The rapid growth of ecommerce over the years is showing no signs of slowing, with online sales due to account for over 50% of retail sales over the next decade. Within the UK, online spend is predicted to increase 29.6% by 2024, with more than 50% of UK consumers now choosing to shop online over the high street.
With this rise of online shopping also comes increased demand from consumers that need what they want, where they want it, at a time convenient to them. This adds significant pressure to retailers to offer seamless and cost-effective delivery (and return) options so they can meet consumer demand. In order to achieve these frictionless processes, transparency, collaboration and end-to-end visibility of all supply chain components are critical.
The bar is set even higher when it comes to seasonal perishable goods, such as food and flowers that all have to be delivered on a specific day. And when these coincide with managing peak demand for national days or holidays, such as Valentine’s Day, Mother’s Day and Easter, achieving a seamless delivery process may seem like an insurmountable challenge.
Customer purchase experiences have improved in recent years, as retailers have invested in solutions to achieve high-quality customer interaction. Yet, the delivery horror stories continue. From the parcels left in supposedly ‘safe places’ such as wheelie bins or recycling boxes and emptied before being discovered by the customer, to deliveries that arrive on the wrong day, with no notification, the ’signed for’ items left on the doorstep and items delivered to the wrong address.
Many retailers that use a third-party logistics (3PL) provider for delivery, will shun their delivery responsibility, blaming it on the provider instead. Yet, for the customer, every aspect of the entire experience, be that positive or negative, is reflective of the retailer. A company that is not effectively managing its delivery model, be that internally or using 3PLs, but is choosing to invest in a ‘frictionless’ customer experience is essentially misunderstanding the concept of seamless, frictionless retail. For frictionless retail to be a success, retailers must take ownership of every part of the experience; all the way from the first interaction, through to delivery and, if necessary, the returns process.
With so many disparate parts of the supply chain, historically it has been a challenge to unify this sort of optimisation from the initial collection from the manufacturer or distribution warehouse, all the way through hubs and cross docks, to the last mile of the home delivery process. But the application of technology – such as intelligent routing and scheduling solutions – now enables real time oversight of the entire supply chain, allowing organisations to capitalise on up-to-the-minute data – maximising sales, driving efficiencies and improving the whole customer experience.
Route planning software with continuous background optimisation based on virtual real-time delivery capacity information and proposed route information enables retailers to transform the delivery options they can offer customers. Instead of the standard ‘same day’, ‘one day’ or ’three day’ delivery options with associated differentiated price points, retailers can leverage real-time capacity insight and intelligent algorithms to offer delivery options and prices that reflect actual delivery capacity available – and incentivise certain delivery slots with price.
Not only can this satisfy the customer demand, but also encourage customer behaviour to support specific goals – such as reducing emissions. With real time information, 3PLS can share deliveries to improve the experience further, using routing to avoid congestion, reduce inefficiencies and lower emissions. Those retailers that are able to connect all parts of the end-to-end supply chain through effective utilisation of virtual real-time data will win over new customers, keep existing ones loyal and maximise profits.
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Andrew is Head of Marketing at Descartes Systems UK Ltd and has over twenty years’ business-to-business senior marketing management experience with high technology solutions (hardware, software and services) in complex business-to-business markets that includes logistics and transport with organisations such as Intel, Securicor, Unipart Technology Logistics and Orange.