Retailers set to overhaul delivery options to maintain home shopping growth

RETAILERS in the UK are planning a major overhaul of their delivery strategies to ensure the home shopping boom continues, according to a survey released today by Consignia.
The survey of 100 companies, which includes some of the UK's largest home
shopping retailers, revealed that 70% regard reliable delivery as the most important influence on the future growth of the market and delivery at a time and place convenient to the consumer was ranked as the second most important factor by 58% of respondents.
Unsurprisingly, one of the most popular options for driving future growth in home shopping was time-window deliveries. This was seen as the most likely 'last mile' delivery service to fuel future growth by 67 per cent of those surveyed. For retailers operating on-line, the figure was 71 per cent.
The survey revealed the strong potential for greater use of time-window and Local Collect services:
· 50% of retailers surveyed are or hope to be offering time-window delivery services in the next 12 months, with a further 12% considering offering this service in the longer term
· 50% of retailers are or plan to add delivery to a local Post Office branch for collection – the Local Collect service recently introduced nationwide by Consignia – in the next 12 months, with a further 12% considering including this service in its portfolio of delivery options in the longer term
· Retailers also see a potential in the use of drop box solutions with up to 33% either already or considering offering delivery to such systems in the coming 12 months
David Taylor, Consignia's Managing Director for home shopping, said: "Retailers have realised that reliable and convenient delivery is the number one issue which could act as a barrier to continued home shopping growth and they are committed to addressing this by introducing new and innovative delivery methods."
Through its brands of Royal Mail, Parcelforce Worldwide and the Post Office, Consignia has developed new services to ensure retailers can offer their consumers reliable and convenient delivery.
The Parcelforce Worldwide Select service was launched last year offering time window deliveries to 9pm and Saturday mornings. And in July, the Local Collect service was unveiled, enabling consumers to choose to have their goods delivered, by Royal Mail or Parcelforce Worldwide, to their local Post Office branch. This can be either as a first point of delivery or an alternative should the consumer not be at home when delivery is attempted.
And Consignia has just begun trials of drop box solutions in a variety of locations across the country to explore their potential by testing consumer demand and the ways in which the different systems work.
Mr Taylor said: "The Parcelforce Worldwide Select and Local Collect services provide retailers with the ability to meet the delivery demands of home shoppers and help ensure growth in home shopping continues at expected rates which are far in excess of retail sales growth. Greater convenience and reliability around delivery will encourage those who already shop from home to do so more and also attract new consumers to this way of buying their goods."
Other key findings are that next day, two day and seven day delivery are considered, by the retailers, as the most popular with consumers. Despite this, 45% of retailers offer delivery within either 14 or 28 days although popularity is perceived to be low.
The survey also revealed that retailers have embraced the multi-channel approach to selling. 86% sell on-line, 80% through catalogues and 77% through retail outlets – meaning that many of those surveyed use two or three channels. And the retailers indicated their intention to add new channels to their sales portfolio in the coming 12 months with a growth in use of catalogues, the internet and stores of at least 5%.
Less than 20% of retailers said they outsource their logistics and/or warehousing operations. The most likely area to be outsourced is web design and hosting (33%).
Mr Taylor added: "Perhaps retailers should consider whether they have the resources or expertise to develop home shopping delivery options themselves as opposed to outsourcing the fulfilment to specialist third party organisations such as Consignia. Whilst the survey shows that retailer intentions towards fulfilment are on the right tracks, they will have to act fast to stay ahead of consumer demand by offering customers the full range of convenient delivery options – otherwise home shopping growth will come up against a bricks and clicks wall."
James Doyan, Consultancy Division Manager, Verdict Research Limited, commented, "Convenience and choice, universality and affordability are the hallmarks of the emerging, empowered consumerism. As such, the stakes are being raised in fulfilment because consumers want the convenience of their home shopping to embrace home delivery and fulfilment. The flexibility of more specific and flexible delivery times and assorted delivery options will be crucial in satisfying these more exacting demands."
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Notes to editors

*According to research by Jupiter, home shopping is expected to be a £20 billion industry by 2004.

· Consignia serves its UK customers through three main consumer brands of Royal Mail, Parcelforce Worldwide and the Post Office.

· Consignia offers a complete package of home shopping services – from warehousing to fulfilment, customer management to direct marketing expertise, and internet security.

· The organisation is firmly committed to serving every community nationwide. The network of some 18,000 Post Office branches is by far the UK's biggest retail chain.

· Royal Mail delivers packets to all 27 million UK addresses, no matter how remote.

· Handling 150 million parcels each year, more than 500,000 parcels per day, Parcelforce Worldwide provides delivery to the door of every one of the UK's 27 million addresses, no matter how remote.

· Parcelforce Worldwide provides access to the world's largest delivery network, covering more than 99.6 per cent of the global population and reaching 239 different countries and territories. Express services are available to 221 countries.

· £100 million has been invested in Parcelforce Worldwide's new International and National Distribution Hubs in Coventry to handle continued growth in express domestic and international traffic. Using the very latest sorting technology, they are able to process 50,000 parcels per hour.

· Consignia is also able to create bespoke logistics solutions to fulfil any or all of the elements of the supply chain. It has invested £18 million in a 35,000 sq metre, technologically-smart warehouse in Swindon to provide pick and pack services, on-time and just-in-time despatch and effective stock handling.

Summary of results:

· 71% of retailers interviewed use more than one company for deliveries, which is likely to reflect the speed of delivery required or nature of the item ordered. 68% said they use Royal Mail for deliveries and 50% Parcelforce Worldwide

· 40% of retailers believe that increasing numbers of customers are realising that shopping online has the same risks as using a credit card in a shop. A further 27% thought customers were more confident about shopping on the net

· 57% believe that trust in their brand on the high street gives people peace of mind when shopping on their website and the same figure allays customer concerns with a dedicated page on their website explaining their security systems

· To attempt to allay on-line security fears, 72% of retailers allow consumers to pay off-line, by cheque or postal order, for example
· 84% of retailers offer a returns facility direct by post and 64% offer a free, no questions asked returns service within a specified time period. In contrast with consumer research, retailers consider returns to be the fourth most important factor inhibiting home shopping growth compared with consumers, for whom it is the second most important.

· Most retailers are not preparing for Digital TV, with 60% believing it will have limited impact on their business

· Two thirds of all companies interviewed track the movement of goods and services through the supply chain

www.consignia.com