The importance of diversifying your e-commerce delivery offering
Back in the beginnings of the UK’s lockdown, when shops were shuttered with immediate effect on 23 March, Nick Wells, Parcelhub’s Group CEO wrote to the government stressing how e-commerce – and e-commerce delivery in particular – were from that moment a lifeline for both consumers and retailers.
In the grips of the global coronavirus pandemic, e-commerce has never been more vital and how to get the goods out to consumers has become the crucial part of the new e-commerce world we all find ourselves living in.
And this has showcased to all retailers just how vital it is to diversify delivery and supply options – certainly right now in the new world we live in, but also going forwards post-coronavirus when the world will continue to be a very different place.
Habits changed for good
The shutting of stores has, of course, forced the majority of consumers to start to shop online. According to a fortnightly consumer behaviour tracker from RetailX, 89% of consumers have now stopped going to stores altogether during the lockdown in the UK. The tracker suggests that shoppers almost immediately changed their behaviour around shop visits following lockdown on March 23 – and have not really changed since.
What has changed, however, is the number who say they will continue to shop as they do now. That has steadily risen to hit 43% by the end of April, from 37% on April 22 and 29% on April 8. Now, some 50% say they will continue to shop as they did before the pandemic, a figure that has steadily declined over the past eight weeks, from 54% on April 22 and 68% on March 25.
So, shoppers are now online-centric and are going to stay that way. This means that the changes to operations that retailers need to implement today to service the lockdown masses are set to have to stay in place and will, over time, become solid competitive advantages.
Delivery diversification
Under pandemic conditions, the ability to have a wider pool of delivery companies available to fulfil the increasing load of deliveries the switch to e-commerce has ushered in makes perfect sense. However, this was a trend that was already developing before the coronavirus forced e-commerce’s hand.
Research undertaken by Parcelhub at the end of 2019 found that consumers were already choosing retailers based on their delivery options and delivery convenience.
In a white paper published by the company in February of this year, 66% of consumers said that they already had chosen an online retailer based on their delivery options and that driven by this, 70% of merchants had worked with multiple carriers to make it happen.
What is driving this isn’t necessarily speed nor delays to delivery, but that consumers want to know when they can have the goods and if that can be at a time that suits them. These days, while ‘next day’ is still an important delivery option, it is more picking when they can have it that shoppers want.
And retailers need to get it right. “Delays aren’t the problem,” James Hayes, business development director at Parcelhub recently told a Linnworks webinar. “The problem is over-promising and not delivering when you say you will. This leads to many calls and emails that cause time consuming intervention by retailers and shippers to put right and can damage brand and put customers off using you again.”
James Hayes believes that while a diversified, multiple carrier strategy helps offer the kinds of delivery options consumers want, for retailers and merchants it allows for promises to be kept and delivery to be better managed.
“The key is to focus on the orders that look like they will go wrong and the WISMO – where is my order? – queries that are likely to arise,” says Hayes. “If you can look at which orders could go wrong or are going to go wrong, then you can act in advance. This saves time and money by reducing friction, reducing returns, reducing complaints and minimising churn.”
New channels, new deliveries
While more people than ever are shopping online – not least under the lockdown – they are also looking at new ways to shop on the web. New channels such as TikTok are starting to compete with all other social media channels that have already seen the opportunities are marketing – and even selling – platforms.
They also compete with marketplaces such as Amazon and eBay for attention, as well as merchants’ own websites.
With all these channels available, retailers need to be ready to embrace them all – there is no point shying away from it, your customers are going to be on all these channels, so to reach them you must be too.
“The coronavirus has really shown us that you need to diversify where you sell,” says Stuart Conroy, founder and owner of Activ8, an e-commerce marketplace management specialist. “The challenge is getting it all to work together and avoid siloing teams and tasks around platforms and to automate as much as you can. Trading online is largely made up of many small tasks and a few large ones. Automate the small data-driven tasks and you can focus on the bigger picture.”
