Twitter
Facebook
Linked In
RSS
Login or Register
New to InternetRetailing?
Register Now
Internet Retailing
IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

You are in: > Home > Magazine > Magazine Articles

This is your 1 complimentary article for this month

Become a member for unlimited and immediate access.


Register
Already a member? Log in here

How mobile is changing delivery dynamics

Linked InTwitterFacebookeCard
How mobile is changing delivery dynamics
How mobile is changing delivery dynamics
With mobile commerce and pick-up in-store options on the increase, Emma Herrod takes a look at how they are affecting the dynamics of delivery.

The internet has given rise to instant answers, such as if the required product is in stock, and instant gratification in the form of digital downloads, while digital money has further distanced transactions from ‘real’ cash. Hand in hand with the rise in m-commerce has come click and collect, with advances in logistics and delivery enabling later cut-off times for next-day delivery (10pm in shoe retailer Schuh’s case ) and the ability to defer a planned delivery by text message. But do shoppers who convert on mobile phones (as opposed to tablets) want their purchases faster, or just at a more convenient time or at a time and location that they can predict?

Smartphones account for 42% of traffic to Schuh’s website and almost 25% of sales, so mobile is an important part of the retailer’s channel mix and the reasoning behind the September launch of its responsive, mobile-first website. It has had a single view of stock for many years and offers its customers a range of fulfilment options including next-day delivery, click and collect, and reserve online for trying on and paying in store.

The rise in online orders placed from mobile and tablet devices is changing delivery dynamics, believes Sean McKee, Head of Ecommerce and Customer Services at Schuh. “It’s affecting demand for next-day delivery and in-store pick-up, including reserve online and click and collect,” he says.

For example, figures for August 2014 show a 40% growth in mobile customers using buy and collect and a 19% increase in check and reserve from mobiles. These are both like-for-like figures, explains McKee. “There’s also been a year-on-year increase in the number of customers checking stock levels,” he says.

Shoppers who convert on mobile are looking for convenience and a brief visit. They also want things cheaper and faster, so when prices are lowered more mobile shoppers go for it, he comments. Schuh has also found that in-store pick-up is highly seasonal and highly mobile.

When the company analysed the behaviours of its shoppers who convert on a smartphone (as opposed to desktop, tablet or purchase in-store without first reserving online), it found that “mobile is punching well above its weight with next-day delivery”.

Mobile is punching well above its weight with next-day delivery


There’s a sweet spot for mobile shoppers between convenience, very fast delivery and cost, explains McKee. The company has been experimenting with different price points for its next-day delivery service, reducing it from its standard price of £4.99 to £2 and £1. Customers who pay for premium services at Schuh generally spend more and buy more. It has also been looking at how reducing the delivery price affects volume. The result, says McKee, is: “We can take the price down as long as we can afford it without affecting volume.”

You may think the company has generated these figures because its customers have a young demographic (its marketing is aimed at females under 30), but Schuh is not alone in discovering that shoppers converting on their mobiles are choosing faster delivery options.

Marks & Spencer has found an interesting difference between those shopping via mobile and those using other sales channels: a higher proportion of mobile customers – between 10-15%pts higher – opt for free, next-day, in-store collection than desktop and tablet users.

Argos is also seeing higher check and reserve participation from mobile-based customers, ahead of tablet and the website – primarily due to how convenient Check and Reserve is for customers when they are out and about. “Features like 1-Click reservation on mobile make shopping extremely quick and efficient,” says Paul Jackson, Head of Digital Development at the retailer.

He believes that the shift to shopping on mobile and tablet devices is fundamentally changing the way we shop. At Argos, mobile commerce has grown by 89% in the past year alone to reach 18% of sales. “Customers expect more choice, available faster. As a retailer, we have to adapt to these changes and that means finding new ways to get the products they want into their hands faster,” he comments.

“However, we find that Argos customers will use multiple shopping channels interchangeably in a single transaction, because they can. Although 44% of sales start online, 90% of transactions still involve a store. Typically, this involves researching on the move via mobile and reserving on the website.”

For some shoppers, speed is a key requirement, while for others it is convenience. Schuh and M&S put their figures down to convenience, while at Argos the approach is more about delivery on customers’ own terms: when they want it, how they want it. Jackson adds: “The challenge we have set ourselves with our transformation plan is to give customers a consistent experience across all channels, with a clear view of where the product they want is in the system.”

