Thought Leadership

Parcelly Thought Leadership Corner: THE CONVENIENCE TRAP - OUTSOURCE YOUR PARCELS NOT YOUR REPUTATION

In just a few weeks the end of year peak will be in full swing and the dreaded Black Friday will become the focus of media attention. Although that might depend on whether there are significant problems with deliveries, or scenes of people fighting one another in supermarkets as they try to grab bargain TVs off the shelves.

Here’s hoping neither of those happen and the whole thing passes off without a hitch. That was, more or less, the case last year. 

However, 2014’s peak was marred by several high profile problems, from M&S and Yahoo struggling with sky-high volumes through to the demise of CityLink. In the aftermath of peak 2014, I remember in-store click and collect services were being singled out for praise, and even wrote the headline When Click-and-Collect Saved Christmas on one article I edited. The premise was a pretty simple one... by diverting parcels for in-store collection, retailers took just enough strain off their home delivery networks to stop them crumpling.

By Christmas 2015 though, shoppers’ in-store collection experiences were starting to suffer. This was - in no small part - due to the incredible popularity of click and collect. 

According to Marc Bolland, former CEO of M&S, 62% of its orders were fulfilled via click and collect last Christmas. Click and collect was more popular among John Lewis customers as long ago as 2015, when it saw 54% of online orders routed for collection in the last half of the year. It’s a similar story with Debenhams, which recently announced the importance of premium delivery in its most recent financial results; click and collect has grown by 35% year on year for Debenhams, and accounted for 46% of of fulfillment in the 2015 end-of-year peak. 

But as a result of this surge in popularity, huge queues, not enough staff (or not enough trained staff), long waits for parcels to be retrieved from stockrooms, took the shine off the whole thing. Take as one example, the John Lewis / Waitrose set-up. I offer this only as an illustration, not as a condemnation.

Lots of people place orders on the John Lewis website and have them shipped to their choice of Waitrose store to collect at their convenience. It’s a great system. Until things get busy - like they do at Christmas.

Imagine the collections counter in a typical Waitrose on a busy Saturday in the run up to Christmas. How many staff will there be ... two, three, four? No more, probably. And what will they be dealing with? Well, there’ll be people picking up special orders such as turkeys, as well as shoppers with regular customer service queries. There’ll also be people who can’t get their handheld scanners to work, or who want a cup for their free coffee. 

Add to this parcel collections, which require staff to leave their post, walk across the store from the front (where the customer service counter is usually found) to the back (where the stockroom is generally kept) and you have the perfect storm for customer experience meltdown.

It was worse in many other retailers last Christmas, with stores that couldn’t cope with queues of people getting in the way of shoppers, and lacked the space to store parcels for days on end.

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Galashiels ASDA Drive Thru Click and Collect point © Copyright Walter Baxter

 

Whether the same problems will occur this year remains to be seen, of course. But if click and collect saved home delivery by diverting traffic, the same will have to be done for in-store collections: the pressure will have to be directed away from the weak points. That means a greater use of third party collection networks.

Where third party networks flexibility come into their own for retailers is that they represent additional capacity that can be scaled up or down without hassle. There’s none of the cost that comes with expanding an in-store collection point, no ongoing costs, and no loss of floor space.

But it’s the customer and the shopkeeper who are at the sharp end of this shift, and if their experience is anything other than positive then the value of a third party collection network will quickly diminish. This is a fundamental part of integrating the right collection alternatives into a retail network; it’s easy to say you are customer-centric, but the strategic decisions retailers make need to be driven by an understanding of what works for the customer. Sometimes what the customer wants won’t line up neatly with what the retailer wishes they wanted. 

A well-run local shop has to be in tune with what customers want; there’s a level of interaction there that is impossible to replicate in even the best large retailer. Providing great service is an important part of it, but so too is being able to move with the times and give customers additional services they’ll value. Being part of that extended network of deeper customer engagement can only be a good thing for larger, or pure-play online, retailers. 

There are important follow-on benefits too, not least of which is the potential for diverting footfall away from large retail centres and back into communities and high streets. For a long time, smaller local shops suffered in the wake of the eCommerce boom, but now there’s potential for them to be part of it and - more importantly - start to make money from it. 

But while outsourcing delivery and collection needs to a third party network will clearly take the strain off retailers’ struggling in-store collection points, unless things are handled well, it’s not just the parcels that will be outsourced - all the potential downsides of customer experience might end up going along for the ride.

All the problems that blighted collections in peak 2015 need to be addressed dealt with and planned for when integrating a third party collection network into your operations. Will there be enough collection points or stores? Are there enough staff, and have they had the training they need? Will those staff find themselves under so much pressure that they can’t perform well? And are the businesses that make up the network being adequately compensated to make them want to do a great job? 

As tempting as it may be to hand off your problems to someone else and be thankful they’re in the hot seat on your behalf, retailers still need to be mindful of potential damage to their brand reputation of an under-performing collection service, regardless of its location.

 

Sebastian Steinhauser, CEO & Founder of Parcelly highlights:  "One of the key benefits of Parcelly is that our click&collect service is fully online retailer and carrier agnostic so customers can use one convenient Parcelly location for all their online purchases, without having to worry about numerous different collection processes and locations depending on where they shop.

The currently debated UK high-street decline with closing shops and deserted shopping areas is labelled as a side effect of an ever growing number of consumers embracing online shopping. Parcelly helps reverse this trend as local shops and businesses can benefit from an increase in footfall, cross-selling opportunities and an additional revenue stream, by offering a convenient, user-friendly and easy to implement click&collect service to their customers.

Parcelly were a pioneer in this space with a superior technology providing said benefits as well as flexibility, scalability with no set up costs for location partners and retailers who wish to implement Parcelly as an integrated API at check-out or advertise as an add on solution during peak parcel seasons. Our technology collects customer feedback in real time, which means customer experience is measured and retailers working with us can leverage this data to improve customer satisfaction rates.

One final point to mention is the opportunity for carrier and logistics partners to use Parcelly as hub locations to further reduce failed delivery rates, bundle parcel returns and optimise driver destinations. White van traffic is not only affecting air quality in densely populated areas, but also endangering road traffic as currently debated in the press. Parcelly innovates first-and last mile delivery logistics and helps ease pressure on already overextended delivery resources and margins."

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