Unpredictable customers force the world of logistics to become more sophisticated
4 min read
31 March 2017
Britain is a world leader in ecommerce, but it leaves many retailers with a challenge: how to put goods in the hands of the consumer. Traditionally, shoppers are left with little idea when their TV or dishwasher would show up. This is forcing the world of logistics to transform.
In fact, I do believe most of us know someone whose parcel has been left in a supposedly “safe place” like in a bin, or in the case of Yodel, on someone’s roof. But the world of logistics is changing as customers demand better service. New entrants are also vying for a slice of the pie, and the old guard are having to up their game to remain relevant.
In ContactEngine’s latest research, it was suggested that 41 per cent of Brits prefer 5pm-9am delivery slots rather than the traditional 9am-5pm – companies failing to cater for this demand will quickly lose market share. For couriers to stay relevant, they will need to invest in more sophisticated technology to live up to customer expectations. Moreover, this will create some extra added value they can charge retailers for.
But it’s not just the delivery times that makes today’s customers demanding, they also expect their parcel to be delivered immediately – without any delays. In 2015, Amazon launched its same-day Prime Now service, which promises to reach you within one hour in central London; a few months later, Argos jumped on the bandwagon, announcing a same-day service that covers most of the UK.
Although I agree that same-day delivery is set to dominate the world of logistics over the next few years, it’s not a simple question of speeding up existing processes; we need to start over. Traditional delivery firms like DPD with “hub and spoke” systems simply cannot get a product from warehouse to consumer in just a couple of hours – it’s virtually impossible as in order for this to happen, you have to have the product close to the customer; which is why Amazon’s one hour delivery is restricted to one area…for now.
One of the main issues that transpired from our recent study was that 40 per cent of Brits said they’ve missed up to 20 deliveries within the last 12 months – that’s a lot and something that’s costing the world of logistics a huge amount of money. Unfortunately, the crux of the matter is that some people are always going to be out of the house and perhaps, this is why we need to introduce improved tech in the form of smartphone tracking, or similar, allowing couriers to communicate with customer is a much better, and more straight forward way.
It’s worth pointing out that missed deliveries have long been a problem and although we’ve seen a lot of money and innovation going into the industry, before taking things further, companies need to ensure that customers are willing to pay for these improved services.
Traditionally, most companies offered free delivery as standard, leading to a race to the bottom in service. However, as things have changed and we’re now a nation of inpatient unpredictable customers, delivery has now become a product.
While logistics firms have a big appetite for change, success depends on convincing consumers that delivery is something worth paying for, the change need to come from within the industry, providing customers with practical solutions that will cater to their busy lifestyles.
Dr Mark Smith is CEO of ContactEngine. Having always worked in communication, Smith has helped numerous businesses to find new and simpler ways of getting messages to and from their stakeholders in a digital world. His last business floated on the London Stock Exchange with a market cap of over £100m.