Search

What will be the delivery trends in 2019?

By Will Gillingham

Delivery is a continually improving element of the retail industry. 2018 saw the normalising of next-day options to such an extent that, on average, they were selected more than the traditional 2-3-day economy window; click and collect bloomed to take over a third of multichannel online orders; reception of an order in under two hours after purchase became viable (for a small number of very large retailers, at least).

But the fast-evolving delivery sector has also allowed for negative trends to spring up around it: namely, a culture of returning one-time use clothing for the ‘hashtag moment’, otherwise known as serial returning, and a slew of failed deliveries so that the level of on-time delivery remains consistently below that of 2015-16.

There’s no doubt that 2019 will see further revolutions in the delivery sector. But what exactly are these likely to be? We approached our community of logistics experts for their insight.

Subscription

Subscription is already firmly commonplace in the UK. It’s more than likely that you’re subscribed to a film streaming service, or a gym, or a music platform, and if somehow you’re not, then someone you know definitely is.

The idea of paying a fixed monthly fee for goods is one which is merging into the retail space. There are already a number of companies which only work on subscription, and Rob Barham, Group Sales and Marketing Director of Air Business, believes 2019 will represent a shift to this way of purchasing.

Barham: ‘We are seeing a large trend towards recurring revenue streams as consumers move towards regular deliveries of both consumables and treats. Consumables are regular household and personal “must haves” covering pet food, printer inks, beauty products, alcohol, cleaning products and many more. Just look at the options on Amazon Subscribe & Save, where consumers can save money and choose their delivery frequency on a huge range of products.

The treat market is also growing with subscription boxes. Whilst not essential purchases, they are proving popular with consumers self-gifting to themselves or buying them for friends and family. Recent Royal Mail research predicts the market to be worth £1 billion by 2022, with new nimble operations launching into retailer and FMCG territory.

Signing contract

Refinement of Returns

Serial returning was reported earlier in the year to have created a phantom economy, causing a loss of £7bn in the retail sector. On top of this, returns in general can leave items in a state of limbo for extended periods of time instead of being back on shelves as sellable stock.

Owing to this, Neil Ashworth, CCO of Yodel and CEO of CollectPlus, expects 2019 to see an overhaul to how returns are handled.

Ashworth: ‘In the UK’s fast fashion sector, returns continue to be prevalent, hitting 50% in many cases. How retailers respond to this trend is crucial to their success over the next 12 months; after all, the returns channel often makes up the majority of a retailer’s daily inbound stock. Ensuring that returns can be processed swiftly not only means that items can be returned to inventory quickly but also enables customers to be refunded promptly so that they can buy again. Both are factors that are increasingly important in boosting the retailer’s bottom line.

An alternate solution to high levels of returns is proposed by Mike Richmond, CCO, Doddle. He anticipates retailers limiting the amount of returns they receive prior to processing the returns themselves.

Richmond: ‘Retailers grappling back control over spiralling returns will be a key theme. We’ll see more retailers banning serial returners and there’ll be more effective returns handling through data and predictive analytics. We might also start to see segmented returns policies – one rule for ‘good’ returners or VIPs, and another rule for the rest.

Further to the detrimental effect returns can have on retailers is the effect the culture has on the environment. ReBOUND claims addressing returns is a matter of conservation rather than revenue retention.

Charlotte Monk-Chipman, Marketing Director, ReBOUND Returns: ‘In 2018, sustainable fashion became a parliamentary issue, exposing the practice of both fast-fashion and luxury brands sending millions of pounds worth of unsold stock to landfill. It’s estimated that 235 million garments were sent to landfill last year, so it’s not surprising that 41% of retailers are not satisfied with their data on returns & onward disposal/value-recovery.

ReBOUND estimates that fashion returns alone have a financial impact of £6.6bn in the UK. Add these financial implications on top of the corporate social responsibility of leading retailers and the retail landscape next year ought to have greater focus on capturing, analysing and intelligently acting upon returns data.

And beyond returns, environmental policies have entered customers’ minds as being of more importance than price. Owing to this, another likely trend for 2019 is a general leaning towards environmentalism.

Fashion

Environment

According to UPS and MetaPack, you should expect to see greener delivery practices in 2019. As Bruce Fair, CRO, MetaPack explains: ‘an emerging trend is the increasing importance of ‘eco-friendly’ deliveries. Research we carried out this year shows that 77% of consumers are conscious of, or care deeply about, the environment when thinking about how they receive their deliveries. Numerous start-ups are bringing crowd-powered hyper-local ultra-fast (mostly green) delivery.

Kiel Harkness, Marketing Director, UPS UK, Ireland, and Nordics, supports Fair’s view. He states: ‘Sustainability is a topic that everyone needs to get behind; congestion and corresponding pollution is a growing problem that urban cities across Europe and the UK are working hard to reduce.’ In light of this, he notes that UPS have been trialling electric freight vehicles and the concept of delivery drivers cycling out from their vans.

With logistics providers not only aware of the need for environmental measures but already making inroads into combatting sustainability issues, this is one trend which should have an assured presence in 2019.

Lightbulb plant

Company Couriers

That is, couriers who are trained in customer experience and ready to work on behalf of the retailer they’re representing. With the continual lean towards buying online, in-store customer experience is slowly becoming an underplayed aspect of the retail experience. As a result, this upselling opportunity will need to be redistributed.

As Paul Durkin, Director of Home and eFulfilment at Wincanton explains: ‘Through 2019 we’ll see the role of the delivery technician (nee driver and mate) further develop and evolve at a greater rate to meet consumer and business needs. Their role in the sales process will increase, extending this all the way into customers’ homes.

Often delivery technicians will be the only point of contact the customer has with the brand. Candidates will need more than a clean driving license, with skills in customer service and product knowledge likely to become more and more important.

Cyclist

Convenience

It perhaps goes without saying that the final say in any delivery proposition is to make it a better experience for the customer, but that doesn’t negate its presence as a significant trend for 2019.

Louise Robertson, Marketing Director for Localz, has identified the five aspects of delivery which are most important to a customer, informed by recent research Localz have conducted. She states these are: flexibility, transparency, direct communication, clarity, and punctuality.

Further to this, Robertson states: ‘All day delivery slots will be a thing of the past. People won’t sit indoors for an 8-hour window. Our summer survey revealed that the hours of 6pm - 8pm are the most preferred time slots. With the demand for same day delivery, ship from store will increase. Collection is taking on more formats, with lockers and drive-through adding options for customers.

Stuart Higgins, Partner at BearingPoint, is similarly confident in the boost to customer convenience in 2019, stating: ‘The race for speed will continue, with the volume of same day deliveries doubling (albeit off a low base) and next day volumes growing by around 1/5 to reach over 40% of total delivery volume. More and more retailers will fulfil online orders from store stock, giving the combined benefits of shorter lead time (as the stock is closer to the end customer) and improved inventory deployment / sell through.

In All

2019 is going to be an interesting year for delivery. With a predicted climb in the usage of next-day delivery coupled with a leaning towards greener propositions, and perhaps even the increasing emergence of subscriptions as the norm, there’s a chance the delivery we’re used to right now won’t look the same this time next year.

All that remains is to wait and see.

Will Gillingham, Content Executive, IMRG

Join thousands of other Online Retail professionals

Get unique insights straight to your inbox for free, and improve your understanding of online retail. Subscribe to Online Retail Weekly now.

Data Summit 2019 scroll banner