Deliveries in the future and what they will look like

BY Australian Retailers Association
21 May 2020

If the last decade of retail has taught us one thing, it’s that evolving consumer expectations will continue to innovate delivery and returns solutions for years to come.

The only thing that doesn’t change is change, and a decade in retail is no exception. A decade ago, some of Australian retail’s current household names didn’t even exist – think Showpo, The Iconic, Temple & Webster, and Afterpay.

As eCommerce has grown, so too have consumer expectations around deliveries and returns. A same-day delivery offer ten years ago would have seemed a farfetched concept, yet today, while not quite ubiquitous, it is much more commonplace.

Adjacent industries have contributed to these expectations. Disruptor brands like Uber, Deliveroo, Netflix, and Spotify have drastically changed the way customers expect to transact. They’ve designed products and services to be seamless and instantaneous. Retail’s benchmark is no longer other retailers but other digital experiences.

At the dawning of a new decade, what might be the new delivery and returns norm when we look back in 2030?

Home delivery becomes a premium delivery option

Growth in eCommerce means growth in parcel volumes; this is obvious. However, there is only so much space for home delivery to grow, with a finite number of delivery drivers and a finite amount of road capacity to handle the increased volume.

Enter consolidated deliveries via click & collect and third-party pick-up options, which will play a more significant part in the delivery landscape over the next decade. This will result in-home deliveries becoming a premium offering, offered only to high-value customers or available to any customer but at additional cost. Delivering 50 parcels into one location instead of 50 individual homes is not only more efficient but also more environmentally friendly.

As environmentalism drives a higher proportion of consumer purchasing decisions, our delivery options will also have to meet higher environmental standards. Australia Post has already begun investing in this area for customers via the launch of the Australia Post Collect & Return service earlier this year. This adds supermarkets, pharmacies, department stores, shopping centres, and banks to its 3,500 strong retail store network to enable consumers to pick-up (or return) their online shopping from a place that suits them.

Free & fast delivery funnelled into click & collect

“Free delivery” had unprecedented success for retailers in the last decade in terms of checkout conversion; however, it came at a substantial cost. The next iteration of fast and free fulfilment will focus on driving consumers into stores by offering fast and free click & collect.

For in-store click & collect to be fast, retailers will need to invest in digitising their click & collect experience in-store, abandoning the manual and paper-based systems that may have got them by in the past. They will also need to have robust inventory data, enabling better stock utilisation and strengthening net promoter scores (NPS).

Returns data becomes a new source of truth and profitable insights

The last decade saw retailers focus primarily on maximising sales by optimising conversion and acquisition. Consequently, the analysis was abundant in the impact of delivery options, payment methods, page loading time, imagery, and layout on checkout conversion. By contrast, returns were seen as a nasty side-effect of eCommerce success, and the prevailing view was that if you made returns difficult, you could reduce the number handled. What this failed to account for is that 41% of consumers have stopped shopping with a retailer following a poor returns experience.

As we enter the next decade, the technology exists to help us understand the underlying data behind returns, to reduce returns without penalising customers. Australia Post is leading again. They have launched a new free returns portal, which enables merchants to start collecting returns data to make more informed business decisions.

Retailers should ultimately be looking to capture returns data to identify problems with products, sizing, imagery, and fraudulent customer behaviour. From there, it’s about using data to orchestrate how a return is processed and when it is received back to the distribution centre or 3PL. This allows retailers to streamline operations so the warehouse can focus on processing high demand or high-value products first, and low value items can even bypass the warehouse entirely and be delivered straight to charity.

Change is a constant that serves to keep us on top of our game and forces us to innovate. A new decade will bring new technologies to drive better delivery and returns solutions that are more efficient, more environmentally friendly, and drive better outcomes for merchants and consumers. Luckily, in amongst all this change, we have the learnings of the last ten years to guide us to continue to delight customers and build and grow truly successful Australian retail brands.

About Doddle: Doddle (Doddle Parcel Services Ltd) is a fulfilment technology company that enables retailers to offer a seamless click & collect in-store returns, and fulfilment from stores.

This article can be found on page 6 of The Retailer magazine. See here: https://online.flippingbook.com/view/888290/6

 

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ABOUT THE AUTHOR

Australian Retailers Association

Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association representing Australia’s $320 billion sector, which employs more than 1.3 million people. As the retail industry’s peak representative body, the ARA works to ensure retail success by informing, protecting, advocating, educating, and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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