It’s taken a while, but retailers are finally making big strides in improving delivery services. Charlotte Hardie considers the change in consumer demands, and outlines some of the recent innovations.

Delivery van

There’s nothing like a poor delivery service to rile shoppers. Get it wrong and retailers can be assured that the intended recipient will be hopping mad.

The ability to offer innovative, efficient delivery options that meet shoppers’ needs are critical in this multichannel era. It’s a way to improve the customer experience, drive sales and offer competitive difference.

And yet it’s also one of the biggest challenges in ecommerce. Although the proportion of failures has reduced over the years, the cost of delivery failure is growing in absolute terms year on year because of the continuing rise in online sales. Last year, the cost to the retail sector of such failures was about £1bn.

The range of delivery options – or lack of – is also a major inhibitor of online conversion. In a Royal Mail survey of consumers who dropped out at the checkout, two thirds cited the retailer’s delivery options as a reason, be that because of the cost or a lack of convenience.

Retailers are working hard to improve services. Shop Direct Group chief operating officer Keith Basnett says the retailer has moved to a standard six-day delivery, so that Saturday is a regular delivery day. Customers also have an extra day to have a return collected. It has also introduced an 8pm cut-off for next-day delivery, and a 4pm cut-off on a Sunday for a Monday delivery. “All of these services have been extremely well received by customers,” says Basnett.

The need for speed

But generally, most retailers are playing catch up. Tom Allason, chief executive and founder of Shutl, points out: “Ecommerce is pretty much unrecognisable to when it first started out but, until relatively recently, delivery hasn’t changed a whole lot at all.”

So what headway is being made by retailers and their supply chain partners? There are now many examples of retail innovation. A big development has been retailers’ ability to get ordered product to consumers more quickly. In partnership with Shutl, retailers such as Argos, Aurora and Laithwaites Wine can fulfil online orders within 90 minutes of purchase by sending stock from stores close to the customer. Average delivery time is 70 minutes. The quickest is under 15 minutes.

Allason believes it can boost sales. “My view is we’re turning browsers into buyers,” he says. But ultimately, he adds, meeting customers’ demands does not necessarily boil down to immediacy, but convenience.

Retailers need to ensure they provide a service that suits their customers’ varied lifestyles, which might change from one retailer to another. A survey by mailing and distribution consultancy and solutions provider P2P Mailing, which looks into attitudes towards standard and premium delivery options, backs this up.

Strides are also being made to improve convenience for two-man deliveries for big-ticket items. This can be the type of delivery that frustrates customers the most. Because of the low density of sales compared with other categories, delivery vans are often covering vast geographical areas, so retailers aren’t always able to be any more specific than stipulating an entire day for delivery. But as Paul Tyson, director of Nightfreight’s deliver2home service, says: “The customer doesn’t care about the difference between buying a jumper or a dining room suite. They just want convenience.”

Nightfreight, which works with retailers such as John Lewis, B&Q and Carpetright, has been able to define a three-hour time slot for its retail clients’ customers by investing in routing technology, which better predicts delivery journey times. Customers are advised of their window the evening before by text or email. Feedback suggests it has greatly improved the delivery experience, says Tyson. The next challenge, he observes, is to narrow it down to two-hour time slots.

Making it easy

The number of retailers launching a click-and-collect offer is also indicative of the strides being made in improving customer convenience. Meanwhile, Amazon’s launch of its own collection lockers last September is particularly notable.

Similarly, ByBox launched its collection locker service in 2000. Last year, it made more than 25,000 consumer deliveries – an 85% increase in the number of people who tried the service in 2010. Collect+ is also popular. Shoppers can arrange to collect their online deliveries from its partnered local stores such as corner shops. They are also now used for returns by more than 100 retail brands, further enhancing the overall online experience.

Basnett says Shop Direct has worked to encourage more shoppers to use the Collect+ service across all of its brands  – especially for Very and Isme – resulting in a five-fold increase in take-up overall. Collect+ says one in five Very.co.uk packages are now being delivered to one of its partner stores.

The fact that using the service means delivery is free, has “measurably increased overall customer satisfaction”, says Basnett. “Additionally, it has opened up a sector of customers who would not trade with a postage and packing charge.”

Make or break

Crucially, improving online delivery and returns is not just about enhancing convenience. The customer service aspect is becoming increasingly important, too. Allason says: “Delivery is the last interaction the customer has with the retailer. That really reflects whether consumers will shop with them again or not.”

Yodel chief executive Jonathan Smith points out that essentially, the courier is the “new shop assistant, and for that reason it’s essential to get the customer’s experience right”. The delivery giant is rolling out software that displays the retailer’s logo on handheld terminals. It sounds simple, but the theory is that it reinforces the brand in the consumer’s mind when they sign for the product. It also enables Yodel to include targeted promotional information, such as discount codes and dates of the retailer’s future Sales, “which can be verbally reiterated by the courier”. Smith says this human interaction enables retailers to garner feedback about the brand.

At present, online sales are going one way, and the same applies to customers’ expectations of the delivery service. Basnett points out: “As our standard service improves, this drives customer expectation upwards, and the cycle of improving services continues every day.” Delivery improvement is a never-ending task, but it is critical to remaining competitive. 

Consumer attitudes towards standard and premium delivery options

  • UK consumers are far less likely to choose next-day delivery than online retailers imagine
  • When ordering items for themselves online, the vast majority of the UK public would choose standard delivery − consistently over 86%. The exception is electronic goods, where standard delivery drops to 65%
  • Buyers of electronic goods are also more likely to use track and trace facilities (15% compared with between 1% and 3% for other products), confirming that type of product influences choice of shipping
  • Value of item ordered confirms its significance and £50 appears to be the break-off point after which a significant proportion of consumers choose special delivery
  • Selection of standard delivery is consistently higher among the 56+ age group and lowest in the 18-22 age group

Source: P2P Mailing

Retailers’ advances online delivery and collection

  • Amazon revealed the launch of its order collection lockers in London shopping centres last September
  • Numerous retailers have launched click-and-collect services in the last year, including Ted Baker and New Look. House of Fraser has opened designated click-and-collect stores
  • Aurora, whose brands include Coast, Oasis and Warehouse, launched a 90-minute delivery service within London in November 2010 by fulfilling orders from local stores instead of a warehouse. By October 2011, it had plans to launch the service in six other cities – Aberdeen, Belfast, Birmingham, Bristol, Cardiff and Liverpool. Chief executive Mike Shearwood said it intends to extend the service to 90% of the UK. Other advances include customers being able to choosea one-hour delivery window on any day