SMEs and the logistics sector
Andy Hill is the new Commercial Director at My Parcel Delivery, who use people power to negotiate huge discounts with well known couriers including Hermes, Parcelforce, DPD and City Link and pass them straight on to thousands of satisfied customers. Andy has a wealth of experience in the carrier industry and today shares his thoughts on the direction deliveries are heading:
After two decades in delivery and logistics industry, I’ve seen it go through seismic change for the better, providing retailers with more and more opportunities to attract and retain their customers. But what should we expect from future changes to help e-commerce businesses and SMEs?
As recently as five years ago consumers were given little choice in delivery options; consumers were typically offered a home delivery service based on ‘please allow seven days for delivery and a signature is required’. Once they pressed ‘buy now’, consumers had no control over and no visibility of their order; delivery was an inconvenient experience. But now the industry is evolving into something much more flexible. This generation of online shoppers can choose where and when they want the delivery and get updated about delivery status from retailers and parcel carriers. The process adapts better to their lifestyle.
E-commerce businesses are forever looking for different angles to attract and retain consumers and one of the ways is to offer different delivery options to suit each customer. They have embraced the delivery industry more and there’s a better understanding that the delivery experience can affect their brand. That’s because consumers now have a much stronger voice; they can say what they want and can tell people about the good and bad experiences they’ve had much more publicly (aka social media). Retailers are listening to that. The modern day shopper can be online 24 hours a day yet they are time poor when it comes to having their purchases delivered or collecting them from a store or depot, hence the need to adapt and change how we do this.
So, what are carriers doing to meet the demands of this rapidly evolving e-commerce market?
In short, it’s about developing new technology. In looking at consumer lifestyle, technology is being developed to cater for different needs and to reduce the number of attempted deliveries. Carriers can send a text to the consumer on the day of the delivery informing them of the time slot in which the delivery will be made and this gives the consumer more control over their day.
The next level would be allowing consumers to change the delivery location to a more convenient pick-up point after dispatch to fit in with what they are doing on a particular day. This back door approach to a Click and Collect service would be another way of meeting the expectations of the e-commerce customer and providing them with a more tailor-made, personal service.
In my experience, consumers want two things: choice and consistency.
They want to see retailers offering them choices at the checkout and be able to choose when and where the delivery will be made. That’s why the industry is progressing to create as many options as possible and where retailers and logistics work together to provide the most convenient delivery options.
And consumers want consistency, no matter what delivery option they choose or which carrier company is offering that service. And that’s where the industry still needs to adapt.
If the consumer is not in when the delivery is made, some carriers leave it in a safe location, others leave a card to pick up at the local depot. Either way, the consumer is not in control and the service they get is inconsistent. Consumers want the ability to decide what happens at their door and there might be an argument for agreeing an industry standard about minimum service levels.
Click and Collect
Click and Collect services are a potential answer to this and its popularity is increasing – according to The Telegraph, over a third (35%) of online buyers choose this option at the check-out and this is predicted to rise a further 17% this year.
But Click and Collect delivery in networks such as Collect+ and Hermes Parcel Shops is not a service SMEs are able to offer easily – integrating the service so that it’s visible in the checkout is expensive and parcel carriers that offer it tend to have relationships with larger retailers rather than SMEs. The ability for SME consumers to choose when and where their delivery is made, is therefore restricted.
Using local collection points for consumers will typically incur a delivery charge, whereas collection from a retailers own store estate is usually free of charge, so charging consumers for a more convenient service can be a disincentive to buy. For the growth in Click and Collect to continue I would advocate that delivery charges to local collection points and to high street retailer’s own shops needs to be on a par to make it a truly convenient option for the customer, not the retailer. The industry needs to develop a solution that allows SMEs to offer this service to their consumers and put them on a level playing field with big retailers like John Lewis and Tesco.
This is vital because an e-commerce business with a lack of delivery options is a business where the consumer doesn’t feel in control. Choice is appealing whereas the lack of choice is not.
Top Delivery Tips
We can see where the future of delivery needs to go to help SMEs, but what can SMEs do now to get the most out of logistics for their customers? Here are my top tips:
- Acknowledge that delivery is an important tool that can attract customers and persuade them to return to your site.
- Online tracking technology is available and all retailers should share it with their customers. It keeps the customer updated, they know where their delivery is, a time slot when it is likely to be delivered and you’ll find you’ll get far fewer delivery-related calls.
- And, finally, seek the help of parcel comparison sites. They are a wealth of information and can offer a lot of advice about many different services. They’re in a unique position because they cover the spectrum of delivery services and are there to help you find the best option to suit your needs at that point.
A really good article, Andy – cheers !
The problem I can see is that all these new processes and the new technology that makes them work cost money. But eBay and Amazon have both been pushing “free delivery” hard to the point where customers seem to often be more influenced by the shipping charge than the overall price. All the time this is the case, online sellers will go for the cheapest service they think they can get away with, in order to control costs.
With customers pushing the retailers, and retailers pushing the carriers in turn, we end up with the likes of myHermes and Collect+ where cutting costs to the bone means they have (in my opinion justifiably) poor reputations for reliability, delivery quality and customer service.
Some how, we have to educate buyers that if they are only willing to pay for a Trabant, they shouldn’t demand a Rolls Royce !
I’ve always wondered why courier companies haven’t explored location based pricing (or if they have why it isn’t a more common offering).
By this I mean – I operate out of a Centralish london warehouse. I’d estimate 40-60% of my sales are within the London region (either in London or closeby in the neighbouring commuter towns). From a logistical point of view I would assume it is much cheaper for the courier / parcels company to deliver the goods to these buyers rather than to deliver to say Manchester or Edinburgh.
I’m surprised courier companies don’t offer far cheaper rates for local delivery rather than the common “one size fits all” approach which is so prevalent in the UK.
I suppose this is a technology and competition shortfall (the market has only started to become competitive) – however I would be pleased to see a future where I could allocate my courier based on the location … i.e all mail going to London would go by a courier which specialises in delivering to London and the rest can go by national courier.
When we used Fed Ex – if the parcel was delivered by our local depot and didn’t need to go through the main hub then they charged only £3, which was about £2-£2.50 cheaper than normal. So some have that service, but not sure how many.