Next LEADS THE Operations & Logistics Performance Dimension for its promise of timely and convenient services that stand out across delivery, returns and collections. The fashion and homeware retailer has built up its position in ecommerce and multichannel delivery over years – its industry-leading midnight cut-off for shoppers ordering for next-day pick-up from store or home delivery helped it to top the IRUK Top500 collection analysis.
Its delivery promise includes evening and same-day delivery, while returns are free, flexible, and its 28-day returns period is very competitive. These are promises that make financial sense for the business. In its results for the year to January 2015, it said 9% of orders were placed between 10pm and midnight, while using stores to accept returns boosted its profitability. More recently, it has found that it needs to improve its delivery services still further as it looks to maintain its lead in its markets. That’s because growth in its predominantly online directory business has slowed, as it explained in its latest full-year results.
“Partly this is as a result of competitors catching up with our delivery and warehousing capabilities; partly as a result of changes in the ways customers are shopping online,” it noted in the results. “It provides us with the opportunity to improve the business going forward.”
The retailer went on to set out its plans to broaden its offer further. Its strategies follow the way its customers behave. Next has watched customer behaviour over the last five years. Its data tells it that while, in 2010, 87% of orders were delivered to the home, by 2015, 45% went to the home and the rest to stores. Accordingly, it started to offer collections and returns through third-party parcels shops from September 2016, and will have two-hour slots for home deliveries by Christmas.
Next is also looking to improve its delivery service in the international markets where it is focusing for new growth. In 2015, it opened distribution hubs in Russia and China, where delivery times have been reduced by more than six days to, in most cases, three days. In Germany its new hub enables it to offer next-day delivery more cost-effectively. The focus now will be on improving operations at its existing hubs, including expanding the territorial reach of that in Germany.
