How retailers can respond to the growing demand from consumers for convenient purchasing
If the age old adage that the customer is ‘always right’ remains true, then the retail industry should be bracing itself for a major shift in the way it manages its operations. While the phrase was popularised in the last century by iconic figures such as Mr Selfridge, to reflect a more humble approach to customer relations, today’s retailers would do well to be mindful of it when considering how effective and efficient their supply chains are to responding to customer demands.
In today’s sales-focussed, highly pressurised retail environment, the customer can sometimes be overlooked in favour of the product and price. But retailers must be reminded that customer attitude and behaviour is central to a thriving business.
‘I want it my way’
One area that is currently a ‘hot topic’ for research are the trends in the way customers are buying and receiving their goods. All current insight into consumer attitudes reveal an increasing demand for convenience, which means only one thing: an increase in ‘virtual’ shopping.
Last year, the BRC itself reported that there was a 19.2% growth in online purchases compared to the same period the year before. This market is predicted to be worth £45bn by the end of 2014, which has increased from almost £39 billion in 2013. That is a sizeable industry shift!
Call it what you will – virtual shopping covers e-commerce, e-web-stores, e-shops, e-stores, Internet shops, web-shops, web-stores, online stores, online storefronts or virtual stores. And let’s not forget m-commerce. The point is, virtual shopping is giving customers the kind of convenient platform they want. And the immediacy of online shopping is matched by consumers expecting convenient and flexible dates and times for their purchases to be delivered.
But of course, the only way that retailers can capitalise on this growing trend is by having the right supply chain and logistics set up to meet customer demand for delivery options.
‘We called to deliver your parcel, but you weren’t at home…’
Of course, straightforward delivery services have been in operation since the ‘80’s. But with the rapid growth of e-commerce, many retailers’ logistics operations are just not up to scratch – in terms of reliability, convenience or cost. Figures recently released from the supply chain company JDA, reveal that nearly one in five (19%) of UK consumers have experienced problems with home deliveries over the last 12 months. Of the 3,139 people interviewed by JDA, 35% suffered from late deliveries; 28% missed deliveries, despite being at home; while 26% did not receive their goods at all, despite the retailer stating otherwise!
To overcome these problems, many consumers are turning instead to ‘click and collect’ for their virtual shopping orders. While customers are already enjoying the ability to collect in-store, the option of collecting your purchase any time – day or night – the ultimate convenience purchase, has huge potential.
In fact, ‘click and collect’ is one of the fastest growing delivery services in the UK. The idea is simple and efficient: consumers pick up their parcel from a locker at (an allotted) destination of their choice. The number of UK shoppers using ‘click & collect’ is poised to more than double by 2017. Currently, 35% of online shoppers in the UK buy online and self-collect, compared to 13% in the US and 5% in Germany. And within the next three years, this figure is set to increase to 76% of online shoppers in the UK.
It is little wonder that there is such a soar in ‘click and collect’ take up: according to IMRG statistics 56% of UK consumers are not at home, even on Sunday, during normal delivery hours. But with ‘click and collect’, lockers are located at stations, petrol forecourts, outside local shops and retail parks; so the idea of being able to pick up your parcel at your convenience, be that on the way to work or when you do the weekly shop is an attractive option. The lockers are all installed in well-lit locations and constantly monitored by live CCTV cameras to provide maximum consumer confidence. All this clearly meets the convenient shopping experience consumers demand, with the added benefit of increased confidence in the delivery process and security of the network. Ease of purchase. Ease of delivery.
At InPost, we’ve been working with major retail names such as ASOS across the UK to meet the growing needs from consumers. We’ve recently revealed plans to open lockers at several London transport sites, including Victoria Coach Station and Buckhurst Hill Underground station, following a partnership deal with Transport for London. This ensures our customers have the opportunity to collect parcels as part of their daily routine. With this in mind, we are looking to install at approximately 40 further sites with Transport for London over the next few months. We have also agreed locker sites at various Morrisons locations.
Strategically, we have thought long and hard about the needs of different consumer profiles – those on the move, those at home and those with hectic lifestyles – developing an appropriate deliver mechanism for each.
This is just the start…
It is clear that the growth in virtual shopping will continue to offer new challenges and opportunities for the retail industry. But the real pressure will be on the retailers to scale their operations to meet the demands of the consumer. If the 2014 online savvy customer demands the convenience of same day or next day delivery, ‘click and collect’ will become an increasingly popular choice for many customers and retailers in the future.