Member Article

What’s the Future of Online Retail Delivery?

In the future, online retail delivery needs to be quicker and more convenient for the customer – and here’s a few ideas of how it can be achieved.

The move towards omni-channel retailing raises new problems for the multi-channel director who is tasked with designing and supporting the future of online retail operations. Just as customers rely on being able to make purchases at their convenience, a similar level of flexibility is now expected when it comes to taking delivery of goods.

In this article we look at how these changing customer expectations are affecting the future of online retail.

Customers demand flexible, timely delivery

A combination of shortened buying cycles coupled with an increase in general internet shopping has drastically changed consumer demands.

Because consumers now buy even low-ticket essentials online:

• They need to take delivery of their items more quickly.
• They won’t book time off work to wait for a vaguely scheduled courier deliveries.
• They are unwilling to wait for delivery by an increasingly unreliable postal network.
• Their employers may have implemented rules forbidding receipt of deliveries in the workplace.

Whilst Amazon-style aerial drone delivery might still be some way off, there are practical steps retailers can take to speed up delivery. Click-and-collect type arrangements are popular with the ‘I want it right now’ customer. High street stalwarts Argos and John Lewis have led the way in providing online ordering with in-store collection options to customers.

“68% of retailers currently offer next-day delivery, compared to 61% in 2012.”

2013 Online Retail Delivery Report

Department store Selfridges has gone further, introducing the world’s first drive-through collection point at their Oxford Street flagship store; Londoners can collect their online orders without the hassle of finding somewhere to park. Keen to prove that pure-play internet retailers can provide a similar service, Amazon has recently been trialling same-day deliveries to Londoners – the option is strictly limited, however, and considerably more expensive than other delivery methods.

What about online retailers?

The future of online retail must therefore include improvements to delivery speeds and convenience. At present, most appear to be implementing solutions that deliver orders to a central point, ready for collection by the customer:

• eBay has announced a partnership with high street retailer Argos, allowing customers to collect orders from some of their stores.
• Amazon has deployed secure lockers to many UK cities; orders are left in the lockers ready for collection by the customer.
• Leading brands such as ASOS, M&S and Clarks are using the Collect+ service offered at corner shops, from early till late, seven days a week, to offer consumers easy pick-ups and free returns, at their convenience.
• Many couriers now offer evening services and also use GPS systems linked to the web to enable consumers to track their delivery and ensure a short, accurate delivery time slot. ASOS has taken advantage of this, launching a Follow My Parcel service, providing real-time info via web and mobile, and 15-minute delivery windows, so customers know exactly where their parcel is
• Meanwhile, House of Fraser has launched seven-day-a-week, next-evening delivery slots. Dixons has launched same-day delivery for orders made before 9.30am, and extended its next-day delivery cut off to midnight.

“It makes sense to forge a partnership with national retailers, and we’ll see more of this because it marries the benefits of online shopping – competitive prices and massive ranges – with the convenience of the real-world store you can pop into on your way home.“

Bryan Roberts, analyst at Kantar Research

Both systems work on a next-day delivery principle, helping to shorten the order fulfillment timeframe.

“For online retailers, one of the most critical processes is getting your product to customers. With the growth of e-commerce, order fulfilment is now a critical business function and retailers are challenged to deliver the perfect order every time while providing a consistent brand experience from channel to channel; in store, catalogue or online.“

Stibo Systems

The future of online retail delivery

To compete with businesses that operate their own outlets, as an online retailer you have a few options:

Create partnerships with established stores who can store customer orders and process paperwork for collection. Source specialist couriers who can facilitate same-day deliveries to local customers.

“As the e-commerce market becomes more crowded, a growing number of e-tailers are likely to try and satisfy people’s desire for immediacy by offering next- or even same-day delivery.” James Hardy, head of Europe – Alibaba.com

To make this work however, you’ll need to consider:

• Your order fulfilment and returns processes. Are you minimising administrative overheads for your bricks-and-mortar partners who provide customer collections points?
• Evaluating your couriers and the services they provide. Do they match the requirements and expectations of your customers?
• How your systems will integrate with partners and couriers for efficient supply chain management and top quality customer service.
• Your existing retail outlets – are there any innovative ways your can make customer collections easier?

To help prepare yourself for the future of online retail delivery, download the eGuide: Tomorrow’s World: discover the multi-channel retail business of the future. Copy and paste the link into your browser: http://bit.ly/MultiChanneletail

This was posted in Bdaily's Members' News section by Ian Newcombe .