What this means in reality for delivery is that orders are going to arrive from multiple sources. Of course, this diversification of sales channels mitigates risks – such as, say, Amazon deciding to focus on essentials, thus making it hard for non-essential Amazon traders to get their orders out in a timely way – and allows you to manage what you sell.
But it comes with an enormous challenge on the delivery side: how do you manage all those orders from different places?
“Keeping delivery independent of channel,” says Chris Gates, Head of Technical Communications at Linnworks, “is vital. It shouldn’t matter which channel the order comes in on, it should just go to fulfilment to be fulfilled along the terms under which it was ordered.”
This is where handing over fulfilment and shipping to a third-party that can run a roster of multiple carriers again holds the key in the new e-commerce world. Having the ability to ‘hot swap’ carriers to make the delivery work is one vital tool that this diversified approach brings.
“For example,” says Gates, “you can set up a generic postal option, say ‘expedited delivery’ in the order management system and it will then make sure that a carrier within the fleet of carriers available, delivers it as promised.”
Data is all
This is true diversification of e-commerce delivery and a strategy that makes any multi-channel e-commerce business viable. It is how any merchant can sell on their own site, multiple marketplaces and even through social media to best effect and reduce friction, complaints and churn, all while managing expectations no matter whether we are embroiled in a global crisis or not.
However, the only way this works is through data. Order management systems that integrate with delivery management systems are key – and that is harder to pull off than you might imagine.
“Something as simple as the words used for each order can make this fail,” warns Linnworks’ Gates. “One platform may use the word ‘fulfil’ and another ‘ship’ to mean the same thing. An automated system may not be able to see that they mean the same thing and so one or other may fail.”
Likewise, orders that need to be expedited from all platforms need to be funnelled that way, which means that systems that talk to one another need to be, literally, speaking the same language.
The same applies to stock management and even back up the chain to suppliers. Many online retailers of size may well want to have several suppliers of the same item to ensure continuity of availability. This all needs to be managed from the delivery side, right back through ordering and out to stock ordering.
It isn’t hard to do, stresses Gates, but you need to be aware that you need to do it and make all these systems talk to one another if you want to operate a truly diversified e-commerce model.
In conclusion
Despite the coronavirus, e-commerce was increasingly becoming a cornerstone of modern retail – the lockdown has just sped up the switch to online for many more consumers. The challenges of being competitive remain the same.
And one of the areas where early adopter e-commerce sellers were already focussing was on delivery. Getting the goods to the consumer either with great speed or, increasingly, at a time and location of their choosing, has become what makes shoppers choose one online retailer over another.
To make this happen, retailers have had to rethink how they run fulfilment and are increasingly opting for third-parties that can manage a roster of many carriers so that delivery options are flexible for the consumer, but also give the retail the ability to ‘hot swap’ carriers as demand changes on the fly.
To make this happen, order management and logistics management has to work hand in hand with the variety of marketplace, social media platforms and retailer websites currently in play. As with everything in the digital age, that relies on data – and making sure that all systems are talking the same language.
While the global coronavirus pandemic has made this more of an imperative, investment in it now will not only pay off in the short term but will underpin all retail business into recovery and beyond.
As the ‘curve flattens’, and the health of the population improves, now is the time to medicate the world of online delivery and make it ready for what lies ahead.
About Parcelhub, where proactive delivery management comes as standard.
Parcelhub is a bespoke multi-carrier delivery management and proactive tracking support solution. Flexible and scalable, its unique portfolio of services integrates seamlessly with marketplaces, e-commerce platforms and order management systems, providing hundreds of multi-channel retailers, global brands and wholesalers with one access point to 20+ carriers and 600+ delivery options.
Distributing more than 6 million parcels on its own carrier contracts every year, Parcelhub’s free multi-carrier shipping software grants hundreds of national and global businesses access to 'pooled volume' discounted rates from its carefully selected range of carrier partners, including Yodel, Hermes, DPD, DHL, UPS, DX, Parcelforce, CollectPlus, SkyNet, ArrowXL, Interpost, Panther Logistics, Direct Link and Palletforce.