Left: ASOS.com adopted a mid-range tracked solution and found that approximately 750,000 parcels previously sent untracked migrated to the new service
More consumers are opting for tracked delivery when shopping online – the result of retailers offering a greater variety of affordable options. Paul Galpin, managing director, P2P Mailing, examines this trend and highlights the importance of meeting the delivery service needs and expectations of today’s customers
Previously, when shopping online, consumers were limited in their choice of delivery service. The options broadly divided into two categories: standard delivery services which offered no tracking; or more express alternatives which offered faster delivery and gave the customer visibility of the progress of their order – but at a cost.
However, in the past couple of years this situation has started to change. Retailers and their delivery service providers have realised that as online shopping continues to grow, customers are becoming more discerning when it comes to exercising their purchase power. In particular, delivery is playing a big role in that decision. Our research shows that experiencing delays or delivery problems just twice or more would convince 87% of people to switch to another supplier (P2P Mailing, Are you Delivering?).
Now, a mid-range of delivery options has appeared – services that are not as expensive or as quick as express options, but importantly offer comprehensive tracking. These services are aimed at those customers that don’t necessarily need their order quickly – and therefore don’t want to pay a premium for fast delivery – but want to see where it is and know precisely when it will be arriving.
The take up of these solutions among retailers continues to gather pace. Brands are realising that in order to attract and, more crucially, keep customers, they need to offer the right delivery choices. Delivery is becoming a crucial differentiator.
The retailers that are leading the way in this regard are being rewarded. For example, ASOS.com adopted a mid-range tracked solution and found that approximately 750,000 parcels previously sent untracked migrated to the new service. The Hut Group witnessed a similar effect when 500,000 more parcels were moved to their new tracked service in the year after they started to offer it.
Retailers are finding that the extra parcels being sent using a tracked service are chiefly coming from two kinds of consumer: those that are upgrading and had previously ‘made do’ with an untracked standard service because they didn’t want to pay a premium rate, even though they would have liked the option to track their package; and others downgrading, who previously paid the premium for an express service because they wanted the tracking feature despite not being necessarily worried about the additional speed of delivery, but who now, rather than pay for a service they don’t need, have the option of a cheaper, tracked service.
It’s imperative that retailers understand the behaviour and needs of their customers and tailor their delivery solutions accordingly. And of course, the choice of delivery option is influenced by many factors which includes the type of product and the value of that product, as well as the consumer’s own particular preferences. As would be expected, electrical items, for example, have always attracted a higher frequency of tracked deliveries because of their value (P2P Mailing, Setting the Standard).
Some savvy retailers are already stealing a march on their competitors by engaging with delivery partners that enable them to offer a new range of conservatively priced, tracked delivery options. Before implementing new services, a clear understanding of delivery from the customer’s perspective is essential. Ultimately, if a retailer isn’t offering the right delivery solution, they can be sure that one of their competitors is.
Paul Galpin has worked within the express and mail industry for almost 20 years holding senior management roles for the past 10 years. In 2009 Galpin set up P2P Mailing, a third-party logistics provider, where he is now managing director.