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IREU Top500 Brand Engagement Dimension Report 2018

IREU Top500 Brand Engagement Dimension Report 2018

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Fulfilment by design

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Fulfilment by design
Fulfilment by design

Polina Modenova uncovers the service offered by IRUK Top500 retailers in delivery, collections and returns

RETAILERS THAT RANK highly in the IRUK Top500 Operations & Logistics Performance Dimension do so thanks to industry-leading delivery, returns and collections services. These services enable them to compete for orders on speed, price and convenience. This is vital in a sector where customers demand a seamless service that enables them to take delivery of products wherever, whenever and however they like. Returns are no less significant to shoppers, who want to be able to change their minds and send back products swiftly and efficiently, no matter how and where they were bought.

Our research in this Dimension focuses on the services that make a difference to shoppers’ lives, either by being cost effective or speedy. We’ve assessed the choice, cost and convenience of the delivery and collection services that IRUK Top500 retailers offer, then measured their efficiency in dealing with returns. As we did last year, we’ve measured the delivery promise, rather than evaluating the service offered in practice, since this seems more likely to inform customers who are considering making a purchase.

"There's room for improvement in same-day delivery - currently offered by just 5% of IRUK retailers" Polina Modenova, InternetRetailing




Delivering the promise

We started by looking at how much choice traders offered and found that, on average, IRUK Top500 retailers offered two to three delivery options.

We looked at the speed and cost of standard delivery, which IRUK Top500 retailers promise in between four and five days, and at an average cost of £4.30. Where retailers require a threshold order value before offering free delivery, that threshold is, on average, £50.

Looking at the convenience and choice, we found that super-speedy same-day delivery is offered by a small but significant minority of retailers, at 27 traders (5%). Nearly two-thirds (314 retailers, 63%) offer next-day delivery. The scope of our research has widened from 2015, when we found that 98 (79%) of the largest IRUK Top500 retailers offered next-day delivery.

Turning to named-day delivery, we found that Saturday delivery is most widely available to shoppers. In total, 219 (44%) of Top500 retailers, offer the service. That’s well ahead of the 73 (15%) that offer Sunday delivery. Buyers can nominate their own specific delivery day when shopping with 96 (19%) of Top500 retailers, while fewer (61, or 12%) offer the option of a nominated delivery time. Leading retailers in this area perform well ahead of these averages.

At the time of research, fashion-to-homewares retailer Next, a Leading company in the IRUK Top500, offered next-day delivery for £3.99 for orders confirmed by midnight. That’s 7% cheaper than the £4.30 average cost of standard delivery across the Top500. At Next, we found that evening delivery costs £4.99 – 16% more expensive than that Top500 standard. Next is one of the 5% that offers same-day delivery.

Grocer Sainsbury’s, also a Leading retailer in the Top500, charges an average £4 for delivery. It is one of the 12% of retailers in the index to enable customers to nominate time and day of delivery and one of 14% of traders to offer Sunday delivery, though at a cost that is more expensive than the average for standard delivery.

Sainsbury’s also offers fixed price peak and off-peak delivery passes, enabling repeat deliveries for a fixed price, though that requires a minimum spend of £25; 18 stores offer same-day delivery.

General merchandise trader Amazon, an Elite retailer in IRUK Top500 research, offers significantly more options than the average for the Top500. Those options include same-evening and Saturday and Sunday delivery. Standard delivery costs an average of £3.37 and the standard delivery order promises to arrive within one to two business days of dispatch. The retailer’s thresholds for free delivery vary but at £10 or more for books and £20 for other items, the average Top500 free delivery threshold of £50 is 60% more expensive than at Amazon. Same-day delivery is available for free to members of Amazon Prime but costs £9.99 for delivery to non-Prime members. Prime members also have one-hour and nominated-day delivery options.

New Look offers free delivery to those spending more than £75. Delivery options include next-day (£2.99, or free over £45 spend), next-day evening, Saturday and Sunday. Nominated day delivery costs £5.99 for a service that enables customers to choose a one-hour slot.

Trade supplies retailer Screwfix, an Elite retailer in IRUK Top500 research, offers next-day delivery as standard and for free on orders of £50. A choice of premium next-day services includes Faster – before 12 noon, Fastest – before 10am, and same-day, which is available within two hours. Delivery is available on Saturday, Sunday and on a nominated day.

Convenient collection

We looked at whether collection is available. Some 285 (57%) of the Top500 offer this service. Last year, 98 (58%) of the largest Top500 retailers offered this. This year’s figure suggests that the service is likely to have been taken up among traders that figure further down our index.

Leading retailers have built creatively on their basic services. Next offers free next-day delivery to store for shoppers who order before midnight. Sainsbury’s offers a next-day collection for a minimum £25 spend, with same-day collection from 18 stores.

Amazon has no UK stores but it offers collection from a range of Amazon Pickup points as quickly as same evening. Pickup point partners include Doddle and the Post Office, while the retailer also operates its own lockers and runs a PassMyParcel service in conjunction with newspaper delivery services.

Standard click and collect from a New Look store takes three-to-five working days, free on orders over £19.99. Next-day collection costs £2.99, free for orders worth more than £45. Third-party collection is available via convenience stores in the Collect+ network and from Doddle stores. Screwfix offers click and collect on the same day as an online order is placed and, indeed, within five minutes.

Right of return

When we analysed IRUK Top500 retailers’ returns services, we looked in particular to see how flexible they are. We found that IRUK Top500 retailers accept returns of goods that were no longer wanted for an average of 27 days after purchase and take an average of nine days to process them.

The most common option for returns is via post, offered by 59% of Top500 retailers. We looked at whether orders made online could be returned in the store and found that 141 retailers offer this. That’s 28% of all the indexed retailers and 41% of the multichannel retailers in that list.

The next most common means of return is via a third-party location, such as Collect+ or Doddle, offered by 116 retailers, or 23% of the index, while 70 (14%) offer returns via pick-up from home.

Next, we looked at the financial side of returns. We found that 60 traders (12%) offer pre-paid return labels. When we asked whether there was a fee associated with returning an item, we found the average charge across IRUK Top500 merchants is under £1. Most traders (320, or 64%) fully refund an item, but not the postage, while just under a quarter (117, or 23%) refund the cost of returning it. Again, leading retailers in this Dimension offer a service that rates well above the average.

Our research found that Next and New

Look give a 28-day return period and Screwfix a 30-day period, while Sainsbury’s offers full refunds on broken products for a year, with a partial refund available after a year if the product is found to be damaged.

Next and Sainsbury’s offer free returns to store. Next fully refunds the cost of delivery and the item when an item is returned by post and also offers free returns via Collect+ and Doddle. Amazon offers a pre-paid returns label, and Screwfix enables customers to return for free from a local Post Office using a returns form. Both retailers offer the option of having returns collected, though Screwfix may charge for this if the returned item is not faulty.

Sainsbury’s promises to take between seven and 10 days to process a refund, while New Look does so in five. That last figure is 44% faster than the Top500 average.

Conclusions

We found that IRUK Top500 retailers offer, on average, a competitive delivery, returns and collections services. There’s room for improvement in same-day delivery – currently offered by just 5% of IRUK retailers – as well as weekend deliveries, especially on a Sunday. Customers want quick delivery and to get their packages when they are at home, during the weekend. Where some stand out as head and shoulders above the rest, others lag well behind the average, providing room for improvement. We expect that services will continue to become ever more competitive as the industry matures further and customers become more demanding in their service requirements.
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