By David Upton, MD of DA Systems.
E-commerce is now such a part of everyday life that retailers are adapting their business models to offer the next wave of industry development, with 'omni-channel' retailing. Consumers expect to order the goods they want from any channel and receive them with an immediacy that can be hard to achieve. It is therefore essential to have the right partnerships with delivery providers in place. The lead-time between an order being placed and goods arriving is shortening all the time and yet customers expect better service levels. Couriers and delivery providers play an essential role in completing the final part of the e-commerce cycle and should be selected carefully. Couriers are now responsible for delivering £38 billion worth of sales from e-commerce, according to recent research from IMRG. With business volumes at such a high level, missed deliveries can be an expensive problem and not having the capability to notify customers with an estimated arrival time is a big contributing factor. Each failed delivery is estimated to cost up to £238 once all the associated elements like fuel, driver wages and goodwill are taken into account.
The first and most important point to appreciate is that delivery companies are not anonymous. Your customers notice the courier firm you as the retailer use and this element of the transaction forms a key and final lasting impression of their overall experience. As such, consumers can actively rate them and are aware of the different courier firms and their brand names. The effect of this was demonstrated in the results of the January 2014 Moneysaving Expert survey into consumer satisfaction with couriers. Although this was an online poll and the results should be interpreted as such, it was clear that consumers could recall names of the courier companies that had delivered the best service levels and were the most efficient and respondents could also rank them by name in order of preference. By far the most popular delivery company was DPD, the reason cited was because they communicate very proactively with consumers to tell them where there parcels are, when their parcels will arrive, allow customers to easily change delivery times and provide a one-hour ETA window. This first position is likely to remain as DPD are also continually improving their service offering.
Couriers need to be brand aware because when a courier company delivers a parcel, it automatically becomes an extension of the retailer's brand. Having a courier firm able to maximise the 'doorstep experience' is increasingly relevant, especially for luxury or niche brands. It's such a significant aspect of the e-commerce experience that some high-end retailers have even started using bespoke couriers to better reflect their brand positioning. For instance, one start up is offering retailers the opportunity to have a fully liveried delivery van for the ultimate service. Think about what that says to fashion and lifestyle consumers who buy into a particular brand identity? Companies like Swarovski could be equipping a glittering sports car for instance, whereas FatFace might choose a sporty 4 wheel drive Mini? It's a great idea in principle, but as someone that has worked with countless courier firms, I do question whether it is sustainable for a courier to operate this way in the long term. This is because every retailer is likely to want a unique identity for their delivery service, which conflicts with the business needs of couriers. In order to be more profitable, couriers need to combine services across multiple clients to achieve economies of scale.
When researching a potential delivery partner, one of the first questions retailers should be asking is the extent to which the transport provider is using mobile technology. This is central to enabling a courier to offer the right level of service, so retailers looking for a partnership should be targeting ones that have already invested in mobile data solutions. For a retailer, the benefits include the following: capability to monitor delivery success rates like % on time levels, ETAs and re-delivery rates; the ability to send real-time proof of delivery messages to the customer; reduced risk of fraud by using unique PIN number based tracking; omni-platform compatibility allowing a single application to run on multiple devices and increased productivity with on-device route optimisation.
If a courier is able to offer real-time tracking and enhanced services like one-hour delivery window communications, you know they understand your customers' expectations and will work with you to ensure your service offering is excellent. By working with a more forward thinking delivery company, you are effectively 'future proofing' your supply chain processes. Then, if at a future point you want to start providing one hour or same day deliveries, your existing courier is already equipped to adapt accordingly and can evolve as your e-commerce offering matures.
About the author
David Upton, MD of DA Systems is an expert in mobile data solutions for transport and logistics companies. DA Systems works with the UK's leading courier firms, helping them to introduce real-time tracking and communications technology to provide a better service to retailers and their end consumers.