By Emily Black, Content Executive and Analyst at IMRG
In April 2022, we conducted a survey of 300 UK retailers. These were household name retailers, who were surveyed and then anonymised to find out about their delivery practices and what they might look like over the next few years. How has the pandemic shaped our expectations, and what will retailers implement in the future to keep customers around?
In the first question, we asked our retailers what were the current most popular delivery options, to find out what their customer base was opting for (this was a multiple selection answer). The most popular answers were standard, conditional, with 174 retailers using this—meaning a threshold spend or similar—and next day, paid, at 187. This was followed by click and collect, standard paid, and click and collect from a 3rd party location. The least selected answer was next day unconditional, at 8, likely due to the costs of implementing a next day system without a threshold.
We went on to ask our 300 retailers about their opinion of delivery subscription models to find out whether these could be a popular option in the future. With the rise of models such as Amazon Prime and ASOS next day delivery over the pandemic, delivery subscription models can benefit retailers by drawing customers back to their site as they know they’ll have quick, cheap delivery, but they are often difficult to implement or don’t suit a business model. In fact, 59% of retailers said this doesn’t suit their business model, whilst 24% said they’re economically risky. 19% were concerned about sustainability, and 4% said they didn’t like them. Only 7% said they have one and they plan to keep it. This suggests that subscription models are very personal to the business, and must be tailored to the model to make it viable.
Next, we asked about what retailers thought of click and collect or locker services, to scope out their popularity and usefulness in the industry. Interestingly, 43% said they should be investing a better click and collect service, which might be the result of the lockdowns lifting, as they now offer a more sustainable, and somewhat convenient—or cheaper—option to customers. Along these lines, 25% of retailers also said they wanted to introduce click and collect in the future. On the other hand, 20% don’t offer these services and don’t plan to, whilst 14% are prioritising home delivery. However, click and collect came out strongly overall, with a total 68% of retailers wanting to invest in their service or introduce one.
Sustainability is a huge topic when it comes to brand image and ethics, as customers have become more eco-oriented since the pandemic. During the UK lockdowns, some shoppers found the extra time and money needed to focus more on the morals and the image of the brands they bought from, so what are retailers doing to reflect this change in appetite? 85% of retailers said they use sustainable packaging materials, whilst 76% reduce waste in their packaging. Only 18% offer ‘green’ delivery options, and a further 18% offer return consolidations—however, after Zara caused a buzz by charging for returns, other retailers are thought to perhaps soon follow suit.
Finally, we asked our retailers which activities they’d be interested in for the future. There seems to be strong interest in the more sustainable and convenient options, such as lockers and click and collect (both at 58%). However, delivery hotspots and couriers waiting seem to be a long way off in the future, at 15% and 17% respectively.
We can conclude from our research that next day paid, and free, conditional, are the most popular current options for delivery; retailers are mainly involved in eco-conscious activities surrounding packaging; and click and collect, or locker service options could increase hugely over the next few years, perhaps as a means of mitigating emissions, and keeping costs down for both retailer and customer. This was only a small sample of our findings; to view the entire presentation of all of our questions and survey results, you can find our recording of virtual delivery summit here.
To find out what delivery experts think about the future, we spoke to our ecommerce community.
Emjay Lofts, Head of UKI Marketing, Esendex, said that, ‘The most important thing to look at is whether you’re designing and optimising the delivery experience for the customer or for your business—ideally, it should be a mixture of both but if in doubt, I’d say default to the customer. Keep them updated, whether that’s by email, SMS, or WhatsApp for Business. If the ‘buy, try and returns’ process is too slow and communication is poor, customers will vote with their mobile and go where service is better. I think sustainable choices at the checkout will become more important in the future. That might take the form of opting for a slower delivery time (to reduce carbon footprint when compared to next day delivery) or by handling returns locally rather than sending them back to a main depot.”
Marc Jiggins, Commercial Director at Yodel, suggested, “Retailers will need to focus on sustainability and convenience to drive great delivery experience for consumers. The ability to offer flexible solutions which enable consumers to choose where and when they want to receive or drop off their parcel will improve “Right First Time” success rates whilst reducing the miles travelled by each package. Yodel have launched our “My Account” feature within our Parcel Tracker App, which gives consumers the opportunity to delay delivery or set a default preference to divert their parcel to an alternative, convenient location.”
Barley Laing, the UK Managing Director at Melissa, argues, “Today, many retailers outsource their delivery or logistics and leave the issue of addresses to those agents to sort out. The issue is delivery is very much an intrinsic part of the brand experience, and consumers will associate their delivery experience directly with the brand they bought from – rather than the last mile van company that delivers the item. Logistics companies may not necessarily have the best data available to them, and use many sub-contractors in the delivery chain to the front door. Therefore, retailers must ask themselves if they really want to leave this very important function to chance, rather than ensuring it is optimised at low cost, and by doing so own the complete click to drop off customer experience.”
