By Marielle de Jong, Business Developer, Transfervans
Today’s consumers demand both choice and flexibility when it comes to receiving their new purchases. This is the case regardless of whether they buy online or in-store, or whether they buy small or large items.
Most recent studies have focused on e-commerce delivery trends of postable goods. These studies, based on consumer surveys and market analysis, unanimously conclude that at least 60% of consumers will abandon shopping baskets if they encounter unsatisfactory delivery options .
Consumers want their orders when, where and how they want them.
Nothing new thus far.
But what about in-store delivery options? Roughly 92.6% of retail spending occurs ‘over-the-counter’ . Of course, most items leave retail stores in plastic bags. However, larger products like beds and barbeques will often need to be delivered to the customer’s house.
The total number of bulky items being delivered to Kiwi homes has yet to be investigated, but our market research suggests that in Auckland alone, 47,000 mattresses, 19,000 washing machines and 17,000 fridges are shipped to an end-consumer each year. Imagine the annual delivery volume of all bulky goods in New Zealand…
Delivering bulky items proves to be no small feat
From a logistics point of view, home deliveries constitute the most problematic solution in terms of service costs and organization . This is because consumers’ preference for express, arranged and reliable services result in increased fragmentation of shipments in the ‘last-mile’.
This fragmentation is amplified when large items need to be shipped. First of all because there are only so many oversized products that will fit in a van or a truck, making point-to-point delivery the standard. Second, the popularity of certain time slots is distributed more unevenly in large item delivery. This is because customers receiving these items will almost always need to be home to receive them. As such, transport operators cannot optimise their delivery rounds or use well known tactics to avoid deliveries which fail at the first attempt like leaving goods in a secret place . Third, consumers are generally less flexible about the delivery address when they need to have a bulky item delivered, as there are few people that want to have their new bed delivered at their work address or local post office.
Illustrative of these complicating factors is that New Zealand’s 15 biggest retailers selling oversized items have an average delivery time of over 5 days, with some deliveries taking over 3 weeks . This is problematic if your fridge breaks down and you drive a Mini.
Although smaller retailers typically find it easier to quickly deliver bulky goods to their customers , they still share the most common challenges of home delivery with their retail giant counterparts :
i. delivery on time
ii. delivery when the customer is home
iii. delivery within a tight window
iv. delivery at low cost
v. delivery without additional costs for repeated delivery
To combat these challenges, retailers are coming up with numerous ways to increase efficiency, effectiveness, flexibility and differentiation, together the four logistics capabilities . Best delivery practices differ per retail sector, company size, company location, location of customers, value of the items sold, and so on. Nevertheless, there are universal delivery factors that will immediately increase the value that retailers create for their customers, some of which are even more relevant in the case of bulky product delivery and over-the-counter sales.
What can retailers selling bulky items do to provide a positive delivery experience?
1. Good communication starts at the doorstep
Shoppers expect clear communication at every point of the purchasing decision. Online retailers, or e-tailers, are responding to this by displaying information on delivery options on their product pages.
From the perspective of customers shopping in physical stores, communication starts when they walk over the doorstep. Already glancing at a new dishwasher, they want to know whether they can have it delivered at a convenient time and at what cost. When customers ask sales staff about deliveries, they want them to have that information readily available. By contrast, customers find it frustrating when retailers have to ping pong between them and a contractor on the phone to find a match between schedules.
Providing delivery information early in the customer journey is a major selling point.
2. Good communication needs to be continued after purchase
After customers have made purchase and delivery decisions, they expect a delivery acknowledgement. Subsequently, other status updates are expected to follow. For example on a tighter delivery window closer to drop off.
Communication in the other direction needs to be efficient too. If something comes up, customers want to be able to reschedule their delivery without any hassle. They also want to be able to contact the delivery person to pass on information about the delivery address. Directly, without being sent from pillar to post.
Good communication in both directions during the delivery process helps to instill trust that items will arrive on time. It also helps to prevent fail at first attempt.
3. Delivery needs to be safe and without damage
Ensuring safety and a low damage rate are especially important when moving large items. Small packages can quickly be dropped off at the front door, but bulky items and their movers will often enter the customer’s home. Bulky item movers need to be strong, friendly and maneuvering experts. For some product groups they’ll also need assembly skills.
Professional bulky item movers ensure a great end to the customer experience and strengthen the retailer’s brand.
4. Making up for a poor delivery experience
Retailers accrue considerable additional customer service and operational costs when shipping goes bad . Retailers need to address a poor delivery experience immediately and appropriately. But even with these efforts, it can be hard to satisfy a disappointed customer.
Poor delivery doesn’t only damage the relationship with that customer. Today’s digitally empowered customers will not hesitate to take to social media to voice their frustration. The effect is that other customers reading these comments will decide to shop elsewhere. Retailers therefore also need to include these channels in their retention strategy.
Many retailers assume that ‘exceptional’ customer service can only be achieved by going above-and-beyond. According to research published in Harvard Business Review, the true driver of customer retention and loyalty is the ease of getting a problem solved – delight isn’t the foundation of a customer service strategy, but rather a second-order effect .
It is best to focus delivery efforts on meeting expectations and making up for unpleasant surprises. And to then go the extra mile.
5. A positive delivery experience is an affordable delivery experience
Recent research shows that consumers want free delivery even more than they want same-day delivery . Inevitably, delivery of bulky goods is more expensive than delivery of small goods. Offering free deliveries might mean that a retailer loses a large portion of their margin. It is nevertheless advisable to keep delivery costs as low as possible.
In the case of over-the-counter transactions, sales staff has the possibility to balance between giving a discount on a certain product or providing free delivery – depending on their perception of the customer’s expectations. However, upfront information on delivery cost is certainly preferred.
Affordable delivery options are key in providing a positive delivery experience.
A positive delivery experience and customer satisfaction
Delivery has never been as essential to the bottom line as it is today. This increasing importance means that it now affects pre-purchase decisions just as much as repeat sales. The success of bulky item delivery depends on the complete delivery experience, but good communication before and after the purchase, professional trusted movers, effective problem solving and affordability are key.
More and more businesses whose core business is not product delivery choose to use a third party logistics provider. Globally, we see a trend of retail giants and small and medium-sized enterprises (SMEs) stepping up their delivery game by engaging with disruptive startups.
Last month (September 2017) alone:
Europe: Ikea bought TaskRabbit, a company that links freelance workers with all kinds of jobs .
USA: Walmart bought logistics startup Parcel to help launch same-day delivery and show Amazon some muscle .
Asia: Hong Kong celebrated its flourishing startup culture with the country’s first two ‘unicorns’ (i.e. a company with a stock market valuation or estimated valuation of more than $1 billion) – both of which specialize in on-demand logistics .
It is only a matter of time before we see NZ retailers partnering with startups specialised in facilitating last-mile deliveries; and it is what drives us at Transfervans to build the best bulky item delivery service in New Zealand and Australia.
How do you deal with increased delivery demands? What emerging delivery solutions are you enthusiastic about? What are your reasons to arrange deliveries in-house or contract them out?
Please leave us your comments at firstname.lastname