Why Delivery is Everything for Retailers

If you could boil down what retailers care about to one thing, what would it be? Their customers. And because customer behavior is changing, retailers and ecommerce providers have to change too.

One of the biggest transformations in the broad retail industry is consumers’ emphasis on convenience. People don’t have as much time to browse in-store, even for everyday items like toiletries or groceries. Not only that, customers want the flexibility to choose how they receive their items, whether it be through traditional post delivery, curbside pickup, or other delivery services like Shipt or GoPuff.

To deliver on those expectations, retailers and ecommerce vendors are rethinking their delivery process—from supply chain to the last mile. This puts Posts in a prime position to become the delivery partner of choice for modern retailers. Below, we examine why delivery is becoming a greater focus for retailers, which brands are using contemporary delivery technology, and how Posts can capitalize on retail partnerships.

Why retailers are focusing on delivery

Ecommerce continues to grow and has become the preferred shopping method by consumers across the globe. Online sales in the U.S. jumped 49% last year, and in Europe, ecommerce revenues are projected to reach US $465B by the end of 2021. While this means more revenues for ecommerce retailers, it brings with it enormous last-mile and first-mile delivery challenges. Customers expect same-day or one-day shipping, but brands struggle to meet those expectations due to their lack of postal operations expertise and shipping infrastructure.

To make matters more complex, not all customers want to receive packages at their front door. Some want to browse online, buy something, and pick up their purchase at a store all on the same day. Shopify estimates that customers in the US and Canada caused a 443% jump in click and collect orders in 2020. Although the delivery network required to make standard shipping and click and collect possible is hard to achieve, it’s worth the effort. Shoppers spend up to 14% more when they visit stores to collect the orders they’ve placed online.

Who is revamping their delivery process?

Several recognizable brands are taking action in regards to their delivery and fulfillment strategies. Here are just a few:

• Target – Target’s CEO is making big strides towards optimizing the company’s store-based fulfillment network. Since 95% of Target sales were fulfilled by store assets and inventory this past quarter, Target announced a dramatic expansion of its sortation and distribution center network. Its new distribution centers will allow stores to restock quicker as sortation centers improve order fulfillment. Target has also made significant investments in its subsidiary delivery company, Shipt, which became extremely popular during the pandemic. With route optimization software and improved sorting capabilities, Shipt will become even more efficient.
• ASOS – Online retailer ASOS, has introduced a flexible fulfillment model, meaning that its global warehouse network will fulfill any order from any warehouse, stock permitting. Initially, the ASOS websites for each region would cross-check inventory at the nearest warehouse. If the closest warehouse didn’t have items in stock, the region’s website wouldn’t permit customers to make a purchase. With the new system, items will show as in-stock for all customers if they are in stock at any of the fulfillment centers. So depending on where items are in stock, orders placed in the US could be fulfilled from the domestic ASOS warehouse, the UK warehouse, or even the German warehouse.
• MercadoLibre – MercadoLibre, an Argentinian eCommerce site, sprung into action during the COVID-19 outbreak. MercadoLibre oversees its logistics and shipping arm, called “Mercado Envios” and can ship over 90% of its items this way. Fast, accurate delivery has made an impression on customers. By doing their fulfillment, MercadoLibre saw its net revenue increase by 73% up to roughly $4B USD—more than its revenues in 2018 and 2019 combined. And MercadoLibre’s total number of unique active users hovers around 132.5 million, roughly half of all ecommerce users in Latin America.

A unique opportunity for Posts

Retail and ecommerce are massive global markets. Posts have an enormous opportunity to partner with retailers and ecommerce sites that don’t have the resources or know-how to build out their own delivery network. First, Posts already have regular delivery routes. Adding more parcels to their journey wouldn’t be a huge lift. What’s more, many Posts have high-quality customer engagement, allowing customers to track the packages’ journeys in real-time and reroute packages to different locations if necessary. Another strategy to consider is enabling delivery drivers to upsell or cross-sell upon delivery, similar to the additional revenue stores see from click and collect.

Posts might also have their PUDO locations or smart parcel lockers, making it easy for customers to pick up their parcels or drop off returns in convenient locations near school or work. Beyond that, Posts can collect data on their entire retail and delivery network. With sophisticated analytics and years worth of expertise, Posts can adequately align their delivery schedule to shopper activity to get deliveries to customers on time. Posts have so much to offer retailers regarding their delivery network, speed, efficiency, and customer-centric view.

The experts at Escher are well-versed on how Posts can seize this opportunity. Connect with us to start the conversation.