‘Sorry we missed you’ cards are a familiar sight on the doormats of online shoppers, but major developments in delivery services should mean more parcels arrive first time
By 2014, the UK online fashion market will be worth £6.1bn, accounting for 11.4% of total clothing and footwear spend, according to research firm Mintel. That’s a hefty increase on today’s £4.1bn market, and means millions more parcels will be winging their way to customers’ homes in the coming years. Big retail names including Zara and H&M are poised to join the world of ecommerce, so perhaps it’s not surprising that fashion retailers and their delivery fulfilment partners are working incredibly hard to improve home delivery service levels and meet shoppers’ rising expectations.
Spoilt for choice
Ecommerce solutions provider Snow Valley’s Ecommerce Retail Delivery Report 2010, published in January, showed that in a poll of 166 online retailers (including 65 fashion retailers), 64% gave customers a choice of delivery times and charges, up from 54% in 2005.
Sarah Clelland, marketing manager at Snow Valley, says: “Fashion retailers are getting more sophisticated when it comes to fulfilment, and trends we’re noting are increased use of text messaging and online order tracking, order deadlines getting later, and more nominated day and time-of-day options. We predict more ‘delivery loyalty schemes’ in the coming years too, with others copying Asos’s Premier service, which gives free next-day delivery and returns collection for £24.95 a year.”
Last year saw significant investment in distribution systems and fulfilment centres. For example, Asos spent £4.8m on IT, including an improved warehouse management system to cope with its growing business. And couriers like Royal Mail, Home Delivery Network, Hermes, and Interlink Express are investing in fleets and technology that will enable them to offer next-day delivery, named-day delivery, am/pm delivery, and two-hour window delivery slots.
“Fashion home delivery fulfilment is by far our biggest growth area, and there’s huge investment going into perfecting delivery,” says Sean Fahey, group IT and project director at logistics provider Clipper, whose 28 fulfilment centres are used by the likes of George at Asda, Urban Outfitters, Mint Velvet and Tesco Direct.
“Our retail clients are asking for nominated day delivery and more precise delivery windows,” adds Fahey. “In mail order’s heyday, customers settled for delivery in 28 days. Now they want their goods between 10am and 12pm tomorrow. Thanks to the latest technology and couriers offering new services, we’re almost there.” For Clipper, as orders come in with specific delivery requirements, its least-cost routing process works out which of its bank of couriers can provide the best service, taking into account postcode, weight of package, number of items, and price the customer is paying.
Costs to shoppers for precise delivery times are still quite high. French Connection is fairly typical, charging £7 for next-day Express Delivery. Ted Baker can deliver next day between 8.30am and 10am but it costs £12.50 compared with £5.95 for between 7.30am and 9pm. At House of Fraser, if you order before 1.30pm on Friday you’ll see your parcel arrive between 9am and 5pm on Saturday, but it will cost £20. Value options - presumably attractive to young fashion fans - include Asos’s offer of a Super Saver Delivery - £1.95 for delivery by Royal Mail within the next six days.
At John Lewis, where fashion accounts for a third of online sales, new initiatives to improve the customer experience are in the pipeline.
Carriers Royal Mail, Nightfreight and ParceLLink are used regularly by the retailer as well as an in-house fleet. “We realise that offering more precise delivery times and more choice for customers will underpin our success in ecommerce, so we’re innovating all the time,” says Jonathon Brown, head of online selling at John Lewis. “We are currently looking at am/pm slots and expect to be offering that in the next 12 months. If our customers express an interest in two-hour delivery slots, we’ll move towards that too.”
Innovations are happening all the time. GeoPost UK, which encompasses delivery firms including Interlink Express and Homecall, has just developed a new system that will narrow down delivery time to, potentially, a one-hour window. Using handheld devices with satellite navigation technology linked to Google Earth, delivery drivers can accurately sequence their delivery schedule, and text customers with the estimated time of arrival of their parcel.
Sorting out the ‘last mile’ conundrum isn’t the only option to multichannel fashion players though. Retailers such as Marks & Spencer, John Lewis, George at Asda, Aurora Fashions, Next and New Look have high hopes for in-store collection, known as click and collect. John Lewis says about 13% of its online orders over Christmas were picked up by customers in store, and Brown expects to see “huge growth” in this service.
John Lewis can offer free delivery into stores as its infrastructure already supports in-store pick-up, with existing collection points, trained staff and large daily deliveries across its stores, but other retailers are still incurring the costs of diverting couriers to stores and training staff to receive and hand over non-store purchases. Store systems often also need updating for such a service - New Look has just invested in new EPoS software in the form of BT Expedite’s Store 6 system, which will facilitate click and collect and enable customers to order goods in store.
Take your pick
Asda is developing an e-Catalogue to maximise multichannel opportunities and is installing Argos-style order and pick-up areas in stores, perfect for giving clothing shoppers access to the full range and sizes not on display. Doug Gurr,
Asda Wal-Mart executive development director, says 40% of Asda Direct shoppers would prefer to pick up from stores rather than wait at home for goods, especially as the service is free (for orders over £25). “We’re taking the Tardis approach, making use of small amounts of space to give access to more product,” says Gurr. “Giving customers a single, integrated way to shop is our aim, and the e-Catalogue could be the answer.”
Online shoppers want choice and convenience, but spelling out the small print around delivery can make web check-out pages incredibly complicated. Collection from a Next store for example requires a customer’s Next Directory account details, passport or utility bill, and a customer order number, and only established customers qualify to use the service. “The more delivery options you offer the more daunting your web check-out page can look,” says Fahey at Clipper. “Retailers must carefully balance offering breadth of choice with making the whole process look effortless.”
The cost of deliveries
- Only 13% of retailers have free delivery as standard, although 27% of larger retailers do
- 43% of retailers charge £4 or more for delivery, compared with 41% in 2005
- Only 10% of retailers charge more than £10 for a premium next-day service
- 64% charge less than £5.99 for delivery on a specific date
- Delivery at a certain time varies greatly - morning delivery, for example, costs from £3.75 to £15
- Saturday delivery is the most expensive service - 49% charge more than £10 for this
- The average charge for delivery to the US is £12; to France it is £8
- 39% offer free delivery if the order value is over a certain amount, up from 24% in 2005
Figures are for all retailers. Source: Snow Valley’s Ecommerce Retail Delivery Report 2010, January 2010; www.snowvalley.com/reports
M&S Shop Your Way
In July 2009, Marks & Spencer launched a new click and collect service called Shop Your Way, which allows customers to order either at home or in store and have product delivered to any store or their home.
The service was rolled out from 46 stores to 163 late last year, and Dave Hughes, director of the retailer’s home-shopping arm M&S Direct, says it will be extended further. He cites M&S’s small Canary Wharf store in east London as a multichannel success story. “Here, busy workers can shop online from the wider M&S catalogue and then nip into their smaller local store to pick up their purchase.” At larger stores, customers can browse the shopfloor, decide on a purchase and then get it delivered to their home. “We want to make our customers’ lives easier,” adds Hughes.
Participating M&S stores have special Shop Your Way counters, and staff have undergone training to ensure the multichannel transactions go smoothly. In December 2009 alone, M&S was receiving up to 40,000 orders per week through Shop Your Way, two-thirds of which were placed in store and the rest either online or via telephone. In its large Camberley store in Surrey, during the peak Christmas shopping week, a Shop Your Way order was processed every three minutes. Sales from the M&S website were up 29% for the six months to 26 September, 2009.