Futuristic logistics: retailers focused on rapid delivery

Need for speed

Asos’s new delivery option is the latest example of how technology advancement is improving retailers’ logistics. Ocado has created a Zoom one-hour delivery option in London, Waitrose is testing two-hour delivery, and Argos is reporting healthy take-up of Fast Track, which allows shoppers to order online and collect from a store the same day.

Judging by the discussions at a logistics event in London on 26 February, these services and Ashworth’s comments hit the right note with today’s shoppers.

Delegates at The Delivery Conference, run by e-commerce delivery software company Metapack, heard about the changing face of retail fulfilment. Many retailers are revamping systems, introducing additional services and shifting business models to cater for demand for rapid delivery, as part of wider transformation programmes.

Health and wellness products retailer Holland & Barrett is one such business, with Emma Mead, its group omnichannel director, saying how recent events at her company illustrated the importance of rapid delivery.

When the retailer encountered online payment problems and a conveyor breakage that reduced functionality in its UK distribution centre, concurrently, Mead opted to remove next-day delivery as an option for shoppers and focused on fixing the payments issue.

“The following week we did the analysis on the impact of those issues, I had totally focused on the wrong thing,” she says.

“The conversion rate impact of taking next-day delivery off the site was three times higher than the payment issue problem. My focus was utterly on the wrong point – I never realised how important that next-day delivery service was.”

Further digging unveiled that a significant number of new customers choose next-day delivery, so she acknowledged that removing the service affected customer acquisition as well as overall conversions.

Holland & Barrett is working out the technology investments required to create a single view of stock across its operations, so it can pick from store for click-and-collect orders. It’s something that will allow the business to be even quicker with its fulfilment options, according to Mead, and will help support ambitions to provide same-day delivery too.

“Speed matters – not only on the site, but in terms of the service we’re delivering our customers,” she adds.

“If I look at the new generation, the younger customer, they want things instantly. To attract them, we’re going to need the same-day delivery services on our site.”

Bruce Harryman, senior manager for national distribution network planning at department store chain John Lewis, agreed that customers’ demands are evolving.

During his session at the Metapack event, he remarked: “We have named day and we have timed [delivery] services, so more and more of what we’re doing is time critical.

“We have to look at everything – from the front end all the way right through to the capacity of our click-and-collect locations to make sure we can fit the number of parcels sold into those locations. That’s the level of detail we need to go into.”

Harryman also revealed the average time shoppers spend making online orders on their smartphones is below six seconds. In 2016, this was six minutes and eight seconds.

“They are using 3.2 words on average in a search – that’s going up because they are trying to get to where they want to go quicker and they are employing more filters,” he said.

Sprinkling delivery ‘magic dust’

Mike Richmond, chief commercial officer of parcel collection and returns service Doddle, said he cannot understand why retailers still do not have systems in place to enable click-and-collect order picking from stores.

“If you don’t offer instant click-and-collect then you’re missing the main differentiator you have from online pure-plays,” he said.

Richmond also spoke of the importance of “magic dust” in the delivery process. Be it bike retailer Wiggle’s inclusion of a packet of Haribo with each order, or the fashion magazines accompanying Mr Porter packages, he says it’s crucial to leave shoppers with a positive feeling at the point they receive their item.

On that subject, Holland & Barrett’s Mead suggested retailers include social sharing information in packaging. Reminding customers they can take to Instagram, Facebook or Twitter to reflect on their retail experience can be effective, she said.

“The reason social is so powerful is because it’s addictive,” Mead noted, adding that it makes people feel good and raises the endorphin levels of users.

“If you have the social share button or image in the delivery box, what they’ll do is they will share [information about their experience] and feel better about it. [It should] be significant in sprinkling that magic dust.”

Quick delivery for all

Rapid fulfilment and customer-driven delivery requirements should not solely be the preserve of retail giants, according to On the Dot CEO Santosh Sahu, who believes independents and larger retailers alike need to up their game in this area.

On the Dot, which has helped bring Asos Instant same-day delivery to large cities across the UK, is in talks with independents and wants its technology to help these businesses better utilise their stores. The company has also secured deals to embed its technology at the likes of Bloom and Wild, Currys PC World, L’Occitane, Waitrose, and Wickes.

Quiqup, meanwhile, which recently pivoted from consumer-focused fast food delivery service to become a business-to-business technology supplier, is another provider of technology enabling rapid delivery. There are options available for retailers looking to improve their logistics.

“We’re properly empowered as consumers in terms of what we want to buy, how we want to pay for it, and how we want it delivered,” says Sahu.

“But exactly when it can be delivered is based on the carrier’s optimisation and their business model – this is where we are losing that customer empowerment. Retailers need to change because Amazon Prime enables consumers to deliver products when they want it, within two hours in London, or in a specific time slot.”

Retailers seem aware their customers want speedy delivery, and many of them are adjusting their infrastructure, platforms and internal technology to make it happen.