According to DPDgroup’s ecommerce Director Hervé Crochet, “On a backdrop of international unrest and fluctuating economies, shoppers may, more than ever, look to e-commerce to find bargains and deals. Carriers must respond to this price-oriented need by providing out-of-home and conveniently located delivery solutions such as lockers and pick-up shops while accelerating the use of data for first-time and on-time delivery. This will meet consignees’ personal delivery preferences. Finally and to gain these e-shoppers’ trust and loyalty, e-retailers will want to use data-driven insights and recommendations to provide a clear returns procedure to limit as much as possible returns and bracketing.”
Nick Williams, Head of Strategic Parcels Partnerships at Paypoint said, “For convenience store retailers, offering Collect+ parcel collection and returns services has never been easier and continues to provide an essential connection between online retailers and their customers. Free self-adhesive labels and seamless integration between the PayPoint One terminal and the Collect+ StoreScan app means processing print-in-store parcel returns takes mere moments, while simultaneously allowing retailers to take advantage of the increased footfall. Similarly, for consumers the convenience of print-in-store returns as well as having 10,000 Collect+ stores to choose from, many of which are open early until late seven days a week, has become a vital part of their relationship with online retailers.
Sacha Wilson, Senior Director of Avalara, observed, “It is important to show customers a final landed price when they buy – rather than a nasty surprise upon delivery. Happy customers mean repeat business, better reviews, and less likelihood of returns. Even with the correct tools to help calculate the correct price with duty and taxes included, retailers need to consider how to show that price to the customer. Either present it as a blended price and assume the customer knows or split out the shipping, tax and duty so that the customer is 100% clear about what they are paying and that there won’t be further surprises”
Fergal O’Carroll, CRO of Scurri, said that, “On average in the UK, three delivery options are available, which is seen to be the ideal number for many. The three main delivery options available tend to be standard, next-day delivery, or the increasingly popular click and collect. As things return to normal and shoppers return to the office and are out and about a bit more, the flexibility to order something online and then collect it in store, without the concern that this will be dropped off to the wrong address or lost in transit, has become very suitable for consumers. Retailers should utilise this flexible model.
There are tools on hand for retailers to use in order to make sure efficiencies are smooth, timely, and relevant. Data can play a huge role at all stages of the delivery experience, from telling you exactly what the customer wants for delivery, how much contact and communication is most effective, and what improvement steps you should take to increase customer satisfaction. This can all be achieved through the collection of customer feedback, post-purchase and post-delivery.
Real-time visibility from the moment the order is placed, packaged and delivered is crucial. It creates a sense of security for the customer and the transparency that is desired in the delivery process. The journey should be seamless for buyer, seller, courier, and all other stakeholders – and tech aids in ensuring this.”
Gavin Mounce, Ecommerce Design Manager at DS Smith suggested, “To ensure an excellent delivery experience, businesses must prioritise protecting their packages. Failure to do so risks customer satisfaction and may even result in damaged products being returned.
By optimising packaging for deliveries, businesses can reduce material costs whilst providing a more sustainable service. Even the smallest changes to a box can make a large cumulative impact when the new designs are produced at scale, with the potential to make big savings on material fibres. We encourage brands to engage with our Pack Right review to create bespoke solutions that provide positive delivery experiences for consumers.”
Alex Smith, Director within Consulting Services at Sovos, said, “Often when it comes to the delivery experience the indirect tax implications of the sale are overlooked. Making sure your compliant from a VAT and customs perspective is key to a good delivery experience. As a customer, it significantly impacts the experience if there are surprise bills such as VAT or customs duty being levied before collection is possible – ensuring the final price is known at the outset is key. With the introduction of EU VAT e-commerce package, customs document changes and Brexit, businesses need to ensure they are compliant and meeting their customers’ demands. Ultimately it is about utilising the current options efficiently whilst keeping one on eye on future changes.”
Henrik Fabrin, CEO & Co-founder of Certainly noted, “The holy grail of optimising the returns process is reducing the number of returns you actually have to make. This, of course, is becoming more difficult for fashion now the lockdowns have finished, and size and fit are a lot more important to customers. So, webshops need to make sure that their visitors chose the correct item the first time round; luckily there are many new technologies to help this, such as AR ‘mirrors’ to show how an item might look, intelligent sizing guides, and AI chatbots that act as virtual personal shoppers, getting users exactly what they need.”