Analysis

Opinion: Why 2017 will see delivery become a more important part of the customer journey

Patrick Gallagher2017 will see delivery become a more important part of the customer journey, explains Patrick Gallagher, CEO, On the dot. 

2017 is certainly set to be an exciting year for retailers. 2016’s peak season may barely be over, but it’s already proved that online retail is still changing the purchasing landscape.

With this comes a golden opportunity for retailers to better leverage fulfilment in the customer journey. Those who get it right will reap the rewards and for those who don’t, the repercussions could be disastrous.

Looking back over the last year, we’ve seen online shopping continue to grow while footfall declines. IMRG estimates that online sales on the most recent Black Friday reached £1.2bn – up 12.2% on 2015 – with consumers spending £6.45bn in the peak Black Friday week of 21st to 28th November.

Meanwhile, according to the BRC-Springboard Footfall and Vacancies Monitor, in-store shopping saw an accelerated decline in footfall across November, despite widespread price slashing for Black Friday. There’s no sign of any overall fall in spend, but where and how it’s being spent is changing.

Bricks and mortar stores undoubtedly still have an important part to play in the coming year – especially for those willing to make brave changes in the way they use these physical stores. But it’s clear that an omnichannel approach that offers customers the chance to shop when and where they like will no longer be just a “nice to have”. It’s essential for survival.

Hand in hand with this increase in online shopping comes a reduction in face-to-face interaction between customer and retail brand. In fact, this is likely to be as little as a few seconds when packages are delivered (or collected for returns). This makes the critical moment of delivery a vital link in the chain which retailers can and should use to their advantage. It may be the only time one person stands in front of another over the purchasing journey.

Of course, it’s right that the shopping process becomes as streamlined and straightforward as possible; the reason ecommerce is booming is because consumers can shop on their own terms. But the process doesn’t just end once customers have checked out. The final stage, leading up to and including the moment customers receive what they’ve ordered, has a significant impact on the brand.

Convenient online shopping also demands convenient fulfilment, and with so many brands exploiting this for competitive advantage, we can also expect to see more of this in 2017. Our research has shown that customers will pay up to six times more for a convenient delivery option. They also want to be kept informed and, quite rightly, expect a level of professionalism. We’ve also found that 80% of customers value the assurance that comes with package tracking, so much so that it has a clear impact on whether they will (or won’t) choose convenient delivery again.

But there are other factors in play, too. More than three-quarters of customers say that if a professional courier delivers their first order, they are more likely to pay for a second delivery. Getting this delivery moment right really matters. Smart brands have known this, witness the careful packaging provided by Selfridges or Mr Porter; delivery transformed into a moment of delight and anticipation. Innovative retailers will continue to find new ways to exploit this practical and transactional moment into one of excitement.

Though it may sound daunting, the impact of 2017’s increased focus on online sales will put even more focus on ensuring that delivery options not only satisfy convenience needs, but also provide positive interactions with brands.

Retailers will need to ensure that they get this part of their service right to build loyalty and repeat customer purchases. For online brands, this means finding the right trusted partner that can offer the breadth and depth of fulfilment services that are right for their customers. It’s an exciting time of innovation in this area, but the bottom line is that customers will no longer wait for an inconvenient or slow delivery.

This may sound tough in a year when costs for retailers are expected to rise and when we may see a squeeze on consumer spending. But getting all this right is an investment worth making. Success will be determined by those retailers who capitalise on face-to-face touchpoints with their customers and truly put convenience at heart.

Patrick Gallagher is CEO of On the dot. 

Image credit: Fotolia and On the dot