Just how important is the quality of home delivery services? It might seem blasphemous even to raise the question – it’s obvious that it plays a vital role. I can produce reports that highlight the critical nature of delivery quality. DHL Supply Chain has just commissioned a study by think tank FreshMinds which warns that many retailers are failing to get fulfilment processes right to deliver on the service promises of their new web sites.
“For example, while 45 per cent of retailers identify stock availability as the most serious issue they have faced over the past year, only 24 per cent have most heavily invested in making improvements to stock control,” it says.
You can add to this the study by IMRG earlier this year, “Valuing Home Delivery”, which found that current levels of delivery inefficiency add 70p to the cost of every parcel dispatched and 75p for every delivery.
For every one per cent improvement in first time, on-time delivery performance the UK e-retail industry can recover at least £65.2 million in costs, the IMRG report calculated.
Impressive figures, but do they affect the priorities of the retailers?
Those old enough to remember the early days of the overnight parcels market might recall that the growth rates were huge. So huge that some express operators didn’t feel the need to worry too much about delivery quality. After all, upsetting one customer wasn’t too much of a problem when half a dozen more were queuing up to use the service.
Is there a parallel with online sales, which are still growing like topsy? The latest IMRG Capgemini study shows that UK shoppers spent £4.5 billion online in May – 22 per cent up on last year. If your business is growing that fast, how much are you going to worry about fine tuning your delivery operation?
It is understandable that some retailers might see the priority as continuing to drive growth – looking to attract the next customer rather than worrying about the one that got away.
But, customers are fickle creatures – and it is easier to be fickle in the online world than almost anywhere else. Delivery is an integral part of the customer’s experience. Ultimately, the quality and value of the service will play a role in differentiating between those who succeed and those who fail.
Malory Davies FCILT,