Fashion for fast delivery threatens customer satisfaction
Birmingham, UK, Tuesday, 1st May 2018 – Retailers must focus on what customers want, as opposed to keeping up with the trends of same-day and next-day delivery.
This was the takeaway from the “Logistics is the new retail” session at this year’s Multimodal event in Birmingham, during which Spiral4’s Owner and Managing Director, Andrew Starkey stated, “delivery does drive retail”.
“What we are finding is retailers offering next-day delivery when their consumers aren’t asking for it,” said Starkey.
“They do it for a competitive edge, but what consumers really want is knowledge – they want to know where their goods are and when they will arrive.”
Last March, 6% of all attempted deliveries failed, but in the past 12 months that percentage has risen to 13%, or 14.2m packages.
Starkey blamed this increase on the big shift towards providing next-day deliveries – although he noted that bad weather had also played its part.
“My main concern though is this shift towards next day is not sustainable; 45% of consumers abandon the check-out process if they are not happy with the delivery options,” he added.
“And 50% are influenced by reviews of delivery services left on social media, so rather than offering services consumers don’t want, [retailers] need to ask them what they want.”
Head of Operations at John Lewis, John Munnelly FCILT, said that in the last decade distribution has gone from a “necessary evil” to the “lifeblood” of the retailer’s business.
Munnelly agreed that the advent of same day and next-day delivery was something of a fashion.
“It’s something you need to be seen to be offering if you wish to stay fashionable, but we are seeing a big growth in click and collect,” Munnelly continued.
“Around 50% of our e-commerce is click and collect, with 70% going through Waitrose stores and 30% through John Lewis, but we have also seen a surge in next-day deliveries.”
Approximately 70% of John Lewis e-commerce that is not delivered by click and collect goes next day, compared with some 20% a decade ago.
This change has had a knock-on impact on the UK warehousing sector, with logistics consultant Lynn Parnell – Founder of Logistics Partners – noting that 20% of the logistics market is now taken up by e-commerce for omni-channel.
“This has led to a change in the way warehouse operators consider their staff, with a shift towards a more permanent workforce,” said Parnell.
“Previously having a qualified staff was not a major consideration – it would fall around 50th on a list – but now it has become more urgent and would be in a top 10 of considerations.”
However, with the rise of more and more promotional peaks – Black Friday and Cyber Monday for example – the ability to meet demand with a qualified staff is becoming harder.
Parnell said that on these promotional days, people would be expected to work overtime, and there would also be a need to supplement this with extra labour – but Starkey pointed to challenges.
“The big problem with transient labour is that unless aided by technology, they cannot be as efficient as the guy that’s there every day,” said Starkey.
“But technology can be used here, and it can improve productivity.”
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John Munnelly, Head of Operations at John Lewis, addresses delegates during the “Logistics is the new retail” panel on day one of Multimodal 2018, which was part of the United Kingdom Warehousing Association sessions at the free-to-attend show, at the Birmingham NEC.
About Multimodal 2018
Multimodal is the UK and Ireland’s leading freight transport and logistics exhibition, which also features a series of topical seminars and master classes, and hosts a Shippers’ Village, giving freight buyers a private space to meet logistics suppliers.
The supply chain show, in its 11th year, is free-to-attend and Multimodal 2018 is currently taking place at the Birmingham NEC from 1st – 3rd May 2018.
Multimodal 2017 was the biggest in the show’s history, with over 345 exhibitors and a record-breaking attendance of 9,449 supply chain executives.
The FTA Multimodal Awards Night takes place tonight, 1st May, at the VOX at Resorts World at the NEC.
The Awards recognise excellence in air, road, rail, maritime, and freight forwarding services and are voted for by the thousands of readers of the Multimodal newsletter, as well as FTA members, and exhibitors at Multimodal.
For more information visit www.multimodal.org.uk