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IRUK Top500 Strategy and Innovation Report: 2018

IRUK Top500 Strategy and Innovation Report: 2018

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Above standard fulfilment

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The right price and the right speed are critical when it comes to operations and logistics

TO WHAT STANDARD are retailers currently delivering orders to consumers in the European Economic Area (EEA) and Switzerland? How sophisticated are their returns policies? Do they offer click-and-collect services? The answers to these questions underpin this IREU Operations and Logistics Performance Dimension.

The market leaders in this Dimension deliver quickly and efficiently, at a time that will suit the customer. They do this either for free, with a minimum purchase, or at a competitive rate. Most offer a click-and-collect service. These retailers accept returns across channels. While some refund the cost of returns quickly, others take up to 20 days.

It’s notable that grocers dominate the top of this ranking. InternetRetailing senior researcher Martin Shaw sees a number of factors at play. “Supermarkets, partly due to size and partly due to the necessities brought about by the fresh produce they sell, dominate the ranks of the most-capable companies in this Dimension,” he says. The need to deliver fresh food quickly has probably driven this level of service, as has the highly competitive nature of the UK grocery market.

Standout UK performance

UK traders take three of the top five places in this ranking – and 49 in the top 100. It seems that when it comes to operations and logistics, leading in this most mature ecommerce market in the EEA is key to leading in Europe.

Standout companies also include Interflora . The UK-based florist punches well above its weight in this Dimension, with a service that crosses the continent and provides a fast and efficient, yet still personal, service.

“Elite performers such as Interflora are setting the standards in the minds of customers that the rest of the industry must match,” says Shaw.


What do the Top500 do?

Across the IREU Top500, it’s notable that retailers’ own delivery services vary greatly from country to country. Of the traders that sell both in the UK and Germany, two-thirds offer both more choice and a faster and cheaper service in the UK. Indeed, UK retailers offer the widest average choice of delivery options – an average of 2.64 choices – followed by France, Spain, the Czech Republic and Norway.

Nonetheless, retailers in Germany offer the fastest standard delivery service, at an average of close to four days. Traders from the Netherlands were the only others to get close to matching this speed of delivery.

Standard delivery is slower in Norway, Denmark, Lithuania and Latvia (although fewer than 30 of the Top500 retailers operate in these last two markets). The average delivery time across these four markets was 12% slower than in the UK, where the average time promised for standard delivery is 4.8 days. Ireland matched Norway and Denmark for their low cost of delivery.

Germany is the most competitive market for returns, with most retailers operating in this market offering pre-paid returns, followed by Austria, the Netherlands and Sweden. German traders also charged the lowest fee for returns – along with Luxembourg, Finland and Ireland. Customers have more time to change their minds in the Nordics: in Sweden, Norway, Finland and Denmark, the average retailer will accept returns after more than one month.

The uptake of collection services varies widely across the continent. Two-thirds (66%) of retailers offer collection in Germany. By contrast, 44% of those operating in Poland, the Czech Republic, Hungary and Romania offer the service.

Leading by example

Individual retailers that stand out in this field include Apple, with a service for both deliveries and returns that is unparalleled. The technology retailer delivers fast and for free in seven EEA countries, where customers can also specify the date and time their product arrives. Next-day delivery is free to customers spending more than €40 – or the local equivalent where currencies vary. In those countries where Apple offers free deliveries, buyers can return goods to the store within 14 days, or schedule free third-party collection. Refunds are issued within five to seven days of the company receiving the product at the warehouse.

UK supermarkets Sainsbury’s and Asda both offer outstanding services that begin by promising a next-day one-hour delivery slot, starting at £4 at Sainsbury’s and £3.50 at Asda. Sainsbury’s requires a relatively modest minimum basket value (£25) to qualify for home delivery, while shoppers at Asda must spend £40. Sainsbury’s also has a more generous returns policy: shoppers can return products within 30 days for a refund within 10 days – faster than Asda by 10 days. Asda scores well for a wide range of collection points, which include the store, lockers within the store, and petrol stations. Next-day click and collect is free.

Tesco’s presence not only covers the UK but also extends to Poland, the Czech Republic, Hungary, the Republic of Ireland and Slovakia. Tesco differentiates itself from other grocery retailers because it doesn’t specify a minimum spend in order to schedule home delivery in any of these countries. Its delivery services are the same in all the markets that it serves, with click and collect available in six countries, along with nominated day/time delivery. In some countries, such as the UK and Poland, Tesco additionally offers a wide range of alternate pick-up locations.

Carrefour is a major retailer in France, Italy and Belgium, and also sells online via dedicated ecommerce websites in Poland, Romania, Greece and Spain. But it’s only in Italy that Carrefour’s delivery service really stands out. Here, customers can pick up their shopping from a number of store locations as quickly as one hour after placing an order – and they can do so for free.

They can also pay by cash on delivery, while home delivery is free for those shoppers spending more than €70. For those spending less, the standard delivery cost is €4.99 – with same-day home delivery an option.
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