What can your business do to extend online delivery beyond the home?

What can your business do to extend online delivery beyond the home?

Monique Holtman

Monique Holtman
31st October 2018

The Internet has completely transformed the way we shop. Pretty much anything we want is now available at the click of a button and what’s more, with delivery times getting quicker and quicker, we barely have to wait for our purchases.

It’s this very convenience that has seen the popularity of online shopping rapidly increase over the years. While grocery shopping continues to dominate the online sales market, even the purchase of non-food items has soared over the past five years. Making up 11.6% of the total market in December 2012, by December 2017 this had risen to 24.1%[1].

The Royal Mail’s latest annual Delivery Matters report which surveyed 1,500 UK online shoppers about their shopping habits and preferences, found that over a period of three months, online shoppers made an incredible 80% of their purchases (excluding groceries) via the Internet[2].

Why exactly do we love online shopping so much, however? A number of factors have contributed towards the growth of this activity over time:

  • According to the Royal Mail’s report, the key reasons shoppers go online instead of in-store include choice (54%), the ability to compare prices (53%) and convenience (49%)[3].
  • It’s not surprising that choice features so highly on the list of reasons people prefer to shop online. If a shop doesn’t have your size you can look online or if you can’t find what you’re looking for on one website, you can guarantee someone else will have it.
  • Cost will always be a concern for consumers and the Internet gives us the option to shop around to ensure we get the best possible price. You can often find online discount codes too.
  • Online shopping offers convenience in so many different ways – you can do all your shopping without leaving the house, you don’t have to battle the crowds, it’s great if you don’t live near the shop you need and families no longer have to deal with the painful chore of dragging bored and crying children around the supermarket.
  • Online shopping is becoming increasingly advanced which is no doubt luring consumers in too. If you take Amazon Dash for example, you simply have a button you attach around the house, such as above the toilet or by the washing machine and this allows you to demand delivery of toilet rolls or washing powder whenever you run out.
  • Delivery times are getting increasingly fast. Next day, and sometimes even same-day delivery is becoming standard.
  • You can read reviews online before you commit to making a purchase, increasingly the likelihood that you’ll be happier with your choice.

No matter how far technology advances, however, it can’t change one annoying aspect of online shopping – having to wait in for your delivery to arrive. While some companies like DPD allow you track exactly when your parcel will arrive, not all companies use this courier which means that the majority of time, you’re left sitting at home all day waiting for your package to turn up.

By offering alternative delivery methods, businesses have the potential to attract so many more customers as the one thing online shopping has taught retailers is that convenience sells.

What are the alternative delivery options I can offer?

As online shopping has grown, the cost and speed of delivery have become a key battleground for businesses. The Royal Mail study also found that delivery is very important to consumers when making an online purchase, especially through sites such as Amazon and eBay. 84% of us will consider a seller’s delivery rating as a crucial factor when choosing where to buy from and one in four now pay for delivery subscriptions, which allow unlimited next day delivery on all orders within a pre-paid period. 

The managing director of Royal Mail Parcels, Nick Landon commented:

“Despite consumers tightening their purse strings, online shopping continues to grow. How you deliver is as important as what you sell and a quarter of shoppers are now paying an upfront fee for unlimited delivery. Businesses of all sizes need to make sure they respond to this demand or risk being left behind.”

Aside from traditional delivery methods, what are alternative ways you can get your products to your customers?

Click and collect

Click and collect allows consumers to buy goods from a website and then collect them from their local store. This has become such a popular delivery option, it has been estimated that usage will double by 2025 and generate an impressive £23 billion for UK retail sales[4].

This is a very convenient option for customers because it enables them to pick up their package at their leisure – they don’t have to worry about sitting at home waiting for their delivery which is ideal for busy workers or those who are often out and about. It’s also great because the majority of sites offer this as a free delivery option, which is guaranteed to appeal to price-conscious consumers.

Naturally, this option also presents many benefits to retailers. One of the biggest causes of cart abandonment is unexpected shipping costs. Because click and collect is usually free, this reduces the likelihood of a customer abandoning their purchase.

