What can retailers do to improve online delivery?

On Sunday, The Independent published an investigation into the great ‘online delivery scandal’ which looked at the ‘hundreds of thousands’ of people who received less than satisfactory service in the run up to Christmas. 

It was accompanied by an editorial which uses the findings to disparage online retail.

As an advocate of ecommerce, my gut reaction is to object to this, but it’s clear that ‘the last mile’ is an issue for retailers, and for consumer confidence in online retail. 

So what can retailers do to combat these problems? I asked several ecommerce experts for their views…

Online delivery: the issues

The Independent uncovered some damning stats on failed deliveries, including: 

  • During December, at least 225,000 parcels each day failed to arrive when promised.
  • 60% of people shopping online last year had problems with delivery of their item.

An Econsultancy survey carried out last year, looking at Christmas 2011, found that a quarter of deliveries arrived late. However, retailers did have the excuse of bad weather conditions which played havoc delivery schedules. 

This year, there was no weather-related excuse, but the extra demand appears to have caught out some retailers and couriers. 

In a survey of 1,000 UK consumers, carried out online, we found that 87% said their orders had arrived on time, which of course leaves an unhappy 10-13%

Did your Christmas gift orders arrive when retailers said they would? 

The issues are not just about late deliveries, there is also the quality of the service. For example, one well-known high street retailer left a package containing a laptop at my front door in full view of passers by. Not good at all. 

Now, as the Independent article points out, this may well be due to extra demand on courier services, and inexperienced temporary delivery drivers, but the blame is likely to be placed on the retailer in question. 

Our survey found that 59% said they would not shop with a retailer again if they failed to deliver on time. 

The consumer view

Delivery issues are made worse for customers by the sheer amount of time wasted, either waiting in for parcels that don’t arrive, or waiting in call queues when trying to chase up deliveries. 

Pete Handley of the mediaflow had a poor experience with Yodel, which he details in this post:  

My views on this are all that of a consumer that got angry enough to write a blog post and talk about my issues a great deal on social media. I wasn’t entirely surprised to read the Independent story on Sunday.

The issues that caused me such ire occurred around the Easter Holidays last year with a particular courier. By all accounts they were transitioning between depots locally at the time, along with an extended break for the holidays themselves.

I wrote a couple of blog posts, contributed on forums, attempted to reach out to the courier and retailer on social media as well as making lots of phone calls and sending lots of emails in an effort to actually receive the parcel I’d ordered.

After weeks of chasing this, with no delivery attempt made at any time, it was sent back to the retailer who eventually refunded me (when they got the parcel back from the courier). My requests for an immediate refund were ignored. 

What do consumers want from delivery? 

  • Clear, accurate tracking online. This can save a lot of wasted time, and reduce pressure on call centres. 
  • Informative, proactive communication (text, phone or email updates). I was impressed by the SMS notifications used when I ordered gifts from Hobbs before Christmas – it sent me a one hour delivery slot, allowing me to change it if inconvenient. This is also offered by Kiddicare: 

  • Good levels of communication when problems (inevitably) occur. Even the best online retailers will experience delivery issues now and then. The key here is to communicate with customers – don’t make them work too hard to find out about their delivery. 
  • Non premium rate phone numbers to call at the courier. Premium rate phone numbers for customer service are a big mistake. Having failed to deliver items, don’t add insult to injury by making them pay for the call.  
  • Greater levels of support from the retailer. As a retailer, it’s not enough to just palm delivery problems off onto the courier and have customers chasing their order up. Customers will hold the retailer, not the courier, responsible so be pro-active in following up problems. 

Pete Handley is well aware of the potential problems with couriers, but does think retailers can do better: 

I do blame retailers to a degree, particularly when they ignore widespread criticism of the same problematic couriers. They are however almost certainly locked in to contracts with these companies in an effort to secure the cheapest prices over a set period of time.

Retailer’s problems with couriers 

You may have provided an excellent customer experience, and the customer may have been very happy with price and product, but the last mile is out of the control of most retailers. 

Of course, if you’re Argos or Tesco with your own fleet of delivery vans, then you have more control here, but that’s not realistic for most online retailers, and they have to rely on courier services and/or the Royal Mail. 

When these third parties become involved, there is much room for complications. According to Ecommerce consultant James Gurd, there are two models that can cause problems: 

1. Third party fulfilment

SLAs are agreed upfront but the resource is managed by the third party so they control the people who pick, pack etc. The only mechanism for improving quality is by enforcing SLAs or having punitive clauses for poor performance.

However, you can’t dictate who they employ, only influence by proactive management. Success is determined by the quality of contracts, how well you enforce them and how proactive you are at managing the service provider e.g. Director to Director relationship.

2. Drop ship

This can be a major headache for retailers as the quality and proficiency varies by supplier.

Some may have the tech in place to seamlessly integrate with your ecommerce platform to enable rapid, accurate order management. Others may be too small to have this investment in place and rely on manual processing, which increases the error count.

I’ve worked in several drop ship environment and can safely say that it’s imperfect – there will always be a small percentage of Suppliers whose attention to detail and quality is poor.

According to James: 

Of course, retailers can terminate agreements and focus on the suppliers who don’t let them down. The problem here is that if one of the unreliable suppliers is a category killer for you (i.e. Their products are essential to your competitive positioning), then you risk damaging your online brand proposition by shelving the range.

What do you do? Accept lower than desired delivery efficiency for the sake of range coverage, or sacrifice the range to remove the delivery headache. Either way, it can have a detrimental effect on the business.

