Fulfillment and Fraud Issues Challenge Modern Brands’ Growth: Here’s the Solution 

It’s no secret: modern brands face significant challenges as they prepare to grow and scale. Constant supply chain disruptions, rising consumer expectations, and geopolitical uncertainty test any retailer’s growth strategy. With that in mind, Radial recently launched a new survey of 200 retail decision-makers to learn more about the key challenges modern brands experience.  

We found one overarching theme: growing and scaling is hard to do. 

Modern brands can’t let these challenges stop them, however. In this article, we will uncover more insights from Radial’s latest survey, and then we will consider a path forward for scalable, long-term growth. 

At a certain point in their growth journey, modern brands must reassess their fulfillment strategies to determine how best to scale. But many are still struggling to manage fulfillment in-house, despite increasing challenges. In fact, the majority of modern brands rely on in-house fulfillment solutions with either multiple (70%) or single (59%) facilities for at least some of their fulfillment needs. Only about 40% or less rely on outsourcing to manage some or all of their fulfillment needs.  

In-house fulfillment can work for emerging brands but creates difficulties as these brands grow and operations become more complex. It is highly resource intensive, requires capital to scale effectively, and can distract brands from focusing on core competencies like operational strategy and product development. Additionally, customers expect seamless experiences and fast delivery, which many in-house fulfillment models cannot achieve consistently.

As brands grow, rising operational complexity may require that they seek a third-party logistics (3PL) partner. Though it varies somewhat by revenue size,  more than half of all surveyed brands commonly outsource fulfillment once they grow to $50M+ in revenue. 

But this comes with challenges.  

Small brands tend to have more issues with growing pains, like managing growth and scale combined with their own tech stack limitations. But as brands grow, challenges shift. Larger brands still deal with growth challenges, channel limitations, and inflexible technology, but they also begin to face higher costs and complexity for B2B orders, as well as dealing with more issues during peak. 

To grow and scale effectively, modern brands can develop a partnership ecosystem designed to support their entire supply chain and industry-specific needs. They also need to assess partners for the right balance of technology, scalability, and operational expertise necessary to solve their specific fulfillment challenges.  

Brands of all sizes face transportation challenges—but our research shows they face them in distinct ways. 

Smaller brands face fundamental transportation challenges—ones that could lose them customers. The first challenge: slow time in transit. Shoppers expect fast shipping. Per Radial research, 29% of shoppers expect 2–3-day shipping, and 45% expect 3–5-day shipping. But 64% of brands with revenues between $35M-$50M struggle with slow transit times. Over half of brands between $50M-$100M also see slow transit times as the number one transportation issue.  Slow transit times means that these brands are forced to either offer slower delivery options or run the risk of missing their delivery promises. They can’t meet customers’ delivery expectations. The result: abandoned carts and unhappy customers.  

Smaller brands also face a second challenge: high base costs. Fifty-eight percent of smaller brands face higher base costs. They may incur them because smaller brands cannot achieve the kinds of carrier discounts larger brands receive. They simply lack the volume necessary to reach higher level carrier discount tiers.

While unexpected additional charges affected 45% of all respondents, it is felt most acutely by larger brands at 53%. Larger retailers also struggle to balance speed and cost (37%), and they are often missing sophisticated rate shopping options (27%). These challenges may occur in part because these larger brands work with multiple carriers—something that is both resource intensive and complex. There may be paths forward to optimize transportation costs via industry partners known for their transportation solutions. 

Whether it is a network of partners, or a single third-party logistics provider dedicated to driving transportation success, modern brands can unlock new efficiencies and reduce obstacles that hinder brand growth. While consumers remain cautious amid ongoing economic uncertainty, brands can keep pace by reducing transportation costs and providing optimal delivery options. That means happy, returning customers and stronger bottom lines.

Logistics challenges aren’t the only ones modern brands face. Our research revealed that they are also plagued with fraud issues. While the most common types of fraud are still associated with “traditional” issues like customers claiming they didn’t receive an item after delivery confirmation or abusing returns policies, newer types of fraud are starting to emerge as well, especially as brands reach higher revenues.

Sophisticated fraud challenges increase as brands grow. And fraudsters are starting to leverage AI to trick retailers, with 5% to 10% of larger ($50M-$200M) brands stating that they are now encountering AI-driven fraud. Retailers will need to implement their own fraud prevention measures—or work with partners experienced at stopping fraudsters in their tracks. 

As fraud challenges increase, many brands consider working with integrated logistics and payment solutions providers to better protect themselves from fraud attacks. Over 50% of respondents are likely or highly likely to use payment and fraud protection services via their 3PLs. Organizations like Radial can provide solutions that solve both complex logistics and payment issues, protecting retailers from a wide spectrum of disruption.

The data is clear: Modern brands need partners that can scale with them, work with them navigate disruptions, and ultimately help them grow sales and keep customers. All while helping them reduce fulfillment and transportation costs.  

 Radial has the solution: Radial Fast Track. Radial Fast Track provides scalable, cost-effective fulfillment for modern brands, without upfront costs or long-term contracts.  

Radial Fast Track can help solve many of the challenges described above: 

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