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You pay your money and you take your choice (IRM53)

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Giving customers choice through delivery leads to multiple options for delivery and collection. Sean Fleming looks at what it means for retailers and carriers to deliver this choice.

Choice, as we are all well aware, is important. You probably learned this earlier in life than you realise, especially if you were ever given a Cadbury’s Selection Box at Christmas when you were young.

If, like me, you were a child in the days before Glasnost and the fall of the Berlin Wall, you’ll be aware that, just a few hundred miles to the east, there was a foil to the growth of consumerism and choice we were experiencing. Unlike their neighbours in West Germany, who could choose between VW, BMW, NSU (the forerunner to Audi), and countless other non-German car makers, the citizens of East Germany chiefly drove Trabants or Wartburgs. That, comrade, was as much choice as it was decided you would need.

Buying a car in 2015 is one of those things that brings you up close and personal with the concept of too much choice. Do you want a saloon, an estate, a hatchback? Diesel, petrol, or hybrid engine? How about climate control, or sat-nav? What size wheels? Do you want the comfort pack, the storage pack, xenon lights, run-flat tyres, heated seats… the list really does go on and on.

No one in their right minds would try to convince you that adopting the command economy approach to choice would be a good thing. Equally, you won’t find many people disagreeing that there is such a thing as too much choice. If you offer an eye-watering array of choices, especially in ecommerce deliveries, you’d better be able to make good on the promise you make to your customers.

 

BY THE NUMBERS

Not so many years ago, when you bought something via mail order – and this persisted into the early days of ecommerce – the phrase ‘30 days, post and packing’ told you everything you needed to know. It was just about as good as it got in terms of delivery.

You’re unlikely to build a successful online business in the 21st Century based on terms like that. Choice is no longer just important, it’s mandatory. However, how much choice, and what kind of choice, is harder to pin down.

Amazon currently offers eight separate delivery options for shipping within the UK: free super-saver, first class, one-day, two-day, express, evening, expedited, and scheduled. There’s also a range of collection options including Collect+, Doddle, Pass My Parcel, and Royal Mail Local Collect.

The footwear chain Schuh is synonymous with great delivery options, in particular because of the way it uses its network of stores. It also offers Shutl – which is now owned by eBay – to offer super-fast same-day delivery. For Schuh shoppers this boils down to just four options for delivery (one of which is free) and three for collection.

That’s not to say Amazon is doing it wrong, but it serves as one example of how great choice is as much about making things work as it is about providing a menu with lots of items on it.

 

LEARNING FROM OTHERS

Once you go through the process of deciding how many different delivery and collection options you will present shoppers with, you have to be certain you can actually execute on them.

By examining what happens during the annual peak period, you can begin to see how a chain operates under duress – how it copes, how it prevails or fails. Taking those insights and applying them to your year-round operations will enable to you to map out an infrastructure that can flexibly accommodate both high peaks and more choice; the ability to do both is rooted in many of the same capabilities.

Consider last year’s Black Friday, which was preceded by a drop in sales, as shoppers geared themselves up for a frenzy of discount shopping. That translated to a drop in parcel volumes, which caught out many of the carriers, which then found themselves overwhelmed in the aftermath of cyber weekend.

Neil Ashworth, CEO of nationwide collection chain Collect+, sees this as a great learning opportunity. “That drop in volume was a sign and if we’d been able to read it properly we’d have seen there was something going on.

“Then, of course, volumes took off in an unprecedented manner. For example, Yodel had an extra 600,000 parcels over the course of cyber weekend. They’d have needed an extra 5,000 staff to clear that volume in the usual timeframe.

“Retailers’ marketing teams will have decided what deals they were going to run. They will have talked to their supply chain colleagues, who will have increased stock depth of key items. There might have been conversations with the distribution teams but that information won’t automatically have been passed on to the carriers. As a consequence you have to wonder if the right plans were put in place – I don’t think they were.”

Ashworth’s view of cyber weekend 2014 can be regarded almost as a microcosm of what ought to happen all year round.

You want to offer customers the delivery – or collection – option they want. After all, it’s a great way to engender loyalty and keep people coming back time and again. However, you can only make it work if each link in your supply chain is fully appraised of what’s required, is sufficiently resourced in order to do it, and is never left hanging in the breeze in the event that something starts to go wrong.

But it doesn’t stop there.

 

KEEP LOOKING OVER YOUR SHOULDER

Consider if you will the clothing chain Reiss, which by and large ignored Black Friday last year. It still, according to some, saw a 30% uplift in sales. Why? Because customers were out there looking for deals.

So it’s no longer just your supply chain you’ve got to worry about, but everyone else’s too. Because despite the almost infinite capacity for orders to be placed online, ultimately there is a very finite number of warehouses, boxes, people, vans and roads that all those orders then have to be funnelled down. Your ability to keep your promise to the customer could be compromised by someone else’s flash sale. You have to have full visibility of your supply chain in order to know if you might be heading for trouble.

You’re probably going to need some sort of big red ‘stop’ button, too. Better yet, an automatically triggered alert that allows your back end to tell your front end when it is starting to creak. Why would you continue to offer shoppers same-day or next-day delivery if your warehouse is empty, or your carrier doesn’t have enough people to pick, pack and deliver things?

According to Becky Clarke, CEO of NetDespatch – a data company that manages end-to-end fulfilment processing operations for several well-known retailers and carriers – it’s the retailers that are the key to getting delivery right.

“You strike a deal with your carrier based on certain criteria. Then you have a big promotion that goes really well. What about your carrier? They struggle and it becomes very expensive for them.

“The market is growing really quickly, and that can be a problem; we don’t get a smooth build up anymore in the run-up to Christmas. The twin peaks of Black Friday and Christmas are painful.

“It’s all on the retailer. There’s precious little the carrier can do. They only carry the parcels that the retailer is sending out.”

 

ALL ABOUT VISIBILITY

There’s no getting away from how exposed to marketing messages everyone is. Offers, promotions, you name it, account for a considerable amount of the emails in your inbox – also in your junk and trash folders. There won’t be a time when everyone in retail can relax and stop selling, either. Some estimates for the number of parcels for online-bought goods sent out this year by retailers are upwards of one billion.

Attracting repeat business and engendering customer loyalty will mean providing shoppers with routes to their purchases that fit in with them – no one wants to wait in all day for a delivery. No one ever did, and with the growing number of retailers offering delivery from firms like DPD, with their one-hour slots and text alerts, the prospect of waiting in all day is likely to lead to abandoned baskets.

If you’re not already trying to fit in with your customers’ busy lives you’re already playing catch up. You are going to have to provide not just a better choice when it comes to delivery and collection, but simply a better service. The first mile and the last mile of the whole ecommerce customer journey will need to become more closely integrated. The more integrated your systems are, the more visible your problems will be, and the sooner you can see them, the better equipped you will be to do something about them.
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