What comes first - Customer expectation or delivery solution?

Andrew Starkey, Head of e-Logistics, IMRG

Trends in e-Commerce logistics

London, 21st of September 2016 - When we look at trends on e-retail delivery it’s sometimes hard to see whether they are initiated by consumer demand or whether that demand is prompted by a new solution or market offer. The truth is usually a combination of both – The shopper has a vague notion of what they would like in order to make online delivery more convenient, but no direct influence on how that might come about.

The supply side of the industry (retailers and delivery companies) try to anticipate these aspirations in order to gain competitive advantage using promotional and new solutions to keep one step ahead.

  • If promotional offers can be sustained and competing companies adopt them; bringing about widespread use, then short-term trends might emerge but these often fall away when the offer stops being effective or something else comes along.
  • Delivery solutions take time to be adopted because even if a delivery company has a great idea it has to persuade its retailer clients to offer this to the shoppers before anything like a change in trend can occur.

However, when the happy coincidence of demand and supply occurs, long term trends emerge and in the UK over the past 4 years we have seen how customer expectation + delivery innovation has changed the trend in the use of next day delivery services and how, more recently retailers seeking to gain competitive advantage have changed it again.

The chart here shows that back as far as 2011/12, specified day delivery, the majority of which was next day delivery, held equal billing with the use of economy services. Our view at the time was that shoppers were using next day in part because of urgency, in part because of offers from retailers but in part because they wanted to have a predictable timeframe that would allow them to anticipate and be available to receive their order.

20160921 Service type tracker
Source: IMRG MetaPack Delivery Index 2016

We moved into 2012 and through to 2014 we can see the declining trend. This coincides with the introduction and gradual adoption of pre-delivery advice effectively allowing shoppers to know when their orders will arrive without the need for a premium service.

This is evidenced by parallel data IMRG’s UK Consumer Home Delivery review which over a similar period has confirmed shopper’s aspirations for information about the progress of their deliveries above the speed of those deliveries.

When asked what service options would make online shopping more convenient, the ones given the highest priority are all related to ‘where is my order’ or being able to specify when and where a delivery is made.

What delivery service options would make shopping more convenient?
Source: IMRG Blackbay UK Consumer Home Delivery Review 2016

So we can see that the trend in delivery service / speed is directly influenced in the trend for more accurate control of deliveries.

And this extends to another recent trend, that of click & collect which is also a means for the shopper to specify where delivery should be made and know exactly when they will receive it because the timing is almost entirely at their discretion.

Over the past two years we have seen a slight increase in the trend of awareness of this solution

With the use of 3rd party (PUDO and Locker) networks entering shopper’s minds as a truly viable alternative.

Click & Collect services
Source: IMRG Blackbay UK Consumer Home Delivery Review 2016

So we can see that the trends in e-retail delivery are often interconnected and ever evolving as proved by (referring back to the next day trend) the fact that next day delivery is on the increase as retailers once again use it to gain competitive advantage. Our latest research (of IMRGs to 50 UK web sites) shows that of those sending physical product, 22% now offer next day delivery as their standard delivery offer and if strategy is more widely adopted then of course the use of next day delivery must continue to rise – but for how long? In this world there is no such thing as a permanent trend!