In a world of complex algorithms, measuring the success of your ecommerce strategy by how far a customer has to walk in their slippers feels slightly out of step.
But so-called ‘slipper distance’ is one of several strategies retailers are using to meet growing customer expectations around online purchases and returns. “Convenience is king for online customers,” says Toby Hay, managing director of ecommerce marketing at logistics giant FedEx. But that can mean different things to different people.
Hay explains that, while UK consumers mostly prefer home deliveries, customers in the Nordics favour delivery to out-of-home pick-up points such as stores or lockers. “That preference is evolving now in the UK as out-of-home availability and acceptance have increased recently. Soon there will be a tipping point when it becomes convenient, cost-effective and sustainable enough for Brits to prefer using it. That’s your slipper distance – when you can almost stumble out of your house and find a delivery or collection point.”
This out-of-home strategy has become a key lever in delivery options used by retailers to keep pace with the explosion in ecommerce demand. Next-day delivery was once a competitive benefit but now it’s expected as a standard option by customers. Click-and-collect services in-store were also once a rarity but are now much more common.
With the bar continually rising, it is no surprise that customers today expect multiple delivery options
“With the bar continually rising, it is no surprise that customers today expect multiple delivery options,” says Hay. “The pandemic has further heightened and changed these expectations because of the different ways we now live and shop. During Covid, most of us were at home, making deliveries a lot easier. But people’s patterns and preferences are now more diverse. We may be at home or in the office or in between the two. So, the customer definition of delivery convenience, when and where they want their parcels to arrive, has become very personal and situational.”
While consumers start to demand delivery at any time, almost around the clock, they also expect control and visibility of their deliveries too. Over the Covid years, customers have also become much savvier when it comes to digital purchases, from booking holidays online to buying groceries or even cars.
“Retailers have always competed on customer experience and convenience. In ecommerce, they need to be in line with their rivals’ offers around speed, cost and delivery notifications to help customers plan and prepare,” Hay explains. He points to 2021 research from Sendcloud, which found that for 90% of consumers, delivery is an important factor when choosing one online store over another. Meanwhile, 78% of consumers feel that speed of delivery is important.
“But customers are not just judging their experience against other retailers anymore. They want the best digital experience full stop. You are now also competing against the convenience being offered by the pizza guy delivering in 20 minutes and letting you track their progress in real time.”
To win this battle of ‘competitive convenience’, Hay says retailers are thinking like a customer and starting to customise experiences at scale. “Given that convenience is such a key factor for many people in purchasing decisions, failing to provide a tailored service can lose business,” he states. “Communicating more regularly with customers about their delivery needs is critical, as is working out what their preferences are because these can change at the drop of a hat. The one-size-fits-all delivery model does not work anymore.”
FedEx has a system called FedEx Delivery Manager to help both retailers and customers take ownership of the delivery. Customers can change the delivery date, get it sent to a different address, or get it delivered to a neighbour, a retailer or a nearby FedEx location – and receive an estimated delivery time window along the way.
Retailers can also be more proactive and predict customer behaviour through the use of data. “Delivery companies typically have good data on what shoppers prefer when it comes to deliveries or collections, and retailers have good data on which products are selling well or need to be delivered quickly,” Hay says. “Data is the fuel of the 21st century. You can determine whether a customer has a preference for a particular delivery day or delivery point. We are moving towards mass personalisation using data to know that a customer is always at home on a Tuesday but likes to go for a coffee at 3pm for an hour. We can then predict when and where they want their deliveries to be made.”
One of the best things a retailer can do is act like a customer and shop with a competitor
Hay says that thinking like a customer also means developing more knowledge about the competition. “One of the best things a retailer can do is act like a customer and shop with a competitor. Compare that experience with your own and learn from the good and the bad,” he says.
By being smarter around deliveries, retailers can also better prepare themselves for economic downturns. “During Covid, when a lot of people had more disposable income and ecommerce was growing, it was easy to hide poor performance,” Hay says. “Every online retailer was a winner to a larger or lesser degree. But in times of economic crisis, the competition for customer spend increases. The more you can drive convenience for the consumer the more competitive you will be.”
Convenience, however, is also associated with a negative environmental impact. Retailers must be both convenient and responsible, but there are challenges. “Almost 80% of customers say they would consider a sustainable delivery option but only 7% are willing to pay for it,” Hay explains. “But the good news is that by using more parcel points and lockers, we all take a step towards more sustainable operations.” This is a win-win solution for retailers and customers, making deliveries more sustainable and convenient.
FedEx has also been trialling the use of e-cargo delivery bikes in locations such as Copenhagen and Glasgow. “We’ve found that in denser urban environments you can be enormously cost-efficient on a bike. For final mile journeys you can take five vans off the road and replace them with three cargo bikes,” Hay says. As well as being a good option for customers showing a preference for more sustainable delivery options, receiving packages by bike can be faster due to fewer stops and no hold up in traffic or difficulties parking. It’s all about understanding the customer and providing the right service, says Hay. “We offer shipping to keep people shopping.”
To find out more, visit fedex.com/en-gb/shipping/rates/ficp-rates.html
