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26th of May 2018

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What the future of retail delivery looks like

The retail industry is not only evolving quickly, it is doing so at a faster and faster rate of change. Technology innovations, changing consumer behaviours and attitudes are all playing their part in increasing the number of online purchases and those through other channels. And they’re changing the face of retail delivery as we know it.

Having worked in the world of logistics for many years, I’ve seen first-hand how technology advancements can shape and shift the customer journey, and in turn the delivery journey. Here are my top five predictions for what the future of retail delivery will look like… 

1. Even quicker and cheaper deliveries   

Most consumers today expect free delivery. And any retailers that have the profit margins to offer free delivery, should offer free delivery.

Retail giants like Amazon have set the standard, offering repeat customers Amazon Prime, a delivery subscription service where consumers pay £79 a year or £7.99 a month for free One-Day Delivery, Priority Delivery, Standard Delivery, Same Day Delivery and more. Consumers are happy to pay Amazon Prime’s delivery subscription fee in exchange for speedy deliver times.

A survey of over 1,000 UK consumers by delivery management company, whistl, found that 94% are more likely to make an online purchase if there’s a free delivery offer, and most people asked expect free delivery with orders over £10.  But if offering free shipping isn’t an option, then testing a low delivery fee between £2 – 4 could prove to be an effective strategy.

Consumers also want their products quicker – PWC found that fast and reliable delivery (same day and click-and-collect) matters to 29% of UK shoppers.  A different survey by Trimble found that “even though a quarter of respondents said that delivery costs are too high, 40% of shoppers are willing to pay for next day delivery and 22% would pay for delivery within a two-hour slot.”   

Payment service providers like Klarna are offering a try-before-you-buy payment structure – offering customers an order now, pay after delivery solution. Consumers can order items (up to a certain amount) through Klarna, get it delivered for free, and try the item on at home before committing. They can then decide to either pay for the item 30 days after shipment, or send it back for free. 

As a retailer, you need to be working closely with your logistics provider to make sure your products are available locally, that you have a real-time view of your inventories, and that your logistics provider can find and pack your products quickly and pick up and deliver orders at any time and at multiple times throughout the day, to help make cheap and quick deliveries possible.   

2. Retailers will need to make sure all their warehouses are well-stocked to meet the rise in local searches 

Location-based Google searches growing. And it’s clear that consumers are giving more weight location alongside other purchasing influencers like stock information, offers and opening times. 

Google says words like “near me”, “closest” and “nearby” are becoming more common in Google searches, with 30% of all mobile searches related to location. And, of those consumers searching locally on their smartphone, 76% visit a store within a day, and 28% of those searches lead to a purchase within a day (Think with Google). Retailers like Argos offer ‘Check & Reserve’ to consumers looking for a particular item in their local store, and give them the option to reserve their item without payment, where they’ll then complete the purchase by the end of the next working day. They also offer Fast Track reservation online, for same-day, in store pick-up and delivery on 1000s of items. If items are out of stock in the local store, then consumers can ask for an alert to let them know when the item is available for purchase at their local Argos – helping the retailer recapture the local buyer’s purchase intent.

Local searchers have high purchasing intent, and as a retailer, you need to work with your logistics provider to make sure warehouses are well-stocked and close enough to stores to help deliver reserved items and orders, and to keep stores in constant supply of in-stock items. And if the local warehouse doesn’t have the item in stock, then your logistics provider needs to be setup to travel between branches and retrieve stock from warehouses that are located further away. 

3. Voice search will play a huge part in the whole customer experience 

Voice search has the potential to become a big part of the consumer purchase journey and delivery. A recent poll by Walker Sands found that 19% of consumers have already made a purchase using a voice-controlled device in the past 12 months. And it seems millennials are the driving force - with 37% saying “they ‘always’ or ‘often’ shop online via voice-controlled devices”, and 43% have made a purchase using voice in the past year.

If consumers are making purchases via voice search, they’ll likely expect the rest of the purchase funnel to also offer a voice search option. Which means that as a retailer, you need to make sure your logistics company also offers voice search services. If a consumer wants to know where their order is, and they ask their voice assistant, your logistics company needs to respond via voice, because you should be offering a consistent customer experience at every touchpoint. Voice search offers quick responses that suit a consumer’s lifestyle, and if they can’t get the answers they want, how they want them, this can cause buyer frustration. 

4. Augmented and virtual reality will result in more online orders, and fewer returns   

Augmented and virtual reality make it easier to virtually do things like try clothes on for size, and see how large consumer devices might look in the home. The sense of not being able to see or touch an object will become less of a problem, and that will help to reduce buyer hesitation. With an easier product journey and fewer obstacles, technological advancements will help to facilitate more online orders. 

Makeup retailers like L’Oréal are already using apps like Makeup Genius to let consumers virtually try on makeup before buying, and more brands like Sephora and Charlotte Tilbury are following suit. Ted Baker has experimented with a virtual reality digital concept store in Shoreditch, giving in-store visitors a look at clothing items in closer detail and a chance to play games or watch films and interact with the Ted Baker surroundings. 

A more realistic view of how items of clothing, makeup and jewellery will look for consumers should, in theory, offer a realistic and decisive shopping experience – helping to reduce the number of online orders being returned.   And as a retailer, you need to make sure that your logistics provider can keep up with the increasing number of online orders.   

5. Retailers will need to work with their delivery teams to make sure they’re delivering a consistent brand experience   

Consumers are creating and managing orders and returns across channels, and retailers will need to offer a consistent customer experience at every touchpoint.

From chatbots to email, social media, phone and more, channels need to be working together and saying the same message to help generate orders and offer the best customer experience.

You need to be working with your logistics provider to make sure they’re saying the same message as you, and offering the same customer experience to help generate more orders for your business. 

And, because you’ll need to share information with your logistics provider to offer an omni-channel experience, you’ll both need to make sure you’re keeping customer data safe with a cryptocurrency technology such as Blockchain Technology.

It’s an exciting time to be in retail delivery. And as we start to use technology innovations like augmented reality truck loading and Interactive Voice Response systems to help schedule deliveries on the logistics side, I’m confident that retailers and logistics providers can work together to help drive a new future of retail delivery.

Brian Bourke, VP Marketing at SEKO Logistics    

Image Credit: Maarten van den Heuvel / Unsplash

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