Delivering the goods when the price is right
“Why is click and collect one of the fastest growing delivery trends?” asks Tom Allason, founder and chief executive of rapid delivery service provider Shutl, before answering the question himself. “Because delivery sucks. Consumers see delivery charges as bad value. But, where offered, two-thirds of consumers are choosing the ASAP [as soon as possible] option. The industry now needs to focus on bringing the cost of that down.”
Research suggests, however, that the sector is moving Mr Allason’s way. According to data from supply chain software company Manhattan Associates, 39 per cent of retailers were planning to offer same-day delivery within the next 18 months, while 10 per cent were launching two-hour deliveries. A further 23 per cent said they would also provide click and collect services in-store.
Shutl, which works with retailers as diverse as Argos and Oasis, recently announced builders merchant Jewson as a new customer. David Fenton, Jewson marketing director, says their internal research reflected growing demand from customers for faster delivery. “We wanted to ascertain the day-to-day issues they face while working on site,” he explains. “Running out of product and material, coupled with traffic congestion and parking restrictions were top of the list. Our partnership with Shutl will help to address this, allowing the customer more time on the job.”
The mainstream of consumers is very price-sensitive to delivery charges and so want a number of different options
Stuart Miller, co-founder and chief executive of locker-based, click and collect delivery service provider ByBox, agrees there will always be situations where the consumer is willing to pay a premium for speedy delivery. But cost will continue to be an issue for many, he says. “The mainstream of consumers is very price-sensitive to delivery charges and so want a number of different options.
“Locker delivery can extend local store opening hours, as with a shoe repair shop next to a train station that we work with, for example. Customers drop off shoes for repair on their way to work in the morning and can collect them when they come home, outside opening hours.” Mr Miller adds: “There’s also a chance you’d walk into a store when collecting a parcel from a locker outside, especially if the locker screen surfaces offer the option to, say, send vouchers to your mobile phone to spend today in that store.”
Lindsay Haselhurst, development director for logistics provider Wincanton, confirms an upsurge in demand for services offering more convenience. She says collection hubs avoid missed home deliveries, while click and collect extends wider inventory choice to customers served locally by smaller-range stores. Demand is also growing for value-added services, such as sending text messages before a delivery, to enable customers to respond and “flex the delivery to an alternative time and even location of their choice”.
Innovative delivery options are also a key consideration in cross-border retailing. David Hogg, commerce solutions regional leader for IBM, warns: “Internationalisation is seen as an e-commerce technology challenge. Logistics shouldn’t be an afterthought,” He says retailers expanding into Africa, for instance, find there are no multi-country delivery providers, where some have built their own capability, which also have to take into account local currency and legal regulations.
Ms Haselhurst highlights the reverse logistics of managing returns as another significant retail fulfilment challenge. “There is significant value to be gained from improving the speed and responsiveness of managing customer returns for the customer in getting a refund or replacement promptly, but also for the retailer by turning around returned items for resale.”
Lee Gill, regional vice president of retail strategy for supply chain software company JDA, concludes that today’s last-mile challenges would be met by “creating an optimised delivery network where fulfilment locations – anywhere the inventory resides – are configured by capacity, lead times and resource capability to serve the needs of all-channel commerce”.