Electio's Andrew Hill spoke to Retail Systems about his predictions for "click and collect" in 2016; here, he expands on his views about the future of delivery in general for the year ahead.
No-one can say it hasn’t been exciting. The past 11 months in the delivery sector has seen everything we expected to happen – and plenty we didn’t.
From the launch of Argos’ same-day delivery service as the high street retailer stepped up its ecommerce game, to Amazon bringing its Pantry grocery delivery service over to the UK, retailers have continued to design delivery around demand.
Black Friday, most recently, has reflected a marked change in attitude from retailers. Asda’s announcement that it’s backing out of the shopping event shows the retail sector may have learnt lessons from last year and evolved their offering to become more than just a replica of their stateside siblings.
With UK shoppers splashing out one million pounds every three minutes on that single day alone last year - with sales totalling over £800 million, Black Friday was never going to have smoke without fire. Aside from all the failed delivery headlines the day had a detrimental knock-on effect financially. 2014, rather unsurprisingly, saw the weakest December sales growth both online and offline since 2008.
So, one year on, what technologies can we expect to see emerge or continue to be developed, and what will be the focus for consumers and retailers in 2016? Here are our predictions:
1. Growth in peer-to-peer
Let’s face the stats. There’s a delivery driver staffing deficit of 50,000. The number of vans on the road has increased by 17% this year. Retailers expect to send one fifth more parcels in the final three months of 2015 than the same period last year, with 860 million parcels set to reach British homes by the end of the year.
The UK’s delivery infrastructure simply can’t cope. And so 2016 will see the evolution of peer-to-peer delivery as we face a capacity issue that can’t be solved by putting more vans on the road. We need to look for answers to the problem of getting parcels from A to B using vehicles already on the move.
Amazon has already begun to invest in the technology, exploring the idea of crowdsourcing deliveries with its ‘On My Way’ app. Technologies like this – getting ordinary consumers to be part of the retail delivery chain – are taking off particularly well in the US and Scandinavia. We’ll see more of these initiatives in the UK in 2016.
2. Click and collect will expand
It’s taken five years, but we’re finally getting to the point where click and collect is almost ubiquitous in the bigger omnichannel retailers’ checkout processes.
Next year we can expect progress to continue, with more locations being added to the map and a greater focus on providing convenient local drop-off and pick-up points.
It will only be a true success when the locations are where consumers need them though. If customers are still having to drive into town, park and travel to retailers’ physical stores, then click and collect is often no more convenient than waiting in at home or work all day for the parcel to be delivered.
Asda’s ‘ToYou’ service is a game changer. We’ve seen Asda look beyond the fact that it is essentially enabling customers of other retailers to collect deliveries from its own stores. The company knows that it will likely see those customers end up converting into a sale at one of its own 614 supermarkets.
3. More variety in delivery services
Argos has really raised the bar with its same day delivery. Those customers who valued the speed of their delivery were always pretty loyal to Amazon Prime, but now there’s an option that can get their item delivered even quicker. Of course they’ll make the switch to another retailer if their expectations have been raised.
To keep up, retailers need to leverage what they’ve got. For example, timed delivery slots can be introduced into the click and collect process without any real changes to infrastructure. It’s about passing on information you’ve already got to hand, like expected arrival times, weather conditions affecting the delivery, or the number of customers ‘in front’ of them in the queue on delivery day.
If Amazon is already delivering to a small local newsagent three times a day, for example, then it should be possible for these customers to be told which of these deliveries their parcel will be on. There’s no point keeping them waiting till 5pm if their product is in store at 11am.
Not all customers want Saturday morning delivery – just like not all customers are interested in collecting their parcel from a locker. By offering as many options as possible, retailers can make sure no customers are abandoning their shopping carts due to their desired delivery choice being unsupported.
4. Increased focus on returns
The replacement of the Sale of Goods Act with the Consumer Rights Act in October has greatly strengthened customers’ rights – with returns in particular coming under the spotlight. Customers are becoming more aware of what the law means for them, and it’ll be impossible for retailers to overlook this next year.
Currently retailers either invest in providing a seamless and pleasant returns process, using the experience to drive loyalty – or they tend to shy away from the challenge . Those that turn a blind eye to returns will be forced to make more allowances, while those that see its value will already be looking at how to make the process even easier.
From the 365-day free returns policies of companies like Zappos and Schuh to ‘in-flight’ refunds, where the customer gets their cash back as soon as they’ve posted the item back to the retailer, to the trials of in-store printers for returns labels by some pick-up drop-off (PUDO) services – retailers are looking at all the obstacles that can be removed from the customer’s returns path.