Driving customer experience with flexible delivery solutions

Paul Galpin, the Managing Director of P2P Mailing, finds that as the retail landscape has evolved, so too have the demands of the consumer. Argos has become the first British retailer to offer its customers a same-day delivery service, up to 22:00, 7 days a week.[1] This new system will cover the retailer’s 20,000 most popular products and customers will have the choice of four time slots every day, including up until 22:00, for a flat fee of £3.95.

But what does this move mean for the retail sector as a whole?

The temptation is for other companies to take their cue from Argos and offer their own same-day service in order to enhance the customer experience. However, not all retailers are operating to the same capacity as Argos and may lack the required infrastructure to guarantee a seamless same-day delivery operation. This can have far reaching repercussions on customer relations. The key is to identify who your customer is and tailor your delivery operations in line with the size and scale of your business.

With high profit margins at stake, especially in the run-up to Christmas, retailers have to work harder than ever to meet customer expectations.

A recent study  found that the UK had the third highest dissatisfaction rate with online shopping due to inconvenient delivery dates and times being offered by retailers. [2] Failure to deliver promptly could mean that retailers lose the customers that they have disappointed, but they could also alienate a raft of potential customers they haven’t yet engaged with. These customers make up an online market that will be worth $4.2 trillion dollars in the G20 economies by 2016.[3] Add social media to the mix and customers are just one click away from giving retailers a public dressing down with huge reputational knock-on effects

In order to meet customer demands, retailers are embracing innovative delivery solutions; with same-day delivery the latest in a long line of examples. Indeed, last year Network Rail announced parcel collection shops in stations would go nationwide, with 300 new openings across the UK over the next three years.[4] Prior to that, the concept of click and in-store collect had been widely embraced by a number of high profile retailers. The key pattern behind each of these examples is convenience geared towards the consumer.

The growth of online retail has been matched by the growth of consumer expectation. Customers now presume that they will be able to order the product that they want at any time of the day, and for it to arrive promptly when and where they expect it. However, no two customers are the same. To cater for this large and diverse audience, retailers need to offer a greater range of delivery options. Previously, offering a sole, standard delivery service may have been feasible. Now, other channels such as trackable and express deliveries are required to ensure retailers appeal to a wider audience.

Consumer expectations on delivery will also vary according to the territories that a retailer is looking to target. For example, unlike in the UK where pick up points are only just becoming widespread, in France almost a third (28%) of products ordered at distance are delivered to pick up points.[5]  Similarly in Scandinavia pick up points are the standard form of delivery thanks to the widely dispersed population.[6]

In addition to working out how items will be delivered, it’s also vital to consider how you might get them back, should the need arise. A good returns system is something that many companies can forget to implement or implement poorly. If customers find it difficult to return goods, it’s likely that they may look to a competitor next time. Research by Harris Interactive shows that 85% of customers say they will stop buying from a retailer if the returns process is a hassle and, conversely, 95% will return to the same catalogue or internet retailer if the process is convenient.

What lessons can be learnt from Argos’ introduction of same-day delivery? As the retail landscape has evolved so too have the demands of the consumer. However, it is important to remember that delivery preferences may vary considerably from customer to customer. The underlying message is to know your customer and tailor your delivery solutions accordingly. By offering flexible delivery solutions, retailers are able to offer greater choice which positively impacts the overall customer experience. By engaging with a third-party expert with the necessary knowledge contacts and expertise, retailers can truly make the most of flexible delivery and create solutions in line with the size and scale of their business.

 

[1] BBC Business, ‘Argos same-day delivery push ready for Christmas’, http://www.bbc.co.uk/news/business-34460149, 7 October 2015

[2] The Drum, ‘Growth anticipated for online retailers who offer next day delivery services’, http://www.thedrum.com/news/2014/07/02/growth-anticipated-online-retailers-who-offer-next-day-delivery-services, 2 July 2015

[3] BCG Perspectives by the Boston Consulting Group, ‘The Internet Economy in the G20’, 19 March 2012

[4] Internet Retailing, ‘Doddle railway parcel collection shops to expand nationwide’, http://internetretailing.net/2014/06/doddle-railway-parcel-collection-shops-to-expand-nationwide/, 19 June

[5] INRETS, ‘An evaluation of recent pick up point experiments in European cities: The rise of two competing models?’, July 2007

[6] bPost International, ‘The advent of pick-up points as delivery solutions’, 04 August 2014