If the customer is ‘king’, we’re now experiencing consumers wield their power, as we witness an irreversible shift from the few to the many.
If the customer is ‘king’ we’re now experiencing consumers wield their power, as we witness an irreversible shift from the few to the many – from large, dominant retailers who occupied space in high footfall locations to consumers who expect and demand a retail experience on their terms.
This shift is seeing big technology, such as supply chain and fulfilment systems, struggle to keep pace with ever more inventive ‘small’ technologies used by consumers to extract a richer and more fulfilling shopping experience - customers using their mobile phones for ‘showrooming’, for example, when they browse (and sometimes scan) items in store, before heading home to buy online.
This is fundamentally shifting how retailers engage with consumers and has encouraged forward-looking players to ask ‘Where do we deliver value to our customers?’. For many retailers, the answer is, ‘From the minute that consumers interact with us through to and beyond their next purchase’.
But actions speak louder than words. I am astounded that large numbers of retailers currently don’t offer their online shoppers more choice on delivery services, such as later cut-offs for next business day, evening, weekend, same-day and even Bank Holiday deliveries.
But choice isn’t only an opportunity. Its omission places sales at risk. Research confirms that a lack delivery choice is the number one driver of basket abandonment. So it’s no coincidence that the retailers that offer this options such as Amazon, Asos, Aurora Fashions, Net-a-Porter and House of Fraser are reaping the rewards through an improved shopper experience and customer loyalty.
So if we can offer choice today why don’t more retailers make it a priority? I’ve been told there are a number of hurdles, including price, lack of customer demand, IT integration and the inability to support dynamic ‘pick and pack’ for same-day distribution.
Some of these represent significant challenges, but they are not insurmountable. Let’s take price. Retailers offering same day options have experienced higher shopping basket values and lower basket abandonment when this is selected. Furthermore, if shoppers don’t want to pay a premium for this type of delivery then they don’t have to. It’s purely their decision.
What about demand? Clearly those that offer choice are winning. But just because your customers aren’t petitioning you, it doesn’t mean they wouldn’t welcome the service. It might be that they are voting with their feet and migrating to sites do provide a range of delivery options.
IT integration is a conundrum. It can be expensive and divert resources but this burden can sometimes be shared by the supplier. There are also shortcuts with distribution platforms such as MetaPack which can connect retailers with a wide range of suppliers including dynamic delivery networks.
Infrastructure can be a barrier but business models need to evolve if retailers are to survive and thrive in this new landscape. This means investing in strategies that can fulfil products from stores of warehouses, dynamically and on demand.
Implementing a new customer solution will require careful thought, but we must do it if we’re to move the only physical touch point in the online customer journey – the delivery of their purchases – from a risk into acompetitive advantage.
Can we provide a delivery service fit for a king? We can and we have to.
- Patrick Gallagher, chief executive, CitySprint UK