Dynamic Delivery: Changing the Rules of Retail

By Benady, David | Marketing, September 1, 2013 | Go to article overview

Dynamic Delivery: Changing the Rules of Retail


Benady, David, Marketing


Consumers now expect brands to be 'always-on', making delivery a key marketing issue, writes David Benady.

Delivery has been through many twists and turns since ecommerce exploded onto the retail scene more than a decade ago.

There's been free, discounted and next-day delivery, free returns, click-and-collect from local stores and the current trend of offering free delivery above a certain value. There have been customer complaints, threats of legal action on the part of delivery firms, and videos on YouTube recording the vain attempts of delivery men and women across the UK to deliver parcels in trying circumstances.

Delivery is a vital component in online retailers' efforts to differentiate their brands in an overcrowded market. Nonetheless, a price war on costs is starving the delivery network of investment and undermining retailers' attempts to make it faster and easier. Another outcome of the downward pressure on delivery prices is to train shoppers to view delivery as an add-on, rather than as a core part of ecommerce.

Much of the success of ASOS.com, the rapidly expanding online fashion retailer, is down to its free delivery and returns policy, which has encouraged a generation of young people to try on clothes at home - or at work - in the knowledge that they can send back items they don't need at no cost and simply order more.

High priority

ASOS head of delivery Matt Rogers explains the importance of delivery to the brand's success. 'If a customer receives a negative experience of delivery, they are less likely to shop with us again,' he says 'Customers place equal value on ASOS offering the best product at the best price as they do with on-time deliveries and being kept up to date with the progress of their orders.'

Frenetic competition between online retailers means that shoppers are being trained to expect ever greater convenience coupled with lower prices and increasing speed of delivery. Simply waiting in at home for the goods to arrive is no longer good enough.

'Home delivery is becoming less convenient to customers and we are constantly working on new ideas for delivery, such as collection from local stores or diverting deliveries to neighbours,' says Rogers.

He confirms that speed is of the essence in fashion, where part of the shopping experience is the thrill of instant gratification.

'Next-day delivery is very important - 40% of our UK customers opt for it, and we are working to launch it to some of our European markets,' he says. ASOS offers unlimited next-day delivery for a year for pounds 9.95. This fee for 'VIP' membership also gives customers early access to sales, exclusive sales and 10 copies of the brand's magazine a year.

However, some fear that rivalry between retailers keen to cement their brand position risks creating a race to the bottom, which could undermine the significant levels of investment needed to ensure an effective delivery network.

Several retailers and delivery services have been berated for poor service; Yodel, which is owned by the Barclay brothers, who also own Littlewoods and Telegraph Media Group, has been a particular focus of customer anger via social platforms, and Amazon, which uses it to fulfil some deliveries, has been swamped with complaints about it. Indeed, there are many amusing videos on YouTube allegedly showing Yodel workers struggling to deliver goods. The company, which also handles parcels for other retailers, such as Currys and Boots, told Twitter to delete tweets and accounts it said were defamatory and 'constitute a serious libel'.

Yodel is the UK's second-biggest parcel-delivery service after Royal Mail, with 17% market share, distributing 150m parcels a year. However, it is thought to have lost contracts with both John Lewis and Mothercare after failing to hit targets for online- shopping deliveries. Yodel refused to comment on this. …

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