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The Visible Value Blog

Tracking the History of Delivery

Posted by Mark Thomson

July 21, 2015 at 5:37 AM


I’m old enough to remember the days when milk, bread, eggs and juice were brought to the front door on a daily basis. Now only businesses get that kind of service.

However, grocery deliveries from large supermarkets are increasingly popular, surging up 35% in 2014. It seems, many of us would rather avoid the hassle of marching around the supermarket. It also appears that everywhere I go I see a sign promoting ‘Click & Collect’, so I wonder if we are in the midst of a step change in retail delivery.

The bottom line is that as customers, we want a choice of different options, but that creates a serious challenge for retailers. Businesses have to cope with picking and packing goods for home deliveries as well as for collection in store and they have to determine if this is done from the store or from the warehouse. In addition, they have to manage online purchases returned to stores that then need to go back to the warehouse. The problem with this complexity is that retailers’ legacy processes and systems are simply not designed for it – and it’s wiping out the potential for retailers to profit from fulfilment and delivery.

But there’s no doubt, offering the right delivery options is key to success right now, as 50% of customers report that they have abandoned purchases as a result of unsatisfactory delivery options. The customer is king and what the customer wants is convenience. A wider choice of delivery options is no longer a way to add value, it’s a necessity in order to remain competitive.

One of the current trends helping retailers to battle this is the option for click and collect, allowing them to charge properly for delivery, but offer free collection as an alternative. This also requires significant effort when it comes to logistics. In an ideal world, these orders would be picked and fulfilled from the stock available in store, however; unfortunately many retailers often can’t rely on the accuracy of inventory management in stores, so click and collect orders are regularly fulfilled from a central location, which is much less cost effective than fulfilment using stock that’s already in store.

Another problem with fulfilling orders with store stock is making sure that items are appropriately packaged and labelled for collection, which is slightly different from items that customers are going to pick up off the shelves. This begins to call for a section of the back of store where stock can be held and managed for this purpose.

To deliver the kind of personal, optimised experience that customers are now looking for, stores should also be looking at how they ask customers to collect items. For example, could staff be empowered to welcome customers as they arrive to collect their item? And then offer to bring it to them where they are? this way the customer can continue browsing other items. This is a higher level of customer service than asking shoppers to walk right through to
the store and find the click and collect point.

A more recent influence in this area is the introduction of delivery lockers, which is especially helpful where retailers don’t have a store presence. A company leading the way here is Doddle. This innovative company offers vendor agnostic click and collect points, either from lockers or shop fronts. Doddle has agreements with 300-railway stations and has plans to expand into 100 UK universities by the end of the year. Retailers already signed up include Amazon, ASOS, TM Lewin and New Look. Look out for lockers and Doddle stores in your local area.

Click and collect, whether it is from a locker or from a store it’s all about convenience, so if retailers can offer both options then the customer can work out which would be best for them.

Andrew Starkey, head of e-logistics at IMRG, remarked: "While overall satisfaction with online fulfilment has remained consistent over the past few years, the delivery experience has become a key differentiator for customers – with 70% confirming that a good delivery experience will help keep them loyal to a particular retailer.

It is therefore important for industry to keep innovating to keep pace with evolving customer demands – click & collect is a good example of how customers will adopt new solutions if they greatly aid convenience, with 60% now saying they have made use of the option." 1

This landscape presents a challenge to all retailers, but it’s one that has a huge potential for reward – in terms of efficiency, increased sales and customer loyalty.

Learn more about retail delivery here

1 http://www.imrg.org/index.php?catalog=2000

Topics: Retail, One Store, Online Purchase, Delivery, Inventory Management