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Tamebay Position Paper:
Delivery

By Dan Wilson August 15, 2018 - 9:00 am

Download or read online

This position paper on Delivery is available as a free download to read offline at your convenience, or carry on reading below.

Delivery

For an ecommerce business, the delivery processes and systems it puts in place are critical to its success, customer satisfaction and profitability. Crucially, it is also be a key area of competition because even when all things are equal, a selection of delivery options, or specifically the one your buyer wants, can be the trigger to a successful sale. And delivery that delights can be the spur to repeat purchases and an ongoing positive commercial relationship.

Despatch, shipping and delivery are also probably the most time-consuming, labour intensive and tedious aspects of your ecommerce enterprise. That is why it is absolutely vital that you approach delivery in an analytical and strategic way to make sure your operation is as effective and efficient as possible

Customers are more demanding than ever

As any online seller knows from everyday experience, customer expectations when it comes to receiving their purchases have become greater than ever before. But with greater expectations have also come an increased sensitivity to shipping costs. A survey of online shoppers in USA, UK, Canada and Australia, showed that 60% of online shoppers expect free shipping. And roughly a quarter won’t buy at all if postage costs are more than $10. (Source: Radial survey, 2018)

And delivery is more than a rational aspect of the online shopping experience. It is also emotional. It’s the first time when a customer comes into contact with the product they have bought. That moment has the potential to be memorable and even joyful. A disappointing delivery experience can ruin an entire transaction.

Marketplaces demand more too

It’s not just your customers who judge you by shipping performance. Increasingly the marketplaces, specifically eBay and Amazon, do too. Your prominence in search, and the visibility of your goods, will depend on how effective you are at fulfilling your orders quickly and accurately. More than ever before the marketplaces require not just feedback from shoppers about your performance but also tracking numbers so they can see that you are meeting and exceeding tough expectations.

Amazon is setting the pace

Amazon is the trailblazer for shipping expectations. They have created a formidable fulfilment network that is both quick and efficient and enables seemingly effortless delivery. Next-day receipt of goods has almost become the norm and same-day delivery in some metropolitan areas is now a reality. Weekend and evening deliveries are also common and, with the possible introduction of airborne delivery drones, the stage is set for even more innovation and disruption in the years to come. It’s vital that online merchants and retailers keep pace with developments and adapt their business practices.

Delivery choice and variety is constantly evolving

The arrival of ecommerce over the past few decades has seen seismic changes in the provision of delivery services in the UK and abroad. In the UK, parcel carriage was predominantly made via the Royal Mail and Parcelforce but now dozens of varied couriers have emerged. Whilst this can sometimes offer a bewildering choice it does also bring significant benefits. Competition has been good for prices and product development. Indeed, it is striking in the face of such challenges, that Royal Mail has not diversified as its letters volumes have diminished and parcels have become more important.

Analyse your performance

Understanding all the variables and evolving your shipping and delivery strategy with your growing business is vital to long term health and success. So once you think you have it figured out, don’t let it deteriorate. Reevaluate regularly to make sure you’re delivering the absolute best possible service and experience for the best possible price to your customers.

What’s working well? What services are delighting your customers? Is the price right? And, perhaps most crucially, what can you do to improve?

It pays to be adventurous and experimental in your approach to shipping because the marketplace is ever-evolving and the services that shipping suppliers offer are always changing. Taking the time to analyse and understand the service you’re providing to shoppers will help you make the right choices. The rewards will come in the shape of greater customer satisfaction and improved marketplace ratings.

What is universally acknowledged in the industry is that choice is vital to shoppers. Some people will cheerfully pay a premium for swift delivery, whilst others will wait it means postage is free or cheaper.

Considerations when selecting a delivery service

With such a selection of delivery and shipping services available on the market, it’s crucial to think about your business, what you sell and how those things will influence your choice of delivery service.

Your brand and reputation

Delivery is one of the most vital aspects of the online customer journey and can make or break your business on the back of delivery failures. It’s important to engage reliable service that you can trust and rely on

Where your products are shipping from and to

Different couriers and carriers vary and not just with international despatches. So understanding where yay need to send the products will influence your decisions.