The inside view

I asked one Ecommerce manager, who preferred to remain anonynous, about their experiences with couriers: 

We currently use Parcel Force through Despatch Bay and are very happy with their service. We do, of course, get the odd issue, but compared to other couriers we’ve used, we find both easy to deal with and largely reliable.

One issue we have faced is with rising costs due to the cherry-picking of parcels handled. Parcel Force do not like handling heavy, bulky items shipped in sacks, as they get snagged on conveyor belts and require manual labour to shunt around the depot.  

As a result, they’ve significantly increased the price we are asked to pay to ship these items, in an attempt to discourage us from sending them through their hub.

As a result of their price hike for these bulky sacks, we switched to Yodel. We’d used them in the past and had been very unhappy with the service, but seeing as Parcel Force wouldn’t handle them at a realistic price, we were forced to send some parcels through Yodel.

This has been a painful experience for some of our customers, our warehouse operations staff and our call centre, who’ve had to deal with the fallout. 

Our customer services staff found Yodel a right pain to deal with, and we lost count of the amount of times their lorry failed to arrive, didn’t have space for our pallets, or had a delivery driver who refused to load the goods onto the vehicle.

They’ve been so bad, that we’ve now decided it’s better for our customers and our business for us to place the sacks into boxes (at considerably greater expense) just so we can get Parcel Force to handle them again.

This will cost us about an extra £30K per year, but hopefully it’s going to prevent customers defecting because we’re sending their order via Yodel. 

We do have issues with making claims against our couriers for items which are damaged in transit or lost. It feels like the process of making a claim has been made harder and harder, and despite providing the data requested to make a claim, they invariably get rejected, which leaves us to foot the bill.

What should retailers do to improve this? 

Clearly, while the retailer is forced to hand control of the last mile over to the courier or postman, there is a lot they can do to make sure standards are high. 

James Gurd has some suggestions: 

  • Be diligent when negotiating SLAs and contracts with third parties.
  • Vet the couriers that any third party fulfilment partner will be using 
  • Manage as many products as own stock as financially possible – you can then control the delivery promise.
  • Ensure the tech is in place to support end-to-end order management integration. Don’t process orders through the platform then hand them over to a supplier who has to manually export and process.
  • Enable real-time stock management and order status updates so accuracy is high.
  • Ensure there is a robust and detailed order management process flow that has been reviewed by all parties involved, tested rigorously and reviewed regularly.
  • Don’t make promises to customers that can’t be delivered. Better to say five working days and be 100% accurate, than claim three days and let many customers down.
  • Ensure there is a clear feedback loop for customers and that all data sources are compiled e.g. Web feedback, emails, Customer Service calls, social media comments etc.

Making things easier for customers

There is much that retailers can do while customers are placing an order which should make things easier further down the line for couriers and customers. 

Lovehoney’s Matthew Curry has a few tips: 

Get accurate address information

Getting accurate address information seems obvious, but remember, the customer knows their address better than any address lookup system – remember to provide a method for manual entry of this, or overriding the information the address lookup system has returned.

Allow customers to select a safe place to leave parcels

If customers can select a safe place for the postman or courier to leave the parcel, or to select a trusted neighbour, this will save time for them, and customers won’t need to head to delivery depots for collection.

Here, Naked Wines allows customers to add a message: 

Use tracked delivery

Royal Mail offers relatively cheap tracked services, so you can look into the viability of this as the “standard” delivery option. The more information you have about a delivery, the more information you can pass to the customer.

Manage expectations

The retailer should also manage expectations, charging for “standard delivery” seems suicidal to me, but lots of retailers still do it. Paying a fiver for delivery is still a lot of money, and so the customer will want a service that reflects that.

The base expectation when buying online is an order promptly dispatched, securely packaged, and delivered on time, so what does that extra fiver get them? If your “express” service is a tenner (!!) what does that get the customer? Your delivery costs are a way for you to compete, you shouldn’t be using them to bump up profits. 

Despatch items promptly

How frustrating it is to pay (often exorbitant) costs for delivery, only for the order not to leave the warehouse until several days later. In an environment where customers are familiar with next day, and increasingly same day services, being sluggish picking the order is unacceptable.

On peak days, you should see it at Lovehoney where everyone heads down to the warehouse to help out – satisfying the customer is always priority over all other business functions.

Dealing with higher value orders

If it’s a high-value order, then delivery should automatically be upgraded to a tracked, signed-for service.

We upgrade customers to a Tracked First Class service at a £30 spend (much less than our AOV), and a Signed-For Next Day at £75. it mitigates the risk of a resend, and delights the customer.

You get what you pay for

You do get what you pay for with delivery companies, not in the “last mile” part of the journey, but in the systems, integrations and tracking they have available.

However, these costs are not to be passed onto the customer, I like to think of them more as Cost of Retention.

Conclusion

Delivery will continue to be an issue, as the growth of ecommerce puts more pressure on couriers and mail services, while seasonal peaks mean that it’s necessary to recruit untrained and perhaps less motivated staff. 

Retailers need to be vigilant in dealing with couriers, and put pressure on them to provide the best possible levels of service. It’s their reputation at stake, as well as their customer retention rates. 

What is also vital is to provide the best possible customer service after customers have delivery problems. At this point, it’s still possible for the customer’s experience with your brand to finish on a positive note. 

See more here:
What can retailers do to improve online delivery?

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