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Why fast and furious is likely to be the delivery theme of 2018

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Liz Morrell, Editor, eDelivery looks ahead to how 2018 will shape up for the final mile.



As 2017 becomes a fading memory attention has already turned to the delivery trends that the new year will bring and how the expectations of customers and the ability of delivery partners – both old and new – will continue to rapidly evolve. What this will bring in terms of change is hard to predict but certainly speed is proving more important than ever as retailers fight to emulate the convenience and speed offered by giants such as Amazon .

Delivery will continue to define the customer experience online with MetaPack’s 2017 State of Ecommerce Delivery Consumer Research report suggesting that for more than half (54%) of shoppers delivery defines exactly who they choose to shop with.

The study also showed that the majority of shoppers (52%) wanted fast delivery as a top or second important priority whilst demand for same-day services is also rising.

Just before Christmas, electricals retailer Currys PC World was the latest company to announce the launch of a same-day delivery service across the UK. The electricals giant has partnered with On the dot to allow customers a choice of two-hour delivery timeslots. Although the service is at a £9.95 premium the convenience it offers means that it’s likely that customers will take it up. A same day expectation is likely to be an increasing pressure for retailers to offer this year thanks to ever more demanding customers. In December, Sorted revealed the results of a survey of 2,000 UK shoppers which showed that more than half (59%) wanted faster fulfilment.

Towards the end of last year, Asos extended its newly introduced same day delivery service – also in partnership with On the dot – to Leeds and Manchester following its introduction in London earlier in the year. Matt Rogers, Asos’ Delivery Solutions and Returns Director said it was the latest innovation by the company – which claims to have introduced 200 related delivery improvements around the world in the last year alone. “It is illustrative of our commitment to exploring delivery options that provide convenience and choice for Asos customers,” he said.

Whilst same day is an expectation, it’s next-day delivery that’s becoming the norm – already a standard option for some. For many, the expectations is also that this next day offer will be free although this means it’s an increasingly expensive option for retailers to offer that may not add as much value to the experience as it once did.

COST & CONVENIENCE



Order windows are also narrowing thanks to the customers’ increasing urgency for goods with cut offs of midnight for retailers such as Next [IRDX RNXT] with delivery to either local store or home promised for the next day. In November, Planet Organic revealed that it too was offering on-demand same-day delivery – with one-hour time slots. Its cut-off order windows are very tight with a 6.30pm cut off for delivery by 10pm on weekdays and 4.30pm for 8pm deliveries at the weekends through a partnership with courier Street Stream.

Additional retailers are also likely to follow the subscription delivery model in 2018 – tying their customers in and trying to boost conversion through a fixed price model that allows customers unlimited delivery and increases loyalty and spend as a by-product. At Next, the service costs £20 a year for unlimited, standard next-day home delivery. The MetaPack research report suggested that nearly a third (31%) of shoppers would pay a monthly fee to get unlimited next-day deliveries and more than half would prioritise one retailer over another if they offered some sort of delivery loyalty programme.

The cost of delivery is another key factor for 2018 as both retailers and their customers realise the challenge of providing the sorts of services customers are after at prices that are sustainable for their businesses. For many, the subsidising of delivery costs will diminish – likely covered by a wider range of premium services for customers willing to pay for additional speed and convenience.

EVEN FASTER?



Offering a suite of delivery options is one of the best ways to meet all of a customers’ needs as well as covering as many bases as a retailer can from a delivery expectation point of view. Whilst market leaders offer a range of options it’s something that many other retailers fail to do. Technology is allowing for more precise delivery options – from half day windows to one-hour windows, such as those offered by Asos, that allow for better certainty around delivery. This is something that customers are increasingly willing to pay a premium for rather than the all-day window often offered with the free delivery option.

The Sorted survey suggested that nearly a third (32%) of UK shoppers wanted ultra express delivery services of two hours or under. A number of retailers are already starting to charge for such services and customers are accepting that they need to pay for them if they want them. In the Sorted survey, more than half (57%) of customers said they were prepared to pay for delivery if they needed an item quickly and this is trend also set to boom in 2018. However, in a survey of 240 of the UK’s top ecommerce sites by ecommerce and digital agency Visualsoft in December, 17% of retailers weren’t offering a premium delivery option.

"Retailers are likely to be under increasing pressure from demanding customers to offer a same-day delivery service"


Delivery expectations will continue to change in 2018 too. The advent of tracking information has revolutionised the delivery experience and cut the number of failed deliveries, but retailers still face a tough challenge in the amount of information they give to customers. Expectations mean that customers want more precise detail than ever. A simple – your order will arrive today – is no longer good enough. New or previously niche services are also likely to gain in popularity in 2018. The MetaPack survey revealed that the try-before-you-buy concept is growing in appeal amongst shoppers with more than half (57%) of those surveyed saying that they would use such a service. Asos launched such an offer in November, partnering with Klarna and its Pay Later service which allows its customers to pay only for the things they keep and returning those that they don’t.

Whilst technology is improving the delivery experience it’s also introducing the potential for new delivery options. We have seen trials of delivery to car boot and even delivery to home when shoppers are out in the past year – the most recent example being the launch of Amazon Key – an in-home delivery service launched in the US in November. It’s exciting to speculate as to what 2018 may bring in this space too. New methods of delivery are emerging with trials of autonomous delivery vehicles and early pilots of drones continuing in 2017 and likely to gain further traction in 2018. Amazon even revealed the option for an airborne fulfilment centre last year with the unearthing of a patent for an airship option that would allow drones to fulfil from it.

The Amazon example sounds far-fetched perhaps, but the truth is that things are changing fast. New models and new methods of delivery are emerging all the time coupled with an increasing use of more standard delivery options – such as click and collect – that means failed deliveries are likely to continue to fall in 2018 and the customer experience improve. It really is set to be an exciting year for delivery.
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