Customer expectations around cost, speed and precision of delivery have evolved as digital retail has become more established, with greater emphasis on visibility and control. Retailers need to rise to this challenge and think creatively about every stage of their logistics operations to ensure the best customer experience.
In-flight tracking systems, allowing customers to follow the van containing their parcel in real time, are becoming more commonplace. They usually require moving between the retailer and carrier websites, creating a disjointed customer experience, so the next step is integration with retailers’ own sites. We worked with Yodel to develop Xperience, a tracking service within Very.co.uk and Littlewoods.com that means customers only visit one site throughout the purchasing and delivery journey. This simplified the process and reduced customer service contact about delivery.
Speed remains important, but delivery precision has become top priority for many customers. They want to choose an exact date and time for delivery and have the ability to rearrange or divert the parcel to a neighbour or Collect+ location up to the moment of drop off. Giving customers this level of control has benefits for both logistics providers and the environment. In central London, the Ultra Low Emission Zone encourages retailers to consolidate deliveries through third party centres outside the zone, focus deliveries on collection points or find other innovative ways of reducing road miles.
With congestion charges likely to be introduced in other cities, we’ll see more of this and, in turn, customers will get used to precise delivery scheduling and growing cost differentials between free choice of delivery day and time or a slot which is most convenient for the carrier. Carriers will increasingly advertise fixed daily or weekly schedules, both to customers’ homes and large workplaces, resulting in more efficient use of vehicles, fewer road miles and lower CO2 emissions.
Logistics vehicles will evolve, with electric, autonomous and semi-autonomous trucks becoming the norm. ‘Platooning’, where one truck with a driver is followed by several other driverless vehicles, is being tested all over the world. Consumers have become comfortable with delivery to lockers, and this technology would integrate well with autonomous vehicles. Rather than travel to a locker in a fixed location for parcel collection, autonomous vehicles containing lockers could be used for home delivery.
As global warming opens up new routes through the Arctic Ocean, UK ports could play a greater role in logistics. Better vessel design and smarter use of capacity will be key, along with the creation of more deep sea ports – capable of holding large international shipping vessels – of which there are currently very few in the UK. Ports in the North of England and on the east coast of Scotland in particular could see increased trade.
More retailers will consider rail as an alternative to trucks for long journeys, albeit Government investment to improve the rail network is needed to make this viable. The rail freight terminal at East Midlands Gateway, where our new distribution centre will open in 2020, was an important factor in our choice of location. The terminal, combined with the site’s location at the centre of the UK’s population, will help us save around 1 million road miles every year.
Same-day delivery has been talked about widely and most retailers will eventually offer this option. Closer proximity to our carrier partners and customers was another deciding factor in the location of our distribution centre, meaning we can extend next-day delivery cut-off from 7pm to 10pm. We’ll later increase this to midnight and consider same-day delivery in the longer term. That said, higher costs associated with same-day delivery mean that many retailers will inevitably charge a premium for the service. As most customers are price-sensitive, it’s unlikely to account for the majority of online orders any time soon.
Some non-fashion retailers are moving towards a returns model already used in the fashion industry, in which customers generate specific details of their return online rather than include a standard returns label within the delivery parcel. Pre-registration of returns gives greater visibility of stock coming back and means retailers can prepare products for sale again more quickly. It also means they can divert stock to locations other than their own distribution centres, such as directly back to suppliers. We expect much greater take-up of this model from fashion retailers too, as it becomes more widespread in the online retail industry as a whole.
In such a competitive marketplace, offering the best delivery and returns experience can help a retailer to stand out. Businesses that think today about how to future-proof their logistics operations for tomorrow will be well-placed to do just that.
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