One size doesn’t fit all for the last mile
Amazon recently announced that it plans to invest US$800 million toward making one-day shipping the standard offering of Prime. But same-day, 24/7 services are actually the future of e-commerce, according to ParcelHero’s Head of Consumer Research, David Jinks.
Consumers now expect near instant gratification and the inevitable eventual result will be 30-minute round the clock deliveries, he believes. ParcelHero’s latest research reveals around 25 percent of people would be happy to pay at least £3 extra for this.
Well, he would say that, wouldn’t he? Being head of a parcel delivery company, it’s in his interest to argue that shoppers want their orders and they want them now. But is this really the case?
Certainly, such services are already commonplace in areas of China. And where China— and in particular Alibaba— leads, the West often follows. But perhaps not in this case.
Indeed, there’s an argument that, while Amazon has driven significant advances, it has also created as many problems as it has solved. When it comes to the last mile, too many retailers are making promises they can’t keep, simply because they feel they must compete with the US company, resulting in disappointed customers.
With the introduction of next and same day delivery, one-hour slots etc, and the likes of drones and robots being piloted, the space is getting both increasingly innovative and complicated.
Take drones, for instance. These offer a number of benefits for both retailers and shoppers. Bypassing ground transportation allows for greater route flexibility. Delivery addresses can also become less rigid, allowing for literal ‘anywhere, anytime’ shopping.
And yet consumers are currently divided on this. According to GlobalData’s 2018 Q4 survey, 47 percent of global consumers consider it appealing to have online orders delivered by automated devices such as drones or driverless cars. One-third, however, find the concept to be explicitly unappealing.
No easy answers
There isn’t a one size fits all solution for the last mile. Whilst many Millennials and city dwellers might prefer fast delivery, older shoppers might be happy with four to five days or Click and Collect.
Indeed, some High Street retailers are encouraging the latter, either by offering free or cheaper in-store collection to drive add-on sales or by hosting third-party collections to boost new customer footfall.
It also depends on the retailer. Instant gratification makes sense when we’re talking about Amazon. But what if you’re purchasing a large electrical item or furniture? You would need to arrange time off work to wait in for delivery, making other options more appealing.
AO, which bought a logistics business so it could try to innovative things in-house, offers next day, but very few customers use it as the sense of urgency just isn’t there. Nominated days is the most popular option.
Rather than building out the logistics capacity to support ultra-fast shipping, many retailers should be looking to improve their current offerings. We’ve all, for instance, waited at home for a delivery that didn’t arrive. Or returned home to find a package left behind a bin.
Only four of the UK’s 100 largest online retailers provide customers with personalized information about the status of their orders, with 27 percent not communicating at all during the delivery period, according to a recent study carried out by parcelLab.
The research involved placing orders with the likes of Boots, Sainsbury’s, M&S, Asos, Currys PC World and Apple. Just 11 communicated with their customers directly during shipping. The remaining 89 either left this to the delivery carrier or the customer received no updates at all.
Be innovative, yes, but also be practical and make promises you can keep.