RESEARCH

Mobile shoppers are more mobile by nature and “it would be reasonable to hypothesise that mobile shoppers are more likely to use click and collect,” says Andrew Starkey, Head of e-Logistics at IMRG .

However, research has shown that shoppers using their mobile to make a purchase online want the same delivery options they’d be offered if shopping from a desktop-optimised site. What they do want is delivery advice and messages about the status of their order sent to their mobile device free of charge.

Mobile phones are allowing innovation in delivery, enabling carriers and retailers to push information to these devices so shoppers can anticipate when delivery will take place, and divert or defer it, explains Starkey.

As soon as retailers start putting a cost on enhancements such as next-day delivery or specified days, then this can suppress demand as customers opt for the economy version. Having a pre-alert text service on these economy services increasingly enables customers to defer delivery via text if the initial date and time isn’t convenient. This increases their confidence that delivery will happen at a time that suits them, while keeping the number of delivery attempts low.

This predictability of knowing where they will be and when, is driving innovation in retail logistics; whereas next day delivery services are a proxy for predictability with the shopper being able to predict where they will be when in order to take the delivery with enough confidence to place their order.

Customers want delivery messages sent to their mobile device free of charge


City Link has become the latest carrier to introduce mobile messaging and response to allow customers to change delivery options before a delivery attempt takes place, while Blackbay is taking this one step further with its consumer preferences portal which it launched as part of its Expect capability. Not only does Expect include driver and operational tools to optimise routes, but it also provides consumers with an interface to control, track and interact with their deliveries and collections.

Meanwhile UPS’s My Choice service, which launched in the US in 2011, has been expanded to an additional 15 countries in North America and Europe, including the UK. This allows shoppers to change details such as delivery date and location, including rerouting parcels to one of the rapidly growing number of UPS Access Point locations such as newsagents and self-service lockers.

OPERATIONS

The humble text message is still the communication medium of choice after a sale. “It’s the best way to get to the customer post-purchase, especially if they have chosen store pick-up as the fulfilment option,” says McKee. He explains that when the customer’s order is ready to be collected, a store colleague ticks a box on a screen and a text alert is automatically sent to the customer. Orders reserved online can be ready in 20 minutes, while orders paid for online are ready in 1 hour.

Customers who use Argos’ Check and Reserve service are sent texts containing the key information they need to collect their products, too. “We also use push notifications to target highly relevant information to our customers,” says Jackson. Customer feedback and reviews are also adapted for mobile.

How is this affecting operations?

If retailers are to get purchases into customers’ hands quickly and efficiently, regardless of the channel through which they have placed their order, they need to know where every item of stock is located and the best route for getting it to the customer.

Argos’ ‘hub and spoke’ stocking configuration, which had been rolled out nationally, enables the retailer to offer customers same-day and next-day collection options on an expanded range of around 20,000 products, together with improved stock availability. “It involves moving stock from around 140 larger ‘hub’ stores to around 6 smaller ‘spoke’ stores within an area, to where the customers want that product, with our own store colleagues making the deliveries between the local stores,” says Jackson.

Schuh has had a single view of stock for many years and has opened that up to customers to view on their mobile phones; in effect, they access the same data that’s held in the in-store kiosks. Its main DC in Bathgate has just been expanded to double capacity. This is supplemented by a satellite DC in West Bromwich, which opened in late November 2013 to fulfil orders placed after 5pm for next-day delivery. “Tablet users are shopping later, between 8.30 – 9pm, therefore we have to fulfil orders later,” says McKee.

“Competition is moving to fulfilment – fast and free for both home delivery and local collection,” believes Jackson. McKee agrees. Schuh sells brands that shoppers can get from other retailers, so the company has to use quick and accurate fulfilment as a way of differentiating itself. “We are in a logistics marketplace as well as a product marketplace,” he says. With a definite swing towards next-day delivery, McKee believes that there will come a time in 2016 or 2017 when it will be what standard free delivery looks like today.
Linked InTwitterFacebookeCard

Become a Member

Create your own public-facing profile
Gain access to all Top500 research
Personalise your experience on IR.net
Internet Retailing
We are the magazine, portal and research source for European ecommerce and multichannel retail, hosting the board-level conversation for retailers, pureplays and brands across all of our platforms. Join the conversation.

© InternetRetailing Media

Latest Tweet

Internet Retailing
Tamebay
eDelivery
Twitter
Facebook
Linked In
Youtube
RSS
RSS
Youtube
Google
Linked In
Facebook
Twitter