The Future of Retail Delivery

The retail industry is not only evolving quickly, it is doing so at a faster and faster rate of change. It is also becoming increasingly clear that as the percentage of sales from online purchases and other channels increases, the role of logistics becomes more and more critically important and central to the retail and brand experience.

We've gathered some recent research and information to help retailers navigate the constantly changing retail logistics landscape.

Consumer attitudes are changing, consumer shopping behaviors are changing, and technology is changing. And they’re all about to come together to change the face of retail delivery as we know it. Which means that the logistics world needs to be prepared.

Here are our top five predictions for what the future of retail delivery will look like:

• Retail delivery will become cheaper and quicker for the consumer.
• Retail delivery will become more local.
• Retail delivery will be managed by voice control.
• Retail delivery will boom with new technologies.
• Retail delivery will offer an omni-channel experience.

We take a closer look at the top five predictions for the future of retail delivery below, and what that then means for the world of logistics.

WHAT THIS MEANS FOR THE WORLD OF LOGISTICS

Any retailers that have the profit margins to offer free delivery, should offer free delivery. Whether that’s for orders over a specific amount like £10, for set time periods or if consumers buy two items or more, free shipping can help to convince consumers to complete purchases, and increase sales. And if offering free shipping isn’t an option, then testing a low delivery fee between £2 – 4 could prove to be an effective strategy.

Last-mile delivery is making offering quick deliveries difficult, because four things need to be in place to do so: products need to be available locally, retailers need to have a real-time view of their inventories, finding and packing of the product need to be speedy, and last-mile logistics providers need to be able to pick up and deliver orders ad hoc or multiple times throughout the day. If logistics retailers and logistics providers can work together to tick these four things off, then McKinsey says:

"Same-day delivery turns into a pure game of scale."

McKinsey & Company

Big eCommerce giants like Amazon offer repeat customers Amazon Prime, a delivery subscription service where consumers pay £79 a year or £7.99 a month for free One-Day Delivery, Priority Delivery, Standard Delivery, Same Day Delivery and more. Consumers are happy to pay Amazon Prime’s delivery subscription fee in exchange for speedy deliver times.

Payment service providers like Klarna are offering a try-before-you-buy payment structure – offering customers an order now, pay after delivery solution. If you’re like asos and KNOMO, and you offer free delivery, this means consumers can order items (up to a certain amount) through Klarna, get it delivered for free, and try the item on at home before committing. They can then decide to either pay for the item 30 days after shipment, or send it back for free.

RETAIL DELIVERY WILL BECOME MORE LOCAL

Thanks to the rise in mobile usage and the immediate internet access this has given consumers, searches for purchasing influencers like stock information, offers and opening times are becoming more focused on location.

Google says words like “near me”, “closest” and “nearby” are becoming more common in Google searches, with 30% of all mobile searches related to location. And, of those consumers searching locally on their smartphone, 76% visit a store within a day, and 28% of those searches lead to a purchase within a day (Think with Google).

WHAT THIS MEANS FOR THE WORLD OF LOGISTICS

Local searchers have high purchasing intent, and logistics providers and retailers need to work together to make sure warehouses are well-stocked and close enough to stores to help deliver reserved items and orders, and to keep stores in constant supply of in-stock items.

Retailers like Argos offer ‘Check & Reserve’ to consumers looking for a particular item in their local store, and give them the option to reserve their item without payment, where they’ll then complete the purchase by the end of the next working day. They also offer Fast Track reservation online, for same-day, in store pick-up and delivery on 1000s of items. If items are out of stock in the local store, then consumers can ask for an alert to let them know when the item is available for purchase at their local Argos – helping the retailer recapture the local buyer’s purchase intent. Logistics providers need to be setup to travel between branches to locate products, and retrieve stock from warehouses that are located further away.

RETAIL DELIVERY WILL BE MANAGED BY VOICE CONTROL

Voice search will play a big part in the consumer purchase journey, and the logistics fulfilment journey. Walker Sands polled over 1,600 consumers and found that 19% have already made a purchase using a voice-controlled device in the past 12 months. The poll results also suggest that voice search is more of a channel for millennials, with 37% saying “they ‘always’ or ‘often’ shop online via voice-controlled devices”, and 43% have made a purchase using voice in the past year.

