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Mind the gap

Thursday, February 25th, 2016

Temando’s new UK Commerce Survey has revealed a widening gap between retailers’ delivery models and their customers’ demand for faster, more flexible delivery options.

Temando’s 2016 State of Shipping In Commerce surveyed over 200 UK micro, small, mid-sized and enterprise retailers and 1,000 consumers and found some significant “disconnects” between what customers want, and what retailers are ready to offer.

The gap was particularly yawning on the subject of time-slot deliveries. According to Temando’s study, 86% of UK consumers have used or would like to use time-slot delivery options at check-out, but only 38% of retailers provide this option at present.

Retailers also have some catching-up to do on same day deliveries: 78% of UK customers would like a same day delivery option and 47% of customers would be willing to pay a premium for it, but only 53% of UK retailers can currently provide this service.

“Same day delivery options are still more popular than hyper local delivery in the UK,” commented Temando, “but the findings suggests retailers would be well advised to start including it as a premium option as 59% of customers would consider using it.”

There was also a disparity on in-store collection options: 88% of UK customers would like to collect their online orders from stores and a quarter are actually willing to pay a premium for the service. However, just 55% of UK retailers currently offer this option.

One of the key messages of the Temando report – and this is a point which has emerged repeatedly from every e-commerce study – is that customers want to know about delivery and shipment costs upfront. Approximately two in every five customers abandon their carts because the cost of shipping was communicated ‘too late’ in the purchasing process.

Continuing the “cart shock” theme, 60% of respondents highlighted delivery costs as the number one reason for abandoning their online purchases. Despite the best intentions of retailers, however, Temando’s research showed that “many are hampered in their desire to offer more flexible and affordable delivery options because of high courier rates, with almost a third citing this as a major problem”.

Temando found that retailers know that fulfilment and shipping is a key part of their customers’ overall shopping experience and 85% believe that by offering multiple shipping options, they are better served to meet customer expectations. However, the study also showed that many UK retailers are restricted in the number of omni-channel and high-speed shipping services they can offer because of a lack of back-office and supply chain automation, with more than a quarter of retailers still manually booking their couriers, as well as a reliance on centralised distribution models.

The findings show that 40% of Enterprise, 46% of Small and 48% of Mid-level UK retailers are still shipping their goods from a single warehouse, which makes it much harder to coordinate the faster and more cost-effective shipment and delivery options that customers are coming to expect.

Commenting on the report, Carl Hartmann, CEO and co-founder of Temando, said: “Shipping and fulfilment are very complex and important processes that are traditionally viewed as a cost centre for many businesses.

“But with smart investments in software and hardware technology, especially the automation of multiple shipping options, many large and small retailers can transform shipping and fulfilment into a bonafide sales tool, a competitive advantage, and a key way to build customer loyalty.”

Source: Temando

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