Why retailers need to get their delivery right

At an almost existential level, ecommerce is little more than a shuffling of pixels. You see something on a website, you click, you enter payment and delivery information and you have transacted. No money was involved. No physical goods were present. And the only human being that had to participate in it all was you – and once the smart fridge of the future takes off even that will become a moot point.

Online shoppers are buying a promise. You are promising the item they have bought will be delivered in pristine condition and that it will arrive when they expect it.

It shouldn’t, therefore, come as much of a surprise to know the extent to which missed expectations, when it comes to the condition of the purchased goods and their delivery, is the new yardstick by which etailers are being judged. If you get it wrong you’d better have a good reason for getting it wrong, and you’d better be quick to solve it.

According to a research by IMRG, UK online retail sales were up 12% year-on-year (YoY) in July 2015 and sales made via a mobile device, either a smartphone or tablet, saw a solid 42% annual growth. Yet the cost of failed deliveries are already starting to nudge tentatively at the £1bn per year mark in the UK. 

As a result, more and more retailers are putting delivery at the heart of their ecommerce strategy. Getting it right means traders win more sales, while those who don’t, miss out. Below, we single out some of the latest innovations in retail delivery – and collection – and consider why they work.

It may seem an obvious point, but home delivery works best when customers are at home. That is why House of Fraser went to great lengths to develop a simple yet ambitious delivery service last autumn. Shoppers ordering online by 8pm can now specify delivery by 9am the next morning. 

When announcing the new service, at Internet Retailing Conference 2014, Andy Harding, Chief Customer Officer, Multichannel, at House of Fraser, said: “The voice of the customer is telling us that home delivery is not convenient. Most people work, and taking time off work, even when you know which 15-minute window it will arrive in, is still a pain.” He added: “This is a key battleground, we believe, and [in 2015] we’ll be launching even more options.”

Where could be more convenient to take delivery than on the way to and from work? Collection points are now firmly on the transport network map in the capital and beyond, with grocers including Asda, Waitrose, Tesco, Ocado and Sainsbury’s now giving shoppers the opportunity to pick up their internet orders in Transport for London stations. John Lewis, another elite logistics performer in the IRUK Top500, last autumn opened its first Click and Commute store at St Pancras station, where workers on their way home to the east of England can pick up their online orders. 

Argos recently opened its smallest store to date in Cannon Street tube station. It promises same-day, next day and fast collection for online orders from the 170 sq ft Argos Collect branch. Using a hub and bespoke logistics model, it says it can get any of 20,000 products to the shop in super quick time. 

Even the retailer with the longest opening hours can’t match the round-the-clock availability of a lockerbank. This alternative delivery method is now expanding quickly across the UK and Europe. A recent research by Apex Insight revealed that this trend has not only increased but evolved in ease of use. Lockers typically used in a b2b environment that had key-operated boxes have now PIN-based, datalink-enabled PUDO points making it more friendly and practical for customers.  

Paritcularly in the UK, market leader InPost opened its 1,000th lockerbank in 2014, adding to a network that includes Victoria Coach Station and a number of Transport for London stations. Retailers are now moving to open their own lockerbanks as well as using those operated by third parties. Waitrose, for example, has temperature-controlled lockers at London stations, while Amazon has opened its own lockerbanks at sites including Birmingham International Airport. 

As shoppers grow accustomed to the idea of fast and convenient delivery, their expectations stretch still further. Same-day delivery is now a reality for a number of retailers.

Traders such as Argos can fulfil orders from their stores via the Shutl service to nearby homes in as little as 15 minutes, or use its hub and spoke logistics to get a product into the right store for same day collection. They have also launched this August, a new high-speed delivery and collection service across the south of England, called Fast Track, which can get a parcel on the same night, same day or next morning to the customer.

Retailers are raising the bar with logistics, operations and supply chain strategies as well as successfully and creatively exploiting business potential to better serve the customer. The best practices, key trends and discussions of the industry will be seen this October at the inaugural eDelivery Conference.