Analysis

Opinion: What delivery innovations are we likely to see in 2017?

Retailers will continue to improve their fulfilment propositions as one of their main levers to influence sales growth in 2017 but what are we likely to see adopted by the mass market this year? Joanna Perry, head of marketing at Practicology, looks into her crystal ball to find out.

Not all retailers believe that the fulfilment options offered allow them to create true competitive differentiation. But what’s certainly true is that there are few UK retailers who want to get left behind the curve of what the majority of the industry offers.

Those that do think that they can differentiate – and are prepared to be the early adopters of new services carriers are developing – tend to pull the rest of the market with them relatively quickly. Think about the number of retailers who have pushed their order cut-off point later, added time-slot deliveries, weekend deliveries or international deliveries to their proposition.Whether retailers believe offering such services truly drives customer loyalty, or whether delivery offers and convenience are necessary even to attract disloyal shoppers, it’s clear that delivery innovation will continue. But what are the developments that are likely to see adoption by the mass market in 2017.

Whether retailers believe offering such services truly drives customer loyalty, or whether delivery offers and convenience are necessary even to attract disloyal shoppers, it’s clear that delivery innovation will continue. But what are the developments that are likely to see adoption by the mass market in 2017.

Addressing hyperconvenience

Busy lifestyles of UK consumers mean that they favour convenience. Retailers have responded to this with free next-day delivery to store. As a consumer, if you want certainty of being able to get an item quickly without having to wait in for next-day delivery then this has been your best bet.

But the levels of convenience seen in online food retailing (such as Ocado’s bookable hour-long delivery slots) are beginning to be adopted by non-food retailers too.

In innovation research Practicology carried out in mid 2016, New Look’s ecommerce director Sally Heath predicted that more fashion retailers would introduce hour delivery slots, a move her business went on to announce in late August.

Since then New Look has also announced a Delivery Pass for £9.99 that provides unlimited free delivery and click-and-collect services. This delivery pass idea is likely to continue to be adopted, particularly as UK retailers try to compete against the might of Amazon and its value-adding and loyalty-promoting Prime offer.

Another way that consumers expectations around the last mile are changing is from disrupting businesses in other sectors – such as Deliveroo and Uber. And this has attracted the attention of early adopter retailers. Amazon is already said to have already begun hiring “amateur” drivers to deliver to homes from its distribution centres in their spare time.

Others, who may not want to manage such operations themselves could partner with businesses such as Uber – as well as more traditional final mile fulfilment providers – to create new home delivery options.

UK retailers are already competitive when it comes to international delivery costs and timeframes. And when we’ve spoken to UK retailers they do not, in general, believe that their international customers require enhancements such as timed delivery slots or same-day delivery. Instead, innovation in the proposition is likely to focus on returns.

For example, our 2016 benchmarks show that UK retailers on average charge less than $10 for delivery to Australia and delivery in eight days or less. However, we noticed that 16% of UK retailers now offer ParcelPoint as a returns option in Australia (it’s an Australian version of the UK’s Collect+ service).

As competition for Australian customers continues to grow (with both domestic retailers upping their game and more UK retailers creating dedicated Australian sites) it’s likely that there will be more focus on making returns more convenient in this market.

It’s no surprise that fulfilment and returns propositions will continue to be an evolving aspect of ecommerce in 2017. However, it’s notable that that in the majority of cases these developments will require retailers to work closely with third parties to meet consumer demands.

Joanna Perry is head of marketing at Practicology


Image credit: Practicology and Fotolia

One thought on “Opinion: What delivery innovations are we likely to see in 2017?

  1. Mark Pigou said:

    Nice article Joannna.

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