A customer’s ability to summon a single avocado to the door within 15 minutes with a single swipe of a grocery app may appear to be the ultimate in personal service, but is it realistic or sustainable in a post COP26 world? The pressure is on retail and delivery businesses to innovate not only to meet the demands and desires of consumers but do so with respect to the environment and move to net zero carbon emissions. but as ex-CEO of Unilever, Paul Polman, says, engage in a “net positive” approach.
For businesses currently struggling to meet customer demands for home delivery due to the lack of capacity created by the driver deficit and a rapidly escalating cost base, a greener future can look a long way off. But, how can a company explore the potential of new innovations such as drones, autonomous delivery robots or electric vehicles when scrambling to achieve business as usual? How can retailers pick the right delivery strategy? Is it possible to meet the green expectations of some customers – while also encouraging more environmental awareness in others? Critically, how can companies achieve this while maximising the capacity of the existing delivery fleet and minimising the impact on the bottom line?
Andrew Tavener – Head of Marketing at Descartes discusses the options for future proofing home delivery operations in a very uncertain world.
The speed with which consumers have transitioned to home delivery has been phenomenal. In January 2021 ecommerce adoption comprised nearly 38% of total retail sales in the UK and while that figure tailed off a little during the rest of the year, our desire for a personal service continues to increase. Take-away deliveries were 266% higher in December 2021 than 2019 – and delivery volumes now outstrip takeaway collections by a large margin. Consumers are now embracing the rapid food and grocery delivery companies that have popped up around the country offering a 15-minute option: expectations for a ‘to the door’ experience show no signs of diminishing.
For retailers, while consumer willingness to buy online has provided a vital lifeline during the pandemic, it has also created a huge logistical, financial and environmental headache. Vehicles of every size criss-cross our cities, towns and villages constantly. Our roads are clogged and emissions are rising. Inept scheduling combined with poor customer communication means that delivery success rates are hugely variable – leading to expensive redelivery. Research conducted by Descartes in the summer of 2021 revealed that over two thirds (68%) have had an issue with delivery in the last three months – and, as a result, 24% lost trust in a delivery company and 24% lost trust in the retailer.
Empty miles are still a major financial and environmental headache. And businesses are still wrestling with the unsustainable cost of returns to both the bottom line and the planet. A home delivery business model that was essential during an extraordinary event such as a global lockdown is not in any way sustainable for the future. Yet customer expectations have been set. So what happens next?