The speed versus cost debate

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Matthew Robertson, Co-CEO at NetDespatchMatthew Robertson, Co-Managing Director at NetDespatch, discusses how delivery services face the problem of speed versus cost and convenience for their customers.

As we become a nation of online shoppers this should be making our lives easier. The ease and immediacy that we can get hold of goods and have them delivered to wherever we like, whenever we like means we can carry on with our daily lives seamlessly without having to worry about shopping, right?

Apparently not. I recently read a new study from home services firm, Hometree that has cast new light on just how much time we end up wasting, waiting for parcel deliveries. According to this latest survey more than half of workers say they have had to take time off to wait for a delivery or visit from a tradesman. The average ‘wait-in’ time was three hours 18 minutes, equating to 103 million working hours wasted in the past year. There are few more dispiriting reasons for taking a day off work than having to sit around all day for a delivery or to wait for a tradesman to turn up. The survey found that parcel deliveries are the biggest reason for people having to take time off work, or asking to work from home, with more than two-thirds sticking around to wait in for a package and more than one person in eight (13%) saying they had spent a full day away from work in order to wait for a parcel delivery.

But there are ways to cut down on just how much time we waste waiting for deliveries. Many retailers offer a click and collect service, which means that you can go and get your order in person from a nearby shop or similar location at a time that suits you, removing the need to waste a day off. This isn’t reserved for big high street retailers either – you can arrange to collect orders from the likes of eBay and Amazon too. And, as mad as it may sound, you could always pay someone to wait in for you. TaskRabbit is a new site that allows you to sign up a ‘tasker’ to perform all sorts of different jobs for you, including a Home Team, who charge £12 an hour for a minimum of four hours for one of their team to sit in at your home – however currently this service only applies to people who live in London or Hertfordshire.

It’s frustrating enough having to waste time waiting for a delivery, but the fury really mounts when the delivery doesn’t actually turn up i.e. it is a failed delivery.

We recently sponsored the 2018 IMRG Valuing Home Delivery Review to gain a better understanding of how often deliveries fail.

There are many reasons why shoppers’ home delivery expectations may not be met, but the review focusses on the most common delivery failure scenarios: such as failed first delivery whereby re-delivery is required or the parcel is collected by the customer. We also looked at late delivery when the parcel is not delivered within the expected time window or the order is lost and a replacement sent.

What we found is that even though great strides have been made, there is still much to do to keep up with shopper’s expectations. The 2018 review shows a big number in terms of failed deliveries at £1.6 billion. I was not surprised by this: as ecommerce sales have increased, so you would expect the home delivery failure rate to go up. In our non-stop lives, it often seems that everyone is competing to do things as quickly as possible. Nowhere is this more apparent than in the fast-paced world of online retail. But there is an abiding assumption that, if customers want something, they want it as fast as humanly – or technologically – possible. The result is that delivery and delivery speed continue to be the key battleground for online retailers. However, as the review quite rightly points out, it is fundamentally important to not only deliver on time (whatever that means to the customer) but to the right place, first time, on time, every time (as the Hometree research also points to consumer frustration about ‘waiting at home’ for deliveries).

So where should we focus our attention?

A key question is around speed versus convenience – is it about meeting a genuine customer need rather than an expectation? Research NetDespatch did back in 2016 into buyers’ attitudes towards delivery found that there are several factors influencing how fast they want to receive their goods, including the context of the purchase – is it a ‘must have’ or a ‘nice to have’ purchase, and what is the acceptable cost for each? What we found was that visibility and being in control were key drivers where the consumer is concerned, and they are prepared to wait for most deliveries if they can accurately anticipate when and where it will arrive.

This makes me wonder whether the need for speed is being driven more by the retailer to be ever-more competitive and are they setting themselves up for a fall by trying to deliver a service that the customer hasn’t really asked for? There is much debate in the industry at the moment around the optimum delivery options to provide and how to make consumers aware without confusing the purchase decision. Ultimately this is about providing a service whereby many retailers are simply not making enough money. So is this race for speed at all costs sustainable? Clearly spending hours waiting around at home for deliveries is not desirable but is this more about being clear about consumer options and delivering to those requirements rather than simply assuming that all parcels must be delivered quickly?

2 Responses

  1. Yet still over 98% of our customers chose the slower free delivery option! It seems that 2 to 3 days is deemed the most popular choice where speed vs cost comes into the equation.
    We don’t even over charge for express options!

    the guarantee is not such a bad thing,
    when ordering an item with a stated delivery window
    we prepare and anticipate to accept delivery and be using the item in that time slot,
    if it takes longer or we need to chase it up
    thats when the dissatisfaction starts



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