Chris Greenwood, chief information officer at Mamas & Papas, explores four key trends to affect the e-commerce industry in 2019
Several factors are pointing toward 2019 becoming the year of change for the UK retail sector. Primarily, we will start to see the e-commerce industry realize the power and potential in customer-centric, end-to-end delivery.
We should expect to move on from simply offering ‘fast and free’ delivery, to delivery options that are customizable and transparent, prioritizing customer convenience. There are four main factors I believe will impact the e-commerce industry next year:
Amazon disillusionment
Online marketplaces like Amazon are highly regarded by consumers because of the breadth of delivery choice offered. Amazon is one of those companies that’s admired for customizable, fast and free delivery, and lots of retailers are looking to emulate that in their own delivery function. However, if you’re representing a luxury brand, with luxury products, the same strategy may not align with your brand values. In my experience, delivery strategy needs to be led by three things: your customers, your brand and your product.
In recent conversations I’ve had with fellow UK retailers, the perception is that Amazon is driving up expectations. In actual fact, it’s setting the bar low, by making it difficult for retailers and placing pressure on them to mirror something that is either not necessary, or impossible.
Without using data from customer purchases to inform what kind of delivery options brands should have at the point of checkout, delivery becomes ineffective, it can also become difficult to manage if retailers try to do everything themselves.
When overhauling your delivery function in e-commerce, retailers need to ensure technology supports and integrates with their existing services. The process of onboarding carriers shouldn’t be a long one as retailers can’t afford it to be – an e-commerce business never stops.
Using automation to remove delivery complexities
Retailers must figure out what to automate during the delivery and logistics process. For example, if you have a broad portfolio of products like we do at Mamas & Papas – everything from shipping cots, to baby booties – it creates complexity. First, how do you match the right delivery type and carrier to individual items? And secondly, from a technology perspective, how can you automate that process at checkout?
The trick is to plug in an automation tool – preconfigured with carrier options and services – with built-in machine learning. It needs to rely on a powerful rule-based engine in order to consider a number of things instantaneously. For instance, the kind of product, the basket mix, the order destination, and if it’s remote. We ship far and wide, and somewhere like the Channel Islands can only be offered a three-day delivery option, so the rule-based system would automatically show the appropriate delivery options.
The impact of Brexit
As Brexit agreements are finalized, the question is no longer if, but when. There will still be a lot of uncertainty around the implications of Brexit in 2019 and the lead up to the deadline. And because of it, a lot of industries remain at a standstill.
However, international growth with be a key driver for retailers in 2019. Recent research from Global Freight Solutions showed that online retailers are exploring growth opportunities outside of Europe, in response to uncertainty around trade regulations caused by Brexit.
Currently only one in three retailers attribute 10% of revenue to international business, but there is a clear ambition going into 2019 that UK retailers (76%) expect to increase international revenue. The potential lies outside of the EU with retailers prioritizing the USA, Australia and China for growth opportunities, yet we still need to have a plan around all eventualities to come out of the EU.
What does the future of delivery look like?
Despite plenty of excitement about the possibilities of drone delivery, taking into consideration health and safety laws and robustness of the solution, the dream seems a way off yet.
Moving forward, it’s all about being pragmatic, and having the flexibility to change with the market. Giving customers relevant breadth of options and enabling them to find the right option. The bottom line is, online customers want convenience. Trends and tastes change all the time, and retailers need to match that.
However, where delivery is concerned, retailers need to overhaul their function and partnerships for the right commercial reasons as well. At the center of any fulfilment project should be your customers, your brand, and your products.