Analysis

Opinion: How retailers can keep on scoring even when the delivery goalposts are moved

There are many external forces, such as government legislation, that will have an impact on the delivery landscape, so how can you minimise their potential effects, asks Niklas Hedin, CEO of Centiro. 

In the modern office, the door buzzer commonly signals the arrival of a package, rather than somebody showing up for a meeting. Consumers are clamouring for convenience, and they expect this with deliveries too, swapping home delivery for at-desk deliveries.

However, this practice has come under fire from London Councillor Val Shawcross, who says delivery vans account for around a fifth of London’s traffic. She has been campaigning for an increase of click and collect services and locker-style units at transport hubs to reduce congestion.

The changes proposed by the London Councillor could prove a potential game-changer, requiring a complete overhaul of retailers’ current delivery strategies. In order to prosper (or just survive) in this competitive environment, retailers must be able to remain fluid, while also making sure they do not lose sight of customer needs.

So how can retailers ensure market developments will not have a detrimental effect on their delivery function? Here are two key areas they must focus on:

1) Lay solid foundations for visibility and agility

In the current, hugely competitive market, it is essential that retailers take a dynamic, proactive approach to deliveries to win and keep customers. Unsurprisingly, companies that do this very well (such as Amazon) are consumer favourites. Their rivals are starting to catch on as well: ASOS now offers delivery to more than 6,000 local shops.

But to make such practices possible, retailers need a fit-for-purpose system keeping track of exactly what is happening with each individual delivery, to ensure decisions can be made in real time and reduce delayed deliveries. To achieve this, they must focus on:

Ensuring complete visibility over the status of fulfilment options

As retailers gain and process an increasing amount of supply chain data, it should become clearer where efficiencies can be made. For example, by having a deeper understanding of where inventory resides, and delivery option flexibility, retailers should be able to drive profits by cutting out inefficiencies in deliveries. For instance, in some cases it may end up being much more efficient to deliver a particular item from a nearby store as opposed to a centralised distribution centre. This will change and evolve the supply-chain architecture, balancing size, scale and efficiency with fluency and agility.

Being able to quickly onboard new carriers and delivery options

It is vital that as new delivery options become available, retailers are quick to take advantage of them. Consumers demand a fluent and convenient experience these days, with options to choose from. Traditionally, this has been found challenging due to technology constraints, but if a retailer is left unable to offer the latest delivery must-have for even a few months, their rivals may steam ahead, having a profound effect on their business. The importance of this issue to the consumer is proven by JDA/Centiro research, which states that almost half (46%) of UK online shoppers chose to shop with a retailer offering multiple options for delivery, rather than with one with just a single option. Cloud platforms enable retailers to get their delivery networks, at home and internationally, up and running in a matter of weeks, while at the same time giving visibility and control over performance and cost.

2) Ensure that the customer comes first

Across all sectors, businesses are currently scrambling to become more customer-centric. From Virgin Trains offering real-time, on-board customer assistance via Twitter, to banks extending opening hours and even opening on Bank Holidays, customer experience continues to become a key battleground. The fact that many businesses now have a CXO on their books is testament to that. However, with huge amounts of change occurring across the business landscape being driven by advances in technology, it is easy to lose sight of this.

What does this mean for retailers, and their deliveries? It’s simple: overlooking customer needs could prove fatal, as people have an insatiable hunger for choice and convenience. They must also ensure promises aren’t broken – this is equally critical to loyalty and making sure customers keep coming back for more. Experience is the new currency, equally important as product.

To achieve this in practice, the ability to segment your customer base – for example, by basket size, loyalty, and the return service type – could prove crucial. This helps identify customers that prefer certain location options, or specific delivery times. Retailers can then get to work creating a bespoke customer experience, perhaps by offering drop-off at specific collection points. But having after-hours, time-sensitive options also means that carriers and brands will start working together in a much more collaborative way, winning customer favour.

3) Seize ownership of deliveries

With these two areas taken care of, retailers should have the solid foundations required to operate a successful delivery service and widen the target, regardless of wider market conditions. This can drive success by allowing retailers to seize ownership of every piece of the puzzle. In ecommerce, that means owning the customer journey and the brands delivery promise. For customer service, this means you can proactively own customer interaction. And with transportation, they must own fulfillment, be accountable for the customer promise and the customer desire for the most convenient delivery option.

Regardless of how change gets initiated – be it by customer demands, policy changes or pure evolution – events will happen that challenge and change the delivery landscape. The key to feeling the minimal impact of these changes and achieving prolonged success is putting yourself into a position where you have full visibility of your supply chain performance, are agile enough to react in a timely fashion, and most importantly, ensuring the customer is put first, so that they can get exactly what they desire. If you don’t see the problem, then that’s a problem in itself.

Niklas Hedin, CEO of Centiro

Image credit: Fotolia

 

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