One of the biggest challenges for retailers this year will be managing deliveries, particularly at peak selling times such as Christmas and Black Friday. Siobhan Gehin, Managing Director, Kurt Salmon, part of Accenture Strategy, examines just how long it takes for customers to receive their online orders.
Over the next year, retailers will be looking even more closely at how they can best meet customer demand and service expectations during peak times, particularly with store deliveries as click and collect grows in popularity.
According to a recent shipping study from Kurt Salmon, part of Accenture Strategy, on the delivery performance of online orders placed with 54 retailers in the UK on Black Friday and Cyber Monday 2016, we discovered that collection from store was almost twice as speedy as home delivery. The average time for standard delivery was 3.8 days, compared to 2.2 days for click and collect, which means that customers saved on average 1.6 days per order by selecting this option.
Along with speed of delivery, retailers were also measured on order accuracy and delivery costs. Argos and Uniqlo were the fastest retailers to deliver for their customers, with Marks & Spencer a close third for both delivery, and click and collect services. Argos was first for speed, delivering for customers the same day orders were placed, as well as providing a same day click and collect service. Both Uniqlo and Marks & Spencer were also able to offer next day collection in-store.
Half the retailers surveyed that offered click and collect promised it would be in-store within one day, almost three days quicker than their indicated estimate for home delivery.
Currently, there are few retailers who have fine-tuned stock visibility and order management systems in place to fulfill online orders from a store location. Those that do can speed up in-store collections and home delivery times. The majority of retailers use their logistics network to offer a next day service.
However, retailers are recognising that customers would prefer to be guaranteed that their orders will be delivered on time, even if that means having to wait a little longer.
Overall, retailers have improved their actual delivery times over the past year by 10 percent; orders took an average of 5.3 days in 2016, compared to 5.9 days in 2015. The promised standard delivery times were also reduced from 6.3 days to 6.1 days.
This improvement is despite the fact that retailers who promised to deliver goods in three or fewer days in 2015 were actually more cautious in 2016 and extended their lead-time by an average of 1.5 days as a result.
Customer delivery expectations, however, vary considerably depending on the demographic – another reason why retailers are investing in getting to know their customers better so that they can deliver against expectations – not just in fulfilling their online orders, but in all service areas.
According to recent Accenture research, 42 percent of UK consumers under the age of 37 say that same day or next day delivery is very important to them. Speed of delivery is much more important to Generation Z shoppers (18 to 20 year-olds) than Millennials (21 to 37 year-olds). The study suggests that 59 percent of Generation Z shoppers believe faster delivery is important, 20 percent want same day, and 27 percent want next day delivery. Only 48 percent of older Millennials crave faster delivery and 31 percent are content with next day delivery.
To meet ever changing consumer expectations, retailers need to ensure they are operationally robust to fulfil customer orders and deliveries around hugely emotive times of year, such as Christmas and Black Friday, if they want to build lasting loyalty. Being nothing less than a well-oiled machine at peak times of the year is simply not an option.