Logistics and Customer Service

We reviewed delivery and return propositions across retailers to evaluate whether their fulfilment offers meet today’s customers’ increased expectations of ease and convenience. Customer service was also assessed, from the number of communication channels to live-chat offers and response times.

Online retail has been fuelled by improvements in logistics, and the ability to connect with customers in more digital-savvy ways. But there is a breadth of delivery and customer service options, the appropriateness of which varies by sector. Ultimately, convenience is key.

Top 12 leading retailers in the logistics and customer service category

Rank Retailer %
1 Asos 72.6
2 Amazon 67.0
3 Sainsbury’s 64.2
4 Asda 63.4
5 Ocado 62.8
6 New Look 61.2
7 Ao.com 60.9
8 JD Sports 59.8
9 Argos 59.5
10 Wickes 58.4
11 House of Fraser 58.1
12 Monsoon 57.8

Delivering convenience

With price competition particularly intense online, delivery and returns offers are key differentiators when choosing between retailers.

New Look, in a bid to address its recent sales slump, has made improving its fulfilment service a key investment priority. It believes that convenience is one of the big differentiators in the fashion market.

Although online fulfilment costs weigh on margins, free delivery is provided by 71% of retailers. To protect profitability, 59% of retailers set a minimum spend for free delivery.

Minimum spends are important in categories where the average basket value is typically low, such as health and beauty retailers. For instance, Boots requires a spend of at least £45 to make free delivery viable.

This protects profitability, and partly explains why subscription delivery schemes – such as unlimited next day delivery – are not common place, offered by less than 10% of retailers.

Next day delivery is offered by 82% of retailers, and is particularly attractive in sectors which capture last minute purchases, typically fashion and gifting.

Perhaps more than speed though, time of delivery should be considered.

Retailers would benefit from adapting to typical lifestyle habits. Around two-thirds of the UK workforce work a 9am to 5pm five-day week, yet less than half (45%) of retailers offer evening delivery. There’s a larger a gap in weekend delivery, with only a third offering a Sunday service.

Stores as fulfilment hubs

For many multichannel retailers, same-day delivery is simply not a viable option, unless stores can act as hubs for online orders. Argos is able to offer same-day delivery by leveraging the largest stores in its 800-strong estate as hubs to fulfil online deliveries. 

Those with limited or no stores have made same-day delivery feasible through third parties and focusing on key cities, where deliveries can more easily be pooled. Asos partnered with CitySprint’s On the Dot to offer Asos Instant, with orders placed before 12pm Monday to Friday being delivered between 6pm and 10pm on the same day.

And while half of retailers do not offer free returns to protect margins – a key barrier to purchase – many instead offer postal returns at a small fee, or try to incentivise customers to visit shops by offering free store returns.

Visibility through tracking

Arguably what customers want most is the reassurance of a time slot, but only 15% of retailers offer this service.

The 84% of retailers that provide visibility through parcel tracking, though, help customers manage expectations of the last mile.

The integration of tracking on a retailer’s website – as opposed to the courier’s – used by the likes of Amazon and eBay, keeps customers coming back to the site post-purchase, providing a branded experience and upsell opportunity.

Integrating communication online

Live chat also keeps customers on a retailer’s website, and is provided by 46% of retailers on a desktop. It’s particularly important for emerging brands such as Eve Sleep, which has a chatbot that allows customers to converse while browsing on mobile or desktop, providing reassurance on a complex and big-ticket product.

AI-based chatbots handle basic questions autonomously for 11% of retailers, freeing customer service teams to focus on more technical queries.

The latter is important for retailers like Lovehoney and Holland & Barrett, which set themselves apart from the likes of Amazon by training their customer care teams with in-depth product knowledge to handle sensitive questions.

Meanwhile, discounter Lidl has introduced a wine expert chatbot through Facebook Messenger. The retailer is renowned for its wine and the chatbot allows customers in-store to get recommendations without necessitating staff training.

While online chat options don’t necessarily require heavy backend investment, integrating communication tools at the right stage of the shopper journey is key to maximise return on investment.

CASE STUDY

How Asos always delivers

Asos has overcome the limitations of operating as an online-only retailer by offering customers a whole host of delivery options – including weekend, named-day and evening. By building free returns into its business model, it demarcates its returns budget under marketing spend.

asos-package-delivery

Its free delivery threshold is just £25 – a canny decision as it mainly sells to cash-conscious younger customers – and it offers a year-long next-day delivery subscription service for just £9.95 per year, making sure that those that buy into it are more inclined to shop with Asos than other businesses.

A recent partnership with CitySprint has allowed the retailer to launch Asos Instant same-day delivery in London, Manchester and Birmingham, but it is yet to offer one-hour delivery. Its budget-friendly offer makes this more difficult to achieve profitably than it does for high-end retailers such as YNAP or Farfetch.

Asos has also strived to make its returns as convenient as possible via partnerships with a whole range of third party firms.

It has also partnered with a whole range of logistics companies to make its returns as convenient as possible. As well as returning via the Post Office, Asos customers can use the standard Doddle, Hermes and CollectPlus points that many retailers offer. They also have the option of returning via Asda stores, Pass My Parcel locations and InPost 24/7 Lockers.

Asos management is extremely aware of its customer’s mindset – most 20-somethings have a tight cash flow – so has cut the amount of time it takes to refund customers, and partnered with Klarna last year to launch a ‘try before you buy’ service, whereby shoppers only pay for items they keep.

Asos’ customer service – despite being online only – also boosts the delivery and returns experience. Both its social media and email response times were among the fastest of the 180 retailers assessed.