New technology improving multichannel retailers’ delivery service

Is technological innovation finally whipping the home delivery market into shape? It is looking that way with customer self-tracking, email updates and SMS alerts about imminent deliveries all evolving at a rapid pace.

The latest order management software is enabling retailers to offer more accommodating delivery options from multiple carriers – meaning tighter delivery windows and a wider choice of available options. And in an effort to overcome that wretched “last mile” conundrum, electronic box technology for secure drop-offs and satellite navigation are also coming to the fore.

Patrick Wall, chief executive of e-commerce facilitator Metapack, says: “Retailers, carriers and software partners are forging ahead with new ideas. Offering diverse delivery options provides greater first-time delivery success, which reduces costs because of fewer contact centre calls, fewer returns and more satisfied customers. Smart direct retailers have realised that customer care around delivery is a real source of competitive advantage.”

Certainly, it is quickly becoming a requirement to allow your customer to track their order from the retail website or from an email sent out on dispatch, and SMS is really taking off. “Emails that are tagged to events in the delivery process and SMS messages that allow customers to intervene in a delivery before it fails will elevate home delivery to a new level of reliability and professionalism,” says Wall.

Customer care software linked to tracking technology also enables retailers to monitor customer habits and complaints and improve their service accordingly, according to Unipart Consumer Logistics head of e-fulfilment Mark Mearns. “If you find that customers in a region of Scotland aren’t receiving goods in the two-day time frame they should, you can design a different courier route to that location. Technology is enabling end-to-end control of the process for retailers,” he says.

Retailers such as John Lewis, Amazon, Asos and countless medium-sized e-tailers send out delivery status emails so that goods arrive when customers expect them, securing that all-important customer loyalty. Retailers can now benefit from systems integration with multiple carriers so that reassurances can be given across many different delivery networks, in a consistent, seamless way. This is useful for customer care staff in call centres as well as customers.

IMRG chief executive James Roper says: “Although satisfaction levels in home delivery are still not good, they are at least improving fast. In this industry it’s important to aim for 100 per cent delivery success rates because the people who experience the annoyance of failed deliveries tend to be the young and the wealthy – exactly the people we don’t want to be putting off multichannel shopping. The focus on efficiency will grow very rapidly now as the latest software, communications and satellite navigation technology come into play.”

Hundreds of retailers have signed up to IMRG’s Internet Delivery is Safe (IDIS) trust mark scheme, and by using Metapack’s IDIS Delivery Manager software, which is affiliated to the scheme, they can ensure continuity of service. For instance, if there is a postal strike or an unusual delivery need they can switch easily to pre-negotiated contingency carriers.

Asos head of customer logistics Stuart Hill says customer service has improved in the six months since the e-tailer adopted the software. “It’s helped us select carriers with tracking capabilities more often, so we can provide the tracking codes directly to customers, reducing the numbers of customers calling in,” he says. Asos sends out a dispatch email and a “last leg” email telling customers that a parcel is about to be delivered.

Text benefits

Hill is bullish about the benefits of text messaging. “With text updates we expect to reduce the queries coming into our call centre by half as well as reducing the dissatisfaction of those who still call in,” he says. “When things do go wrong, such as a parcel getting lost, we believe texting is an ideal way to alert customers immediately and give them a phone number to call if they’re worried,” says Hill. “Our customers expect that level of contact.”

Carriers such as Parcelforce, GeoPost UK and Home Delivery Network (HDNL) have invested in the technology to supply online track and trace information and send SMS texts to customers, and the likelihood is that in time all carriers will need to offer such services, driving down the costs to retailers.

One concern, though, is that texting is an additional cost that may not necessarily enhance customer service. Each text only costs a few pence, but if you are handling 3 million deliveries a year the pennies quickly stack up. Interactive texts will cost more – about 25p depending on the volume of messages going out – and will cost customers the basic fee to reply. That said, one carrier calculates that successful first-time deliveries go up by 15 per cent when texting is used, and while a text might cost 10p, preventing a call centre enquiry saves£1.70.

Sarah Clelland marketing manager at e-commerce specialist Snow Valley says: “SMS services that allow the shopper to confirm or rearrange delivery are the most cutting-edge, but very few retailers are doing so at this stage. Many seem to be sending out order status updates that do not really add anything of value to the customer experience.” Snow Valley’s latest annual Online Retail Delivery Report, published last December, shows that of 107 online stores tested, five were using text messaging in the delivery process but only a couple of those were using it in an interactive way. “It’s in its infancy and looks set to grow quickly,” Clelland says. “I interviewed 12 online retailers as part of the research and all said online order tracking was a priority in 2009, while 80 per cent said they were looking into texting customers.”

The Snow Valley survey reveals that today 72 per cent of UK online retailers give customers a choice about when their delivery will turn up, compared with just 52 per cent in 2005. And this time 56 per cent had a next-day delivery option, a quarter could offer Saturday delivery or a date of the customer’s choice and 15 per cent could offer a choice of time slots.

Asos says it wants to expand its delivery options beyond the two it currently offers – three to four days or next day delivery – and says it will be talking to carriers about am/pm slots and even two-hour slots.

Home Delivery Network chief executive Brian Gaunt says: “Successful deliveries are everything, so if we can text the day before a parcel goes out and allow a customer to choose their delivery slot, it can be incredibly useful.”

More sophisticated parcel tracking is also coming through, with real-time information available thanks to GPS technology. “Rather than a driver uploading delivery status information at the end of a shift it can be automatically fed to a retailer’s system every minute,” says Gaunt. “The big question for the retailer is just how much of this kind of detail is really needed. Retailers might only need that level of reporting for wayward parcels and exceptions, rather than for tracking everything going through the network.”

GeoPost UK is owned by French company La Poste, and operates two delivery brands here: Interlink UK and DPD. It uses tracking and text messaging in home delivery to provide Kiddiecare.com and Orange customers, among others, the facility to arrange deliveries by text. GeoPost UK chief executive Dwain McDonald says: “The best online retailers are giving customers real choice at the point of order and flexibility around delivery windows. But this means carriers need access to all the relevant data. This is now a data business, not just a delivery business.”

McDonald says GeoPost is pioneering the next technological advance in home delivery: combining satellite navigation technology with hand-held mobile technology used by delivery drivers, and SMS. “With GPS satellite tracking, driver location can be plotted every two minutes, and linked to Google Earth we can use postcodes to work out the estimated time of arrival for customers’ deliveries, giving them advance warning of the hour slot they should expect their parcel,” explains McDonald. He says a major investment in satellite tracking technology has been made by GeoPost UK because of the growth of home delivery and because customer expectations now demand it. A system along these lines could be available to Interlink and DPD customers by this summer.

By summer, we could also see retailers including Figleaves.com, Lighting Direct and Schuh using a new electronic box network managed by ByBox to reach customers. ByBox, has signed an agreement to convert up to 1,000 BT phone boxes to banks of secure pick-up units, which customers will be able to open when they receive a PIN code by email or text. About 400 consumer-access box locations will be operating by the summer. But because the cost of a ByBox delivery will be£8 to£10, retailers may need to absorb some of the cost to get customers interested.

And in February, HDNL formed a joint venture with PayPoint to provide a national network for consumers to collect and return parcels to.

All these innovations require consumers to change their shopping habits, which could take time. But it is clear that online shopping is where retail growth lies. Retailers not embracing change themselves could miss out.