Your product’s weight and size

Delivery firms will often take all sorts of weights and sizes but some specialise in bigger or heavier items and if that applies to your goods then it’s wise to investigate these honed services.

Preferences for tracking

Tracking is increasingly sought by customers and the marketplaces also demand it to, especially in the event of a problem. Indeed, under some protection programmes your cover is weaker if you haven’t used tracking. But sometimes, especially for cheaper items, tracking can be prohibitively expensive.

Your carrier preferences

Past experience, and a delivery firm’s public reputation, will likely colour a choice. To a great extent you get what you pay for with more expensive services offering more options, better tracking and insurance and superior customer support. You need to evaluate what’s important to you.

Your customer shipping preferences

Consider what sellers of similar products use and what customers have come to expect as a normal service when assessing different suppliers.

Product restrictions and regulations

Carriers have different rules and regulations in relation to what they are willing to ship. Some firms, for instance, will not transport glass and ceramics whilst other specialise in transporting such fragile items, such as mirrors.There is a carrier out there for just about everything.

Price

Consideration of all of the above will lead you judge whether the price is right. But remember that typically you will get what you pay for. So more sophisticated services may be suitable for valuable items.

Multiple suppliers and shipping brokers

It is unlikely that any single carrier will be able to provide any one ecommerce merchant all the services they need to satisfy customers. That’s especially true if you send parcels overseas, have a variety of goods you sell, offer multiple services at checkout or sell oversized or heavy items. Most ecommerce concerns will have a portfolio of suppliers and, perhaps, contracts with several providers.

One option that will give you greater access to a variety of services is a shipping broker. Such companies have relationships with multiple delivery companies and can help you get better rates without necessarily having a contract with them. There a numerous such companies available.

Third-Party fulfilment

One delivery option worth exploring for all or some of your inventory is a third-party fulfilment company. This is where you lodge your products in a warehouse and they pick, pack and despatch your items for you. There are several benefits to using a third-party. Firstly, they enjoy economies of scale and negotiate deals on shipping rates and packaging because they are sending ingrate volume than you. You also get access to their expertise: they will have deep knowledge of the various delivery services available and be able leverage that, perhaps with existing contracts.

The cost of the service will depend on what volume of despatches you make, how long you store goods at a warehouse and the exact service you require. The risk lies with the fact you are entrusting your reputation, with customers and marketplaces, into the hands of another organisation. Ensure that you trust and understand your fulfilment service and have a solid SLA (service Level Agreement) in place.

And some of the marketplaces offer dedicated fulfilment services, notably Fulfilment by Amazon or FBA. The marketplace fulfilment options are more fully explored in our dedicated marketplace fulfilment paper.

Innovations and trends in delivery

As the volumes of ecommerce parcels increase, and customer demands for convenience increase, delivery and shipping is an industry seeing innovation and developments. Technology is advancing swiftly but, more importantly, the assumptions regarding what delivery services should be are changing too.

Same-day delivery

Amazon Prime Now is an example of a same-day delivery service that is available to Prime subscribers but other companies and retailers are offering it too. It’s normally offered in high-density residential areas and attracts a premium charge for the convenience and appeals to higher spending online shoppers, or those with an urgent need, who aren’t price conscious. Some services offer delivery within the hour or a 2 hour slot for people in a real rush.

Out-of-hours delivery

Gone are the days when delivery could only be made during working hours from Monday to Saturday. Quite simply it’s not a model that meets everyone’s needs. For people who work, parents, those who travel a lot or have flexible schedules, delivery during the business day is unlikely to be convenient. That’s why more and more evening and weekend deliveries are available and they don’t necessarily cost more. Indeed offering out-of-hours delivery makes a good deal of sense for the couriers and carriers because an unsuccessful delivery, and a potential second or third try, represents an expense, and schemes to eliminate them are attractive. It’s a win-win. The flexible gig-economy staff they employ also make it possible to offer different delivery options.

