The prevailing provision of next-day delivery is putting the retail logistics sector under unsustainable pressure, and for no good reason, warns the boss of an employment services business.
Following on from last month’s warning from the UKWA that London’s food and drink supply chain is being let down by the capital’s transport infrastructure, Gary Benardout, co-founder of HGV Training, claims existing pressures on the sector are being compounded by offering a service that is not central to the demands of shoppers in 2016.
Next-day delivery remains the most commonly offered option by UK retailers, a fact borne out by the 2016 InternetRetailing UK Top500 (IRUK Top500) report, which found it to be offered by 63% of retailers.
But according to Bernadout, in a poll of 2,010 shoppers, only 4% said next-day delivery was important when compared with price (67%), free delivery (57%), and a good returns policy (26%).
“With the UK needing 50,000 new drivers in the next four years, the increasing availability of faster delivery options could mean that retailers are unable to cope,” he said. “But while most people wouldn’t say no to next-day delivery if it was offered, our research actually shows that it’s not a persuasive factor for the vast majority.”
He continued: “The driver shortage is well publicised but a viable solution is yet to materialise. If something isn’t done, retailers large and small may find that they have over-promised and under delivered, leaving them unable to fulfill orders promptly.”
Bernadout’s words of caution echo the convenience-trumps-speed argument, which was also picked up in the IRUK Top500, where 44% of UK retailers were found to now offer nominated Saturday delivery. A growing number of shoppers want delivery and collection to fit in with them, rather than have next-day as the default; the holy grail of speedy and convenient, whether via something like the Argos Fast Track service, or someone like Shutl, is a small but expanding part of the retail delivery network.
The eDelivery view
At last week’s eDelivery Expo (EDX16) it was impossible to ignore the extent to which delivery/collection and ecommerce retail are cheek-by-jowl with one another, what with EDX16 taking place within the larger InternetRetailing Expo (IRX16). But for all that one was side-by-side with the other, there are still some divides waiting to be bridged.
Generating demand and making it easy for customers to buy from you is, of course, hugely important. All across IRX16 I saw, and spoke to, businesses bringing fresh new ideas to bear on how to do precisely that. Whether payments, or mobile, data analytics or ERP, the business of attracting and retaining repeat customers is thriving. The same energy, vigour and intellectual curiosity needs to come to the fore in retail operations and logistics too.
Next-day delivery has become the new three to five days – it is so standardised, so ubiquitous, that it is hardly given a second thought.
So what, you may be thinking. Well, if your operations are such that offering and supporting next-day delivery works for you, then great … you’ve little to concern yourself with here. Assuming that it’s what your customers really want, and it’s not just what they’ve learned to put up with.
If the people who shop online with you can find the same products elsewhere you know you’re only succeeding because of one – or more – of a handful of factors: price, product, promotion, and place being the four Ps most marketing people concern themselves with here. Place, however, in an online world takes on a different meaning. I don’t care whether you have an item in stock in a store or in a DC, or in 10 DCs, as long as I can buy it and have it delivered.
But I do care – or at least I will start to care – if your range of delivery defaults grow to look old and inflexible, and won’t fit in with my needs. Then I’ll look for alternatives.
Of course, if getting products to people on a next-day basis is causing you pain, you’ve even more reasons to stop and think. If you are offering next-day as your default, when was the last time you checked why that is? Convenience can be all about spreading the load, and giving customers a service they feel fits in with them. The more that can be done to break down any remaining silos to ensure customers coming in through the front door (whether real or virtual) are getting the final mile experience they really want, the better.