Member Article

The delivery battleground

The technological empowerment of consumers and changing retailing regulations have created a wealth of growth opportunities, as outlined by Liam McElroy, managing director for ecommerce and retail at Wincanton

Advancements in mobile technologies have allowed consumers to make faster, more reactive purchasing decisions, and they expect their products to be with them equally quickly, meaning delivery has fast become a key differentiator for retailers.

The speed of change has been considerable. Until just a few years ago it was considered commonplace that orders made after 8pm would be excluded from next day delivery, but today consumers expect that order windows remain open until 10pm and we are already seeing this extended to midnight with some retailers.

Last month new legislation came into effect, cutting the red tape and costs associated with introducing click-and-collective services in response to a wider trend towards more flexible, multichannel delivery approaches, alongside the rising popularity of home delivery and public parcel lockers.

Subsequently all retailers will be allowed to offer click-and-collect services in store, which presents new opportunities for business growth – providing they have a suitable and sustainable supply chain in place to maximise profitability.

Knowledge is power

The mobile technology driving these changing consumer behaviours brings with it a wealth of new data for businesses to utilise. In order to make the most of these insights, retailers need to share this information with their supply chain service providers to identify more efficient delivery options that can be tailored to suit the retailer’s needs and the buying habits of their customers.

Only by understanding the requirements of consumers can retailers and supply chain providers assess the best available options for product warehousing and develop advanced planning around key retail periods like Christmas to be more reactive and capitalise on demand. One only needs to think back to Black Friday 2014 to understand the importance of efficient delivery services to the reputation of a brand.

By utilising such insights it may well be feasible to further reduce delivery windows to support business growth, but this requires a full understanding of the repercussions on retailers’ wider business and suppliers.

Changing approach to delivery

However the onus has not only fallen on retailers. The speed at which consumer behaviours and expectations have developed has led the logistics industry, including companies like Wincanton, to review its own processes to ensure that it is able to best serve the needs of retailers.

The growing popularity of click-and-collect and home delivery is more in line with the logistics models traditionally employed in the convenience industry, which requires smaller and more frequent deliveries. As such, we are likely to see more innovative approaches to retail deliveries in the future, such as increased use of smaller vehicles that are better able to serve urban centres and multiple delivery points, alongside larger trailers for longer-distance consignments.

Retailers must seize this new legislation as there are a plethora of opportunities to steal market share for those businesses that understand their customers and suppliers and can implement an increasingly responsive supply chain.

Ever shortening delivery times will continue to be a key differentiator for brands in the years to come, and will remain in the forefront of consumer consideration when deciding where to spend their money. Fulfilling these expectations will not be easy but it is achievable through the adoption of technology and close collaboration and communication across the supply chain. Exciting times lie ahead for both the retail and the logistics industries, and it is a future we face together.

This was posted in Bdaily's Members' News section by Liam McElroy .