Home delivery: New expectations in retail
It used to be simple for retailers. Delivering to customers used to be easy. Customers shopped in store and if they had something delivered it was generally because it suited the retailer: Either the item was too big to stock in store, or it was a specialist item with few retail outlets. So if the customer wanted it they could wait; ‘up to 28 days’ was the standard offer but things have changed… a lot.
Customer choice is king
Customers expectations of retailers have grown at a rate never before seen. The days of a delivery taking weeks are long gone, along with the tolerance for waiting in all day for a delivery van to arrive. Customers now expect their goods delivered when it suits them; with a chosen day and in a preferred time-slot. Choice is important, it turns out. Shoppers have come to accept that they will not get all these delivery options for free, but will only pay if they see a fulfilment option that fits in with their life.
This new expectation has created a race between retailers to give customers the best delivery offering at the best price (and at the lowest cost to the retailer). This race is won and lost according to retailers’ visibility of their delivery capacity, and their ability to continuously optimise the number of options presented to customers at the point of sale.
It’s equally important to ensure you don’t show anything you can’t fulfil. When you show those delivery slots you are making a promise to your customer, and breaking a promise is never going to be okay.
Decisions for retailers
This sounds simple but before you know which slots you can offer you need to know your current commitments to customers, as well as the time and space needed for this new potential order. Deciding whether you can accommodate these new orders requires a solution with sophisticated optimisation able to maximise customer choice, while being fully aware of the costs to the retailer.
Retailers need answers to questions such as: How much flexibility do four-hour slots offer over one-hour slots, and what are the cost implications? And: Which fulfilment centre is best placed to deliver to this customer?
For traditional retailers keeping up with this pace of change is not easy. Legacy systems and a mentality traditionally geared to providing stability rather than ground-breaking change can be a hindrance. Many have taken the step of engaging with bright young startups, usually through hackathon-type events, spotting the talent and investing or partnering to keep engaged with all the latest innovation.
And there is plenty more to come whether it’s drones, driverless cars or delivery robots (or most likely a combination of these and others). Innovation hasn’t stopped growing and neither will customers’ expectations.
Satalia is an artificial intelligence company founded in 2007 by Daniel Hulme, spun out of
‘s Computer Science department.