Brian Elliott, partner, founder and head of innovation at Periscope By McKinsey, examines how postal operators can improve their delivery services to keep up with the demands of online shoppers and retailers
For today’s consumers, shopping is all about ease, immediacy and instant gratification of needs. To make customers’ in-store experiences more engaging – and to increase foot-fall and customer loyalty – bricks and mortar shops are upping the ante through digital innovation. As such, the pressure is now on for carriers and the postal industry to keep up with the demands from online retailers and their discerning customers to maintain their share of the customer pocket.
With customer expectations for state-of the-art ‘blended’ shopping experiences that are relevant, compelling and personally curated on the up, we conducted research with consumers in France, Germany, the UK and the USA to understand their current cross-channel preferences and future shopping intentions. The study, entitled The future of shopping: Connected, virtual and augmented, highlights the speed with which cross-channel retail is evolving, and how consumers are eager to try new digital channels that eliminate friction or frustration from their in-store shopping journeys.
While 60% or more of consumers in Germany, the UK and the USA say they engage equally with online and off-line shopping channels, a growing number of respondents in the UK (25%), Germany (23%), France (21%) and the USA (17%) say that these days they predominantly, or only, shop online. This cohort of determined online shoppers typically lives in big cities or urban locations, where plentiful cross-channel shopping options are readily available.
Online shoppers want convenient delivery options that enhance the shopping experience. So, when it comes to taking receipt of online purchases, shoppers made it quite clear that they wanted a delivery option that was also part of their enhanced shopping experience. Home delivery was the top option for the majority of respondents in all countries surveyed, and particularly so for German shoppers (83%). When asked the reason for this preference, time efficiency was the top reason given by all shoppers in each country.
In-store pickup was the second most popular choice for shoppers in the USA (40%) and the UK (39%). Meanwhile, the convenience of collecting goods from a local pick-up point resonated particularly well with consumers in France (51%). Respondents said their top reason for selecting the pick-up options was to avoid waiting in at home for a delivery. This was followed by the indication of more reliable delivery timing in all countries besides the USA, where consumers were more concerned about checking the product and the quantity of items delivered.
For carriers, the message is clear – today’s consumers are highly tuned to making the very best use of their time. As such, players in the postal industry need to ensure that they continue to innovate their services to match this expectation and provide online retailers with a delivery partner that can help to differentiate and retain client loyalty.
Keeping an eye on the horizon
This is especially key as responses around future inclinations revealed that more consumers will be heading in-store to pick up purchases at a time of their choosing. While delivery is set to retain a strong following, an impressive number of shoppers in France (81%), the USA (78%), the UK (77%) and Germany (59%) say they are definitely/likely to take advantage of click-and-collect in-store services to improve their shopping experience in the future.
With high visibility retail brands leading the march on the introduction of kiosk pick-up, consumers are beginning to also show an increasing awareness and willingness to turn to this as an option. In France, a convincing 80% indicated that they would, in the future, definitely/probably use kiosk pick-up as a means to collect their purchases. In the UK and USA, consumers were more considered but no less enthusiastic as 49% and 40% of respondents respectively confirmed that this was an appealing solution for them.
Our research highlights how consumers, who primarily shop online today, are particularly receptive to in-store technologies and applications that replicate the ease and speed of their online experiences in-store. As retailers will need to keep pace with the ever-increasing appetite of today’s consumers for more engaging and interactive technologies such as augmented/virtual reality applications and digital shelves, enterprising carriers who can match this desire for innovation with forward-looking delivery services will become a vital part of online retailers’ commitment to delivering an enhanced and engaging experience for their customers.
For more information on this research, download the report The future of shopping: Connected, virtual and augmented here.
About Brian Elliott
Brian Elliott is a founding member of Periscope By McKinsey. Elliott served as managing partner from 2012 to 2018. During his leadership, Periscope scaled from a startup environment into one of the top global revenue growth analytics solutions in the market with accolades from Gartner, Forrester, IDC, ALM Intelligence, Promotion Optimization Institute, and CIO Review. In his current role as senior advisor and head of innovation he is leading the long-term solution innovations and market expansion. In addition, he is also a leader in McKinsey’s Marketing & Sales Practice and leads major revenue growth transformation programs, driving sustained client impact.