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Internet business has changed to meet the demands and expectations of the growing numbers of online shoppers, shifting their pounds from the high street to the internet.

Initially loved for its price driven advantages, the internet was where you turned to for the £8 CD album and cheaper electronics. But with many high street stores now offering the same prices as their online counterparts, the internet is no longer always cheaper.

Online retailers still tick the convenience box in the minds of shoppers, but how can this be pushed further?

What tactics can online retailers adopt to continue the trend of shifting spend from the high street to online? Let's take a look specifically at delivery.

Delivery

Supermarkets are the pioneers of flexible delivery. Because of their nationwide presence they are able to offer deliveries from local stores at times convenient to the shopper.

As every sector becomes more competitive online retailers will be battling to provide the best delivery options – will everything we buy online in the future have the option for evening and Sunday delivery?

Manufacturer to Consumer

Some large companies are already shipping product direct to customers from manufacturers when an order is placed, mostly to reduce storage costs but for the green benefits too.

Once online retailers start to increase their sales volume will we see the end of warehouses, where goods are stored, with manufacturers taking responsibility for packing and despatch?

Would this make online retailers merely affiliates – with higher margins – of manufacturers?

What do you think are the future challenges in delivery for online retail?

Read 'The future challenges of online retail – launching offline'   on Leon Bailey Green's blog .

Related articles:
E-commerce delivery options - five key tips
The last mile - a rant about delivery

Contributor

Published 28 August, 2008 by Contributor

43 more posts from this author

Comments (3)

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Sarah Clelland

Snow Valley produces a report on delivery and returns every year - the 2008 version is due out next month so I'll have a more concise set of answers to your question in October. But to try and give you some ideas now:

You mention drop-shipping - I was at an event recently where the founder of eBags explained how they had had to do away with drop-shipping in Europe. The consumer ordered something and wanted it tomorrow but eBags was passing that order over to a manufacturer that didn't share the urgency. The whole customer experience was marred and that, to my mind, is the main problem with direct-from-manufacturer delivery. But some retailers manage it very well, it must be said.

Apart from that, I think the challenges have remained consistent over the years:

1. Striking the right balance between offering flexibility and minimising cost to the business. There's no point in supporting 5 delivery options if the customer demand for them isn't there. Electrical goods retailers may well need to offer AM or PM options - do clothing retailers really need to do the same?

2. Getting the communication right - once upon a time it was enough to have a few e-mail acknowledgment e-mails. Yesterday I put an order through on Halfords and got an immediate text message to confirm my order. Ocado texts you when they're nearby so they can really narrow down how long you have to wait in for them. Customers are getting much more demanding.

3. Smart use of delivery in promotions - John Lewis decided to offer free delivery on everything last Christmas. They're still running it, which shows how successful it was.

There's a lot more to say and no doubt we'll be saying it in our report - if you want to know when it's out, just send me an e-mail or sign up to our newsletter www.snowvalley.com/subscribe

Sarah

about 8 years ago

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Piggynap

What still puts me off some online retailers are their delivery options - requiring a signature but not delivering to my work address for example. As you said, if that same shop offered evening delivery it'd be a complete no-brainer.

about 8 years ago

Jay Gohil

Jay Gohil, Senior Online Marketing Manager at borro.com

One way online retailers can build customer loyalty is by offering flexible delivery options – customers can select delivery date (either a.m. or p.m.), give special delivery instructions, select choice of communication on order status (email or SMS), allow orders to be delivered to addresses other than billing address), option to collect from store. This will reduce the likelihood of failed first time deliveries.

There was a study done by IMRG that 43% of retail sites in 2006 didn’t offer any delivery options – not even next day delivery for an additional fee and only 6% offered a ‘buy online, collect in store’ option.

Retailers also need to adopt a multi-carrier strategy (Royal Mail, FedEx, DHL, DX, Parcel Force, ParcelNet e.t.c.). Their systems can be set up to select carriers in real time against certain delivery criteria (time & day of delivery, package size e.t.c.) and automatically create the necessary carrier documentation and despatch instructions to the warehouse.

MetaPack has an interesting delivery management solution that helps retailers offer flexible delivery options, allows them to select the carriers and communicate to their customers on the order either via email or SMS. They can also manage the product returns and co-ordinate with any delivery for store collection. A number of retailers are using their solution – Dixons, John Lewis, Mothercare, Boots, ASOS, M&S, B&Q e.t.c.

More info. can be found here - http://www.metapack.com

Jay

almost 8 years ago

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