q What will retail delivery look like over the next 5 years? - Business Reporter

What will retail delivery look like over the next 5 years?

Rob Shaw from Fluent Commerce describes how sustainability, agility and excellence in customer service will be the drivers for retail in the future

Over the past year, the Coronavirus pandemic and resultant national lockdowns have prompted a seismic shift in the retail landscape, acting as a hyper accelerant on forces that have been reshaping retail for years, such as omnichannel offerings, autonomous deliveries and increased AI.

Looking ahead, habits, behaviours and expectations continue to change, and retailers face an uphill challenge in staying relevant and delivering the kind of experiences customers expect.

Take sustainability, for example, which is increasingly a factor in consumer decision-making and their attitudes towards issues such as delivery. While cost, reliability, flexibility and speed remain front of mind for most consumers, the burden that delivering products from the other side of the world places on the environment is increasingly entering the consumer conversation.

The pursuit of sustainability

Indeed, the ‘final mile’ represents an important point of focus, with the likes of Amazon mounting high profile campaigns to publicise their use of electric trucks. They are far from alone, with many of the major retail brands now committed to some use of sustainably-powered vehicles.

But while this contributes to better overall environmental performance, it doesn’t mitigate the impact of long distance logistics, which still requires diesel-powered haulage fleets.

So, where are we heading in the pursuit of sustainability? The bottom line is that consumers will increasingly ask retailers to improve and demonstrate their commitment to protecting the planet – and failure to do so risks customer loyalty and brand equity.

Persisting pressures

But that’s not the only type of pressure being placed on the retail sector to reduce its environmental impact. Government regulation has seen major cities across Europe implement low or zero emission zones, and in some countries there are also growing discussions of an online delivery tax or mandatory delivery charges.

Meeting these requirements will not only play a role in the overall customer experience and help brands to protect their image, it will also help achieve something more fundamental, which is to protect the planet in an era of unstoppable consumerisation.

There’s more to consider, with workforce wellbeing playing an important role in overall sustainability and ethical corporate behaviour. Retailers can now routinely expect to be publicly shamed for substandard working conditions or poor health and safety practices – the recent social distancing controversy faced by BooHoo being a prime example.

Going forward, retailers simply have to embed assurance processes within supply chains – from production through to delivery – to confidently assert their sustainable and ethical credentials. The same applies to diversity, and with Gartner data showing that women represent only 14% of high-level executives within the supply chain, it is incumbent on retailers to match words with deeds and urgently address these vital issues.

Versatility is key

But these are far from the only major factors influencing the nature and pace of change across retail delivery in the years to come. Many retailers have already invested heavily in building more control and visibility into their supply chain infrastructure. For example, sophisticated cloud-based IT systems now enable orders and outbound fulfilment to be managed through a single dashboard, with the data from these streams collated and compared.

In common with many contemporary industries, delivery and fulfilment is increasingly turning to data and analytics to monitor and manage the performance of different carriers in a given city or region. Similarly, technology innovation is helping to improve forecasting. Historical data about sales volumes combined with real-time inputs such as weather or political conditions give retailers better insight into decisions such as where to allocate stock and even whether to manufacture products in the first place.

This is all part of a pattern of technology-led innovation where automation is moving from a niche function into a mainstream norm. For instance, warehouse robotics is set to be one of the main beneficiaries of the Covid-19 pandemic. Despite the rollout of mass vaccination programmes and the prospect of a gradual return to normality, retailers are finding that the cost of deploying robotics is, for the first time, becoming competitive with that of employing human staff.

What’s more, the versatility of the ‘as a service’ model, which allows retailers to deploy robots on a monthly subscription basis, is further accelerating the adoption of these transformational technologies. In common with many of these examples of change across the sector, the pandemic has created the conditions where emerging technologies have arrived much more quickly that anyone would have predicted at the beginning of 2020.

Improving the customer experience at every stage

In making these changes, retailers aren’t just looking for savings and efficiency gains, they are driven by the need to improve the customer experience at every stage of the journey.

Research suggests that cost and communication remain the key factors in customer satisfaction in regards to delivery. Indeed, UPS’s annual survey found that 55% of customers would consider a cheaper but slower option if available, whilst Royal Mail’s Delivery Matters COVID-19 survey revealed that being kept informed on delivery progress was the top priority for the majority (87%) of customers.

Furthermore, whilst most people associate ‘delivery’ with the parcel that arrives on their doorstep, in reality, the delivery experience starts on the retailers home page when delivery promises are initiated. Consumers want a clear understanding of their delivery options and product availability – confident that their order won’t be delayed or cancelled.

In short, accurate visibility is key. Retailers that can successfully balance these key priorities are much better placed to thrive as consumers become ever more sophisticated in their shopping decisions and brand loyalties.

The underlying, pre-pandemic challenges facing the retail sector were already bringing about a seismic shift in retail. Added to the mix in the last year or so has been the urgent need for rapid and agile adaptation to an unprecedented crisis.

In doing so, many retailers have built valuable experience in the strategies and behaviours required to survive in the most challenging or circumstances. As a result, the innovation leaders have set the tone for an industry that will remain in flux for many years ahead.

As Managing Director for Fluent Commerce in Europe, Middle East and Africa (EMEA), Rob Shaw is responsible for business and operational management, as well as the regional go-to-market strategy. Rob brings over 20 years’ experience in technology sales, including almost over a decade in fast growing, consumer facing, eCommerce and Customer Experience applications.

Main image courtesy of iStockPhoto.com

© Business Reporter 2021

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