"The No. 1 driver of shopping cart abandonment (aka lost market share) is extra fees applied at checkout (aka logistics costs).” - Retail Dive
As a consumer, it’s easy to overlook the complexities retailers must overcome to execute on delivering the right product to the right place, at the right time.
We’re so demanding.
We want retailers to exceed our expectations on providing the customer experience we’re entitled to. Perhaps not surprisingly, a large part of meeting this expectation boils down to delivery. At least for me, the last consideration I make before clicking “Submit Payment” always comes down to delivery.
Is there two-day shipping?
Is shipping free?
Can I pick it up in store?
How easy is it to return?
Because the decision to purchase weighs so heavily on the variety of delivery options available, traditional retailers are leveraging their store networks to introduce a number of fulfillment methods, such as:
- Buy online and return to store
- Buy online and ship from store
- Buy online and pick up in store
- Buy online in store
About 39% of retailers have merged the online and offline experience by offering ‘click-and-collect’ services and the ability to place online orders in-store. The evolvement of consumer expectations and an increase in online competition is, without a doubt, shaping the traditional retailer’s strategies.
While these last mile options may seem like a simple request from a consumer perspective, the reality is that it’s not as simple to execute.
It’s actually extremely difficult for retailers to master some of these order fulfillment strategies, especially while taking into consideration accuracy, efficiency and cost.
What makes it even harder is that traditional supply chains are not built to efficiently execute these types of orders:
“Logistics have also gotten significantly more complex. Shipping a single product directly to a consumer is much more complicated than shipping pallets of goods to a retail store.”
According to Retail Dive, efficiently managing all the nuts and bolts in the back-end to deliver on these expectations will either make or break your business:
“Over the next decade, the difference between the companies that thrive and those that fail will be which ones master the modern supply chain — and which don’t.”
Clearly, many retailers are still working out the kinks behind modern-day delivery expectations.
The benefits retailers will reap by leveraging their store networks for fulfillment is incredibly valuable—when done right. Doing so accurately can provide a competitive edge, and can help amplify the “seamless cross-channel experience” customers are now willing to reward brands for:
Not surprisingly, a few recent developments were announced this past week from some major players in the retail game on how they’re delivering on these expectations.
It looks like Walmart is taking their same-day delivery up a notch by partnering with a Parcel, a last mile delivery startup. Based out of a warehouse in New York City, Parcel specializes in delivering goods (both perishable and general merchandise) the same-day, overnight OR in a scheduled two-hour window.
Nate Faust, senior VP, Walmart U.S. eCommerce supply chain, stated the following:
“This acquisition allows us to continue testing ways to offer fast delivery while lowering our operating costs.”
On top of this, Walmart also plans to introduce Mobile Express Returns this November as an attempt to streamline the return process for online customers who use the Walmart app!
Basically, you can reference the transaction you want to return in the app, walk into your local Walmart, and quickly return the item in a designated Mobile Express Lane using your phone.
The refund is then credited to your account the following day. Easy peasy.
Daniel Eckert, senior VP of Walmart’s U.S. services and digital acceleration, explains the thinking behind this new return process:
“We know that returning an item and waiting for a refund, especially for a product purchased online, isn’t always seamless, so we’ve completely transformed the process for our customers – whether they are shopping in stores or at Walmart.com […] By leveraging our physical stores and the Walmart app, we’re changing the returns game in ways that only Walmart can do.”
This will supposedly make the return process less than 35 seconds long!
This U.K supermarket is trialing a 30-minute click and collect service:
“Customers will be able to order their shopping via a smartphone app and then pick it up from a store just 30 minutes later. It will make Sainsbury's the UK’s first supermarket to offer sub one-hour collection options.”
It may not be a 35-second return process, but hey, a 30-minute click and collect option sounds pretty appealing to me.
With companies like Blue Apron and HelloFresh (and let's not forget AmazonFresh) dominating the grocery delivery market, it was only a matter of time before this wholesale grocery retailer entered the arena.
Costco just announced their new two-day delivery service, called CostcoGrocer, which will provide a selection of about 500 items, including non-perishable foods and sundries.
Oh, and they’re also expanding their delivery partnership with Instacart, a same-day grocery delivery service, into new markets (they currently operate at 375 Costco locations).
Getting Fulfillment Right
Delivering on consumer delivery expectations is a huge part of the overall customer experience. Not only that, but delivering the product to your customer as fast as possible, as inexpensive as possible, while considering existing store inventory is a really tedious job for traditional retailers trying to leverage their stores. Businesses are forced to think outside the box in order to execute on order fulfillment effectively, in an environment where technology can rapidly change delivery expectations at the flip of a switch.
Who knows, perhaps delivery INSIDE our homes will become the new trend. ¯\_(ツ)_/¯