WHAT THIS MEANS FOR THE WORLD OF LOGISTICS

If consumers are making purchases via voice search, they’ll likely expect the rest of the purchase funnel to also offer a voice search option. Which means that logistics companies need to optimise their delivery updates and returns processing to integrate such voice search technology. If a consumer wants to know where their order is, and they ask their voice assistant, logistics companies need to respond via voice.

Logistics companies will be able to use voice search to help them manage deliveries, plan delivery routes, schedule deliveries and assign delivery runs to drivers. This kind of automation could also help to cut back on logistics operational costs.

RETAIL DELIVERY WILL BOOM WITH NEW TECHNOLOGIES

Makeup retailers like L’Oréal are already using apps like Makeup Genius to let consumers virtually try on makeup before buying, and more brands like Sephora and Charlotte Tilbury are following suit. 

Ted Baker already experimented with a virtual reality digital concept store in Shoreditch, giving in-store visitors a look at clothing items in closer detail and a chance to play games or watch films and interact with the Ted Baker surroundings.

Augmented and virtual reality make it easier to virtually do things like try clothes on for size, and see how large consumer devices might look in the home. The sense of not being able to see or touch an object will become less of a problem, and that will help to reduce buyer hesitation. With an easier product journey and fewer obstacles, technological advancements will help to facilitate more online orders.

WHAT THIS MEANS FOR THE WORLD OF LOGISTICS

Logistics providers should also take advantage of augmented and virtual reality technology to help meet the increasing number of online orders, and transform the world of logistics.

Augmented reality can help logistics providers better plan warehouse layouts to make finding orders easier, and it can also help workers locate packages ready for shipping. And augmented reality can also help make final mile delivery easier for drivers, helping to pack lorries and navigate to destinations (read more on augmented reality and how it’ll transform logistics in Supply Chain 24|7.)

A more realistic view of how items of clothing, makeup and jewelry will look for consumers should, in theory, offer a realistic and decisive shopping experience – helping to reduce the number of online orders being returned.

"Logistics providers like SEKO are already researching and implementing new technologies into the process. We deploy a 3D load optimization software for inbound containers for optimized stock replenishment. We don't see drones launching at scale in most major markets for final mile deliveries, but we are actively researching drones for within the four walls of the warehouse for more optimal picking of low-turning SKUs on the highest, out-of-reach shelves."

Brian Bourke VP Marketing at SEKO Logistics

RETAIL DELIVERY WILL OFFER AN OMNI-CHANNEL EXPERIENCE

Consumers are creating and managing orders and returns across channels, and retailers will need to offer a consistent customer experience at every touchpoint.

From chatbots to email, social media, phone and more, channels need to be working together and saying the same message to help generate orders and offer the best customer experience.

Retailers need to be working with logistics providers to make sure they’re saying the same message and offering the same customer experience to help generate more orders for their retail partner.

WHAT THIS MEANS FOR THE WORLD OF LOGISTICS

The omni-channel shopper needs an omni-channel logistics solution.

By working with retailers and offering visibility across communication channels, and offering real-time fulfilment options to help their customers and decide on the best fulfilment location, logistics providers can be sure orders will arrive at the right place, at the right time.

And, because retailers will need to share information with logistics providers to offer an omni-channel experience, both parties will need to make sure they’re keeping customer data safe with a cryptocurrency technology such as Blockchain Technology.

Imagine a logistics world where “Every time a product changes hands, the transaction could be documented, creating a permanent history of a product, from manufacture to sale. This could dramatically reduce time delays, added costs, and human error that plague transactions today.” (Supply Chain 24|7).

"Consumers are becoming increasingly savvy online, and providing consumers with all the information upfront including delivery and duty costs and delivery dates (rather than service level). All this can equate to lower abandonment rates, higher sales and success in the changing retail landscape."

Brian Bourke VP Marketing at SEKO Logistics

SEKO is already using technology solutions like Interactive Voice Response (IVR) for automated outbound calls and delivery scheduling, and immediate proof of delivery via an app to respond to changing consumer behaviours.

Take a look at our retail services and find out how you can continue to offer your customers the best delivery service.