Click & Collect, drop-shops and collection lockers

The so-called ‘last mile’ of a delivery is recognised by the industry to be the most difficult of a parcel journey. It’s also often neither required or possible to make a delivery if the recipients are not at home. That’s where several services have emerged in recent year whereby delivery isn’t made to a home or office address but rather a place where the customer can pick-up their parcel at their convenience

This could mean drop-shops such as Doddle, parcel lockers which are popular with Amazon or a Click & Collect location, often in a high street store. Added convenience is usually offered by these services because they often have flexible opening hours. That’s especially true of lockers located in public transport locations or petrol stations, and also text or email messages informing customers that the goods have been delivered.

Inflight-options

Greater choice in the carrier market has brought improved sophistication and flexibility. In-flight options are the features you offer buyers once the item has been despatched. That could be the ability to reschedule a delivery or change the location it’s to be delivered to. It can also refer to the communication options you offer to track a delivery. It is ever more normal for carriers to offer text messages or emails to give a more exact, narrower delivery time slot or inform shoppers that a parcel has been delivered successfully or communicating that it has been left with a neighbour or deposited in a secure location

Delivery into your house and car boot

The success of a delivery is dependent on ensuring that the parcel is safely and securely delivered to the recipient. And that’s where two other new ideas have emerged. One is the delivery of a parcel directly into your home by the courier without you needing to be present. Amazon Key is the obvious example and the system they have developed tries very hard to assuage the obvious security worries people have about allowing a person into their house when they are absent. Amazon Key incorporates a special smart lock that the delivery staff use to tap in a one-off pass code to gain entry. A special camera inside your home will show that not only has the parcel been delivered but reassure that that’s all the agent did whilst entering your home. Car boot deliveries work in a similar way and mean that your vehicle can act as mobile drop-shop.

Drone deliveries

Much has been written about the possibility of drone deliveries for smaller parcels and several companies, notably Amazon, have been investing in parcel delivery from the air using autonomous drones. And whilst test deliveries have successfully been made it’s still not clear whether drones have a viable future. Indeed numerous problems prevent them and technology isn’t one of them: it is undoubtedly possible for drones to carry and deliver small payloads. Rather practical and regulatory issues represent the challenges. Unmanned drones represent can be considered a risk to air traffic and so far British and American governments have been reluctant to loosen the rules so that they can fly freely over short and medium distances in civilian airspace.

And the precise details of delivery are also open to speculation. It’s reasonably easy to imagine a payload being easily delivered to a garden or yard. But in areas of higher-density housing there may well not be a place to land.

Self-driving delivery vehicles

Probably more likely to seen in your neighbourhood, before drones, will be the sight of autonomous self-driving vehicles bringing you your purchases. This isn’t just a technology that is applicable to the delivery of ecommerce products but also has broader possibilities, including the delivery of takeaway food. Several companies are already developing sturdy little vehicles that can trundle through the streets, sometimes on the pavement, delivering the goods. Again, this technology is still in its infancy but tests are underway. The regulatory problems are not as stiff as with drones but, like with self-driving cars, health and safety issues are keen.

Shipping and delivery options can give you a competitive edge

The shipping and delivery processes you have in place are a crucial part of your ecommerce enterprise but marketplaces and customers are demanding more from merchants than ever before. The shipping options you offered yesterday won’t meet the demands of customers tomorrow so you must start adapting today.

In the past, customers would accept a delivery that took a few days to arrive, and were willing to wait as long as a week sometimes, but Amazon’s laser focus on fulfilment has raised the bar and online shoppers have ever-growing expectations of marketplaces sellers. No matter how big you are as a business, you’re competing with Amazon: deliver the goods effectively and you will be judged by their standards.

The shipping options and services you offer can help clinch more sales and grow your profitability.
The good news is that there is plenty of choice when it comes to carriers and the services they can provide. Constant reappraisal of the services you’re offering, and an awareness of innovation and industry developments is vital, because the offerings (especially in terms of in terms of price and services) could be developing to your advantage.

We encourage you to take the plunge and elevate your ecommerce enterprise to the next level by improving the shipping experiences you offer.

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