Delivery speed is no longer a competitive battleground.
Our recent survey of leading European retailers highlighted the fact that delivery speeds have now reached a level that both retailers and carriers alike will struggle to beat. With average standard delivery speeds of 3.4 days, and express speeds of 1.5 days; customer expectations are firmly set. In reality for the majority of customers these delivery times will be beaten – for example the vast majority of parcels will be delivered within 2-3 days, despite being subject to a 3-4 days delivery promise.
Focus on flexibility
No two customers are alike, their motivations and desires behind each purchase, just as their selection of delivery options, change with each and every order. The level of flexibility that customers are becoming accustomed to may surprise many retailers. 40% of retailers from our survey offered customers 4 or more delivery options to choose from. Among UK customers the expectation is even higher, on average UK retailers offered 4.8 different delivery options.
So, how many delivery options does a retailer need to offer?
At a minimum we would recommend three different delivery types: an express or next day option for when customers want their shopping quickly, an alternative delivery destination option to cater to those customers who aren’t at home 9-5 (such as Click & Collect, Collection Lockers, or Convenience Stores), and a standard option that caters to those looking to minimise shipping costs. Alternative delivery options are becoming increasingly popular with customers to fit around their busy lifestyles. For multichannel retailers Click & Collect really is a no-brainer. Therefore it is no surprise that 100% of multichannel retailers surveyed in the UK, and 94% of French retailers offer Click & Collect delivery options. Benefitting from additional store footfall, and incremental in-store purchase opportunities, retailers have been keen to promote such options above traditional home delivery. In the UK such is the dominance of Click & Collect that we are seeing a growing number of tie ups with non-competing retailers such as ASOS and Boots – providing online only and those retailers without national store coverage a way to connect online and offline.
Reliability = Loyalty
Reliability is a prerequisite for customer loyalty. In an age where millennials are increasingly loyal to brands and retailers they build a relationship with, it is important to reinforce this relationship by delivering on your promises. Fail and they will go elsewhere. As mentioned at the start of this article, aiming to consistently better delivery expectations will be either costly, unreliable, or a combination of the two. It is more important to ensure that you hit your expectations each and every time. Of course this means ensuring your parcels are sorted and available in your warehouse for carrier collection before cut-off times, but reliability in the eyes of customers is so much more.
Multiple relationships to meet customer needs
A number of retailers surveyed operate a single carrier relationship from everything from delivery to returns. While this may seem beneficial from the economies of scale that can be achieved, the truth is that multiple relationships (both with carriers and alternative delivery partners) are advantageous in the long run. Working with multiple partners enables additional flexible delivery options to be on-boarded, service levels maintained during peak times, and optimum delivery service levels selected based on delivery destination. For international retailers the importance is greater, working with local carriers not only reduces costs but provides customers in each country with a level of carrier service they are already accustomed to.
Don’t forget the basics
Often overlooked is the importance of delivery tracking. The costs of failed 1st time delivery for the retailer, and the frustration for the customer, is huge. Improving first time delivery success through despatch notifications, delivery status tracking, SMS options for preferred delivery time/date, and even now dedicated carrier apps (that put flexibility in the hands of the customer) must be maximised. Through a combination of retailer enabled tracking, and tracking options offered through your carrier of choice, customers will have greater confidence in when their items will arrive. Such simple tools can often be the make or break decision between yourself and a competitor when it comes to customer choice. So, eek out those competitive advantages.