CMO insight: Why there’s no future for home deliveries in retail
Towards the end of 2016 it was publicised that Amazon has filed a patent for giant airborne fulfilment centres (The Guardian, 2016). These would take the form of airships stationed above metropolitan areas that could fulfil items delivered to people below by drones. These mobile centres could be moved wherever demand dictates – being stationed above stadiums for merchandise or docked above cities at peak times such as Christmas.
It sounds like something straight out of a science fiction novel but it’s where retail is heading. And the reason for this is because Amazon have realised that home deliveries simply don’t work – they’re inefficient, costly and all too often don’t meet the expectations of the customer. Mail statistics suggest 12% of deliveries fail the first time and the inconvenience of home delivery is one of the major reasons why we still prefer to shop on the high-street (PC & Tech Authority, 2016).
Modern life is just too busy for home deliveries – we’re rarely at home and when we are, we spend the majority of that time asleep (Bureau of Labour Statistics, 2016). Most of us still work from somewhere other than our home or we’re all busily moving from one place to the next. In an age of the smartphone where it’s accepted that we market to consumers on the go, it seems bizarre that at the end of the journey retailers insist the customer must remain static.
The truth is that the system is broken. Home deliveries are an inconvenience and we’re failing the customer where it really matters – at the very end of their journey with us. So much effort is placed on our websites and marketing but so little investment is made in the customer actually getting the goods in their hands. But why is this the case? Because many retailers are working with supply chains and logistics that aren’t fit for online orders – they were set-up to service stores, and retailers are now struggling to adjust to the digital world. It’s the reason that the few miles to our house are archaic – scuppered by inefficient couriers and irritating slips dropped through doors saying that you just missed the knock on the door.
And that’s just the logistics – home deliveries are falling short of customer expectations in more ways than one. When we order online it’s because we want something quickly and the majority of home deliveries aren’t quick enough. In a recent survey 56% of millennials said they expected retailers to have the option of same-day delivery but most don’t (Multichannel Merchant, 2015).
Retailers have tried to alleviate the situation by offering click-and-collect but that still means consumers have the inconvenience of traveling to the shops and the cost of parking. Click-and-collect is simply the MP3 of shopping – an ‘in-between’ solution that bridges the gap whilst we wait for a better one to come along, like music streaming has.
The future of deliveries is not home and it’s not the high-street or retail park – it’s on the go. It’s a world without outdated and inefficient warehouses which distribute goods to fixed destinations.
Smart retailers will make their delivery services more responsive to consumer demand using people who are living the gig economy (similar to how Uber, Deliveroo and others have profited) to pick-up items from stores and drop the deliveries wherever they’re needed.
In the future drones deliveries will be the norm. Using the GPS tracking on our phones, they’ll be able to locate us wherever we are and deliver packages as you’re walking down the high-street or playing with your kids in the park. It means retailers will be able to deliver goods that we need now without interrupting our lives.
So when people ask what you can do better for the eCommerce customer, focus on your logistics and supply chain. One of the biggest opportunities to improve customer experience is at the end of their journey with you. Think bigger than next-day delivery or fast picking-and-packing times – think about how you can future-proof your entire business.
We’re not saying you should rush out and buy a fleet of drones now but we are saying you need to prepare yourselves for the future. Because before you know it they’ll be airships floating in the sky.