The rapid delivery revolution is gathering pace and where grocers have led non-food retailers are starting to follow, writes Nick Hughes.

  • Both Screwfix and Boots launched rapid-delivery services in August, responding to the increasing demand for immediate fulfilment of non-food items
  • Same-day delivery services provider Gophr is seeing a “consistent increase in demand” for its services across a wide range of retailers
  • Experts believe China’s “reliable, sophisticated, last-mile delivery systems” are 10 years ahead of the UK

In August, Screwfix announced the launch of a rapid delivery service called Screwfix Sprint that will deliver orders direct to site within 60 minutes.

The same month, Boots launched a trial partnership with Deliveroo to offer delivery in as little as 20 minutes on a range of more than 400 health and beauty products.

Dixons Carphone has also confirmed it is set to trial a partnership with Uber to offer “better than same day” delivery using its network of stores as distribution hubs.

The economics of rapid delivery remain challenging, but with consumers increasingly demanding convenience and immediacy as standard non-food retailers may soon be left with little choice but to join those already offering same-day, or even same-hour, delivery options.

Primed by the pandemic

As with so many other current trends, one reason for the recent change of gear in last-mile delivery is the coronavirus pandemic.

“The explosion in fast food and ultra-fast grocery paired with the pandemic has led to a huge amount of expectation from consumers,” explains Gophr chief commercial officer Patrick Eve.

The same-day delivery services provider is seeing a “consistent increase in demand” for its services across a wide range of retailers, according to Eve.

In the fashion space, Gophr partners with the likes of Net-a-Porter, Paul Smith and Grenson. In pharmaceuticals, it delivers for Boots, Numark and online specialist Phlo, and it also works with a number of DIY chains including Screwfix and Toolstation.

Although the trend for rapid delivery started with non-discretionary items like food and drink, it is spreading to other more discretionary categories, and quickly.

Screwfix Stoke

“Our sector naturally suits propositions focused on delivering hyper-convenience and giving customers choice in how and when they shop with us”
John Mewett, Screwfix

“The market in general is raising the bar, so now delivery in one hour is not so exceptional,” explains Accenture global beauty lead Audrey Depraeter-Montacel. As a result, she says other businesses are being “pushed to align to this new reference of service”.

WPP Store chief executive and China retail expert David Roth agrees the “genie is out of the bottle” where rapid delivery is concerned. “If you can get something in 30 minutes why wait for two days?”

Screwfix has decided that customers shouldn’t have to wait. Following a successful trial in Bristol in partnership with Gophr, the Kingfisher-owned brand plans to have rolled out its new Sprint service – which commands a £5 delivery charge – to more than 30 cities across the UK by November, at which point the service will be available across 34% of UK postcodes.

Screwfix chief executive John Mewett says the DIY category is especially well suited to rapid delivery. 

“For tradespeople, time is money and it’s really helpful for them if they can avoid leaving site halfway through a job to collect a part, tool or another essential item that they may have forgotten or run out of.

“So our business and our sector naturally suit propositions focused on delivering hyper-convenience and giving customers choice in how and when they shop with us.”  

Sitting pretty

Other product categories where the need for immediacy is acute also appear well placed to benefit from the trend towards rapid delivery.

Boots director of ecommerce Paula Bobbett reveals the retailer is already seeing high demand for minor ailment treatments such as cough and cold remedies, and stomach and bowel products.

“It’s those things that people need really quickly and when they’re feeling unwell can’t necessarily get out to buy,” she says.

Baby products such as wipes and nappies that people “run out of at the last minute” are also performing well, according to Bobbett.

Deliveroo rider Sophie outside Boots Piccadilly Circus

In August, Boots launched a trial partnership with Deliveroo to offer delivery from a range of 400 products in as little as 20 minutes

What’s arguably more significant when considering how pervasive rapid delivery will ultimately become is demand for beauty products, which are generally more discretionary purchases.

Bobbett says Boots is seeing demand “tick up” for items from its No7 own-brand range and skincare products from CeraVe since it launched its Deliveroo trial.

The US is one of the markets leading the way. In May, the Estée Lauder Companies struck a partnership with Uber – which is already providing same-day delivery for retailers like H&M, The Body Shop and Walmart in certain US cities – for rapid delivery of ELC-owned brands such as Origins. Sephora, meanwhile, joined forces with Instacart in the summer of 2020 to provide same-day delivery of its products.

Despite recent advances, the US isn’t considered the standard-bearer for the adoption of rapid delivery. To really get a sense of the future direction of travel “you absolutely must start in China”, says Roth, who believes the country’s rapid delivery infrastructure and adoption is 10 years ahead of that in the UK. 

“Delivery is an integral part of the integration between online and offline, and satisfying the instant gratification of Chinese consumers,” he explains.

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Roth believes China’s “reliable, sophisticated, last-mile delivery systems” are 10 years ahead of the UK

Ecommerce giants such as Alibaba and JD.com have invested heavily in their own logistical infrastructure, not just in warehousing but in “reliable, sophisticated, last-mile delivery systems” that satisfy consumer demand for super-fast delivery across almost every product category.

Amazon is doing something similar in Western economies as it buys up physical infrastructure, including stores, distribution centres and mini-fulfilment centres that allow it to get as close as possible to the customer thereby reducing delivery times.

The challenge this poses rival retailers both in the UK and around the world is how to compete with these industry pacesetters in a way that is cost-effective.

“Delivery is now as much a weapon in [a retailer’s] armoury as other things were in the past,” says Roth. “Everyone is going to have to work out how that weapon is deployed and the economics of it.”

New partners and newer customers

To date, most UK retailers offering rapid delivery have gone down the route of working with a dedicated last-mile partner. Eve says the biggest benefit for most retailers is cost, noting that it’s extremely expensive to acquire the assets needed to develop in-house capabilities, “and then you have to consider the operational running costs”.

Bobbett says the benefit to Boots of working with a partner like Deliveroo is that it already has the necessary scale and infrastructure in place “so you’re already tapping into their capabilities”.

And there’s another reason why working with a third party can be attractive. Depending on the basket price, an order picked and delivered within the hour may not make the retailer any money, despite the premium charge for the service.

But as Depraeter-Montacel explains: “The profitability is not coming from the service it’s coming from the fact that you are reaching out to a potentially new consumer.”

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“The profitability is not coming from the service, it’s coming from the fact you are reaching out to a potentially new consumer”
Audrey Depraeter-Montacel, Accenture

Boots has analysed the crossover between people who shop from Boots and those who shop via Deliveroo. “We know that there are some crossovers, but equally we also know there are new customers on the Deliveroo platform who don’t normally shop with Boots that we are tapping into,” says Bobbett.

The opportunity to attract new customers and drive incremental sales may ultimately prove as important, if not more important, a motive for non-food retailers developing rapid delivery capabilities as the need to serve existing customers more efficiently intensifies.

For Screwfix, the size of the prize is significant. “Screwfix Sprint and our store network go hand in hand,” says Mewett. “As we currently have 724 stores in the UK, with 98% of the population within 30 minutes of a store, we plan to use this footprint to roll out Screwfix Sprint even further over the next year.”

Bobbett also makes positive noises about the potential scale of rapid delivery for Boots. “We have a huge network of stores across the country of more than 2,300 and 90% of customers are within 10 minutes of those stores, so there’s a real opportunity to be able to operate it at scale should the trends we see now continue.”

Bobbett also has an eye on growing the range of products Boots offers for rapid delivery and has identified “an opportunity over Christmas for last-minute gifting that we’re really excited about”.

Rivals revving up

Even categories such as fashion, where speed of delivery has historically not been a key differentiator, may find themselves swept along in the rapid delivery revolution. Zalando’s new fulfilment centre in Bleiswijk near Rotterdam will have the highest level of automation within the Zalando logistics network and the potential to offer new services such as same-day delivery.

The development of drone technology and other forms of autonomous delivery, meanwhile, has the potential to “completely change the economics” of rapid delivery, according to Roth, opening it up to a broader range of retailers.

Gophr’s Eve believes that although “we’re still quite a few years away from consumers expecting to be able to get a fridge or a shower unit delivered within the hour”, any category that has an immediate need like pharmaceutical products “is a clear point of growth”.

Delivery tracking app index

“Any category that is made to feel like a need, such as apparel and beauty, is going to be a big play for same-day delivery”
Patrick Eve, Gophr

He adds that “any category that is made to feel like a need, such as apparel and beauty, is also going to be a big play for same-day delivery”.

If retailers do want to resist the march of rapid delivery they will need to think hard about their brand positioning. Depraeter-Montacel gives the example of Hermès, the French luxury goods manufacturer: “If you want a Hermès bag there is a waiting list, but there is a story behind the brand that says we have a small capacity, we are artisan, so if you want this product you have to wait.”

For the majority of retailers, however, the new consumer culture of immediacy will mean an increasingly large cohort of customers may no longer be prepared to wait. “It’s safe to say that if your competitors are offering [rapid delivery] and you aren’t, then they have the edge,” says Eve.

In order to deliver growth to an increasingly impatient consumer, rapid fulfilment could be the next big gamechanger for non-food retail – and those that aren’t exploring it now could be left spluttering on the fumes of their rivals.

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