Few would have predicted a decade ago that fulfilment would become the difference between making a sale or not but few would contest now that it plays a huge role.
The final stage of the fulfilment journey has become perhaps the most important element of a strong online or multichannel offer – free and efficient delivery and returns, or convenient click-and-collect designed around a shopper’s day, have become cornerstones of growth.
Delivery’s importance has been thrown into particularly sharp relief over the past year. Tube stations have become collection points; retailers including House of Fraser launched evening delivery; eBay orders can be picked up at Argos stores and same day delivery is now a relatively common service.
As former Tesco chief executive Sir Terry Leahy said at Metapack’s Delivery Conference on Tuesday: “It’s extraordinary how much has changed in the industry in two years.”
Asos founder Nick Robertson said seamless delivery is getting more important in customers’ eyes. “Increasingly shoppers migrate towards sites with the best, seamless, most reliable customer care. Customers do reward you with loyalty if service is reliable,” he said.
The delivery industry has come a long way over the past couple of years, but more innovation is still needed.
New services and ideas are coming through thick and fast – courier firm Hermes revealed at the conference it is launching Sunday delivery – but retailers and suppliers agree there is more work to be done. Leahy said: “The customer delivery experience isn’t optimal yet.” He added the customer used to do all the work because they went into stores and purchased products, whereas now retailers are focusing on how they can deliver products to customers’ doors. “Now we try to navigate through to them. It’s difficult, and we’re catching up now with the implications of that.”
Much of the work required centres around international expansion, where a successful logistics operation can be difficult to achieve. Leahy said: “Going international is becoming much easier. You’ve got customers ready to do business with you. Tesco was 60 years old before it went overseas – some ecommerce businesses go international virtually on day one. What still needs to catch up is the physical fulfilment of cross border trade.”
The UK has emerged as a world leader in ecommerce, providing opportunities for both retailers and suppliers to export their expertise and reach new customers. Leahy said: “The UK’s reputation of being a leader is growing around the world. That provides opportunities for ecommerce.”
But while there are plenty of opportunities for UK etailers and ecommerce suppliers, the market is getting increasingly crowded.
Leahy said: “Being a pure ecommerce player is less unique than it was. There is more competition. Increasingly consumers won’t think about online and offline – they will just think about retail.
“It will be a case of the winners are good retailers and the losers are those who didn’t develop traditional retail skills. It’s less about technology, and more about who understands the customer.”
For Robertson, however, delivery and online shopping will be even more of a central part of retailing.
“You’ve got to put yourself in mind of [someone who is] a 12 year old today. Out of stock will be an alien concept. In my head, they won’t accept that. Delivery will be so amazing – drones and things – they’ll just click and buy online.”
The easy days of ecommerce are over, says former Wiggle boss
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Analysis: Sir Terry Leahy and Nick Robertson on why delivery has become so crucial