rising to 76% for companies earning $150-200M.
The Evolution of Sales Channels
Retail websites continue to dominate sales strategies, serving as the primary channel for 72% of brands surveyed. Categories like home furnishings (89%), apparel (71%), and sporting goods (69%) are particularly reliant on direct-to-consumer (DTC) platforms to build customer relationships and brand identity.
Still, brands frequently turn to large marketplaces, with Walmart and Amazon leading for new sales opportunities. Each was noted by 56% of respondents as a preferred channel. However, reliance on these platforms comes with challenges, such as high fees and complex fulfillment requirements; nearly half of the brands scaling back on marketplace efforts cited these factors. Emerging platforms like TikTok Shop and Temu stirred interest but remained lower priorities.
Transportation Struggles
Transportation costs also remained a pain point, with 45% of respondents highlighting surprise fees and charges as a recurring challenge. Brands earning more than $100M experienced this issue most acutely, at 53%. Meanwhile, smaller brands under $50M struggled with high base shipping costs more frequently (58%), reflecting their limited buying power with carriers.
For all retailers, working with experienced 3PLs can help address these challenges by managing complex logistics and securing favorable rates, allowing brands to focus on their growth strategies.
Radial’s findings emphasize the importance of partnerships in helping retail companies scale against a backdrop of rising fulfillment costs, evolving consumer preferences, and competitive pressures. By collaborating with logistics and channel experts, brands can reduce operational barriers and better position themselves for long-term success.
The survey’s results underscore the critical need for modern retailers to adopt flexible, tech-savvy fulfillment approaches as they navigate a competitive and rapidly shifting retail landscape.
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