Returns are unfortunately a big part of online shopping and its estimated that almost half of all online shoppers returned at least item last year[5]. This represents a significant cost for retailers but when this is done in store, items can be added back into stock and sold quickly.

Perhaps the biggest advantage of click and collect is that it increases footfall into your store. This provides you with the opportunity to tempt customers with additional purchases or to blow them away with your customer service so they’re sure to shop with you again.

Amazon lockers

Amazon Lockers provides you with a self-service delivery location to pick up goods purchased from Amazon.co.uk. Lockers are currently available in a variety of locations throughout the UK and offer a fantastic alternative to getting something delivered at home or to the office.

Again, this allows shoppers to pick up their parcel at a time that’s convenient for them and also offers extra security to those who live in an apartment block and may be worried about packages going missing.

In a bid to be more environmentally conscious, Amazon started sending out deliveries without packaging at the end of last year. Unfortunately, this backfired as customers criticised the company for ruining Christmas because family members who took delivery could see their presents before their big day. Amazon Lockers allow consumers to make purchases without having to worry that the gift recipient will inadvertently see their present.

Royal Mail Safeplace

Royal Mail Safeplace allows its customers to nominate a safe and preferred delivery location for parcels to be left in their event that they’re not home. This could be anything from a shed in the back garden to a trusted neighbour and it ensures that parcels are delivered safely, even when the recipient is out.

This is a huge benefit to customers because it means that they don’t have to go out of their way to go to the Post Office if they miss their delivery. If your business uses Royal Mail as a courier, customers may be more likely to order from you knowing that they will get their package even if they can’t be home when it’s delivered.  

Should SMEs offer alternative delivery options to their customers?

Providing alternative delivery methods will no doubt require time and money to set up initially. Is it really worth the effort, however?

Many of the benefits of offering a wider selection of delivery options have been mentioned above including:

  • You can appeal to a wider audience
  • The more convenient something is, the more consumers are likely to do it
  • Options such as click and collect can increase footfall into your store and take out the hassle of returns
  • You can reduce the cost to consumers

Another huge benefit of alternative delivery methods is that you can meet the ever-increasing demands of today’s consumers. There’s no doubt that expectations for a seamless and multi-channel experience have heightened in the past few years. Ten years ago we accepted that if you ordered online, it could take up to a week for your order to arrive. Today, however, we often demand next day and sometimes even same day delivery. As a result, cart abandonment remains a huge problem for online retailers.

There are many reasons why someone may fail to follow through with a purchase but two of the most common are unexpected postage charges and a lack of convenient delivery options.

This is such an important factor for consumers that 95% of us would consider going to another retailer if their first choice didn’t offer a suitable delivery time[6]. The same survey which was carried out by the delivery service, Shutl found that 45% of consumers have higher expectations of online delivery compared to just a few years ago in 2015.

What are the downsides to offering alternative delivery methods?

  • The initial set-up will cost money – from updating your website to hiring more staff to fulfil delivery requirements, you’re likely to need money upfront to get up and running.
  • It can put extra pressure on your business to get deliveries out as quickly as possible.
  • The best case scenario for any business is to physically get customers into their store. If buying online is more convenient, people are likely to do this which gives you fewer opportunities to upsell products.
  • Click and collect is estimated to cost retailers four times more than in-store purchases[7] which can seriously eat into your profit margins.

A great tip for SMEs who may not have the money required to offer lots of different delivery methods is to start small and work your way up. Simply changing your courier to a supplier which offers more convenient delivery such as Royal Mail or DPD is a great way to test demand. If sales increase, as a result, you can then build up to alternatives such as click and collect which can be more expensive to set up.

[1] https://www.ft.com/content/a8f5c780-f46d-11e7-a4c9-bbdefa4f210b

[4] https://postandparcel.info/71804/news/uk-online-delivery-and-click-and-collect-to-double-by-2025-claims-new-report/

[5] https://www.ft.com/content/a8f5c780-f46d-11e7-a4c9-bbdefa4f210b

[6] http://www.retailtimes.co.uk/retailers-cant-rely-brand-integrity-guarantee-seasonal-sales-says-shutl/

[7] https://econsultancy.com/how-has-click-collect-evolved-and-is-it-still-in-high-demand/