Bren Standell, commercial director Parcel Lockers Division UK/IRL, Quadient
Online shopping continues to rise – accelerated in part by the ongoing pandemic – placing increasing strain on physical stores.
This acceleration in migration from in-store to online shopping presents retailers with numerous challenges, not least the business model and strategy they adopt to meet customer expectations. Those for whom bricks-and-mortar stores remain viable are evolving their operations, sales and marketing to support today’s consumers’ shopping behaviour. This includes browsing in-store, purchasing online and returning goods through either channel.
Last-mile delivery, which is the stage that finally brings parcels to consumers’ doors (or close to), is the most labour-intensive and expensive part of the parcel delivery process in internet retail. In fact, Apex Insight discovered that for leading UK carriers, last-mile delivery represented an average of around 45% of their total costs.
An Ofcom report for the financial year of 2018-19 found that total parcel volumes in the UK increased by roughly 10% year-on-year, coming to a total of 2.6 billion items in the UK. On top of this, the current global situation is likely to mean that people will continue to favour online shopping in order to further reduce any unnecessary physical contact in their lives. This growing appetite for delivered goods creates a significant challenge for retailers: how to cost-effectively manage last-mile delivery to meet customer expectations?
Striving to meet the demands and expectations of consumers
Consumer expectations of retail are changing. Choice and convenience lead an increasing number of shoppers to look for what they need online. As such, retailers are having to evolve their propositions to make physical stores work for them.
On top of this, competition is high. Customers have a lot of choice, not only in what they buy but also how they buy it. Brand loyalty is therefore hard to build and maintain. In this environment, customer satisfaction with service as well as goods is key, with shoppers quick to take their money elsewhere if the offering falls below expectations.
In an omnichannel environment, where customers shop in-store as well as online, expectations are high that purchase delivery will be easy and convenient. Consumers expect the transition from one channel to the other to be seamless. In response to these demands, in addition to the continuing growth of online shopping, the pressure is rising on last-mile delivery.
By optimising key components of delivery, retailers and carriers can strive to meet customer expectations of the service: These include:
- Speed – According to research from OC&C Strategy Consultants, between 2013 and 2015, the proportion of UK online shoppers choosing next-day delivery grew by 50%.
- Information – Keeping customers informed helps with customer satisfaction and limits queries, thereby managing the cost of delivery.
- Choice – A survey conducted by the International Post Corporation found that over two-thirds (68%) of respondents had a parcel delivered to their home in the past year.
- Price – While consumers like the option for same-day or instant delivery, their willingness to pay for it is limited. To meet this, retailers need cost-effective ways of providing the service.
The growing click and collect trend
With shoppers continuing to make an ever-greater proportion of their purchases online, it’s important to them to know that collecting their parcels will be simple and convenient and, for now at least, that they are able to avoid coming into direct contact with anyone to receive them.
Reflecting this, one option that has seen a surge in popularity is click and collect. This solution enables customers to collect items in-store, at a time of the day which is best suited to them. According to Cybertill (2016), 72% of UK shoppers used click and collect, while research by Savills revealed that 47% of stores in the UK offer click and collect services.
As such, click and collect helps to go some way towards meeting the demands that customers place on convenience, as well as helping retailers to manage costs. It also encourages further spending, with 65% of consumers making additional purchases in store when collecting their orders.
Nevertheless, there are issues with click and collect. Increased burden is placed on in-store staff, in particular with regards to service delays, whilst almost one-third (32%) of shoppers stated that they had faced long queues at collection points. Additionally, the same percentage were forced to endure long waits whilst store assistants tried to locate their parcels. As a result of these issues, about 73% of 526 shoppers surveyed by IoT and mobile device management firm SOTI said they prefer retail self-service technologies, such as self-checkout, over engaging with store associates, a 10.6% increase from last year. Of course, although limited, customers will still need to expect to be in close proximity to staff, and vice versa.
Parcel Pending Lite
Addressing these issues and needs, Quadient has developed Parcel Pending Lite Intelligent Parcel Lockers, which have been designed specifically for the retail and parcel carrier markets. They can also help to bridge the gap between retailer and customer in last-mile delivery.
Secure locker storage solutions provide the means to address in-store collection issues and, for customers not electing to pick up their items from the shop, the opportunity to be able to collect their goods from another convenient location. Additionally, customers are kept informed regarding the status of their delivery with electronic notifications, and when their parcel is ready to be collected from the parcel locker they will receive a notification, including a unique one-time PIN. The customer is then able to collect their item at a time that suits them, providing that the store is open, without requiring in-store staff to serve them. All that is needed is for the customer to enter the code via a keypad to open the relevant locker. This is also beneficial to in-store staff, as it means that they are relieved of the responsibility of managing parcel pick-ups, giving them more time to serve customers.
It is also important to note that the modular design of Parcel Pending Lite enables retailers to assemble the locker according to their locations needs, providing a scalable solution that can grow with increasing volumes. As such, this limits the amount of space taken up by parcels ready for collection, but that are not in lockers. The space saved can instead be utilised to house goods for sale.
As shoppers these days are making an ever-greater proportion of their purchases online, it’s important that receiving their parcels will be simple and convenient. In this way, well-managed last-mile delivery becomes a selling point for retailers in the drive to attract and keep customers.
For more information on Quadient’s recently launched Parcel Pending Lite solution, visit the Quadient website: https://www.quadient.com/en-GB/parcel/parcel-pending-lite.
(A Retail Times’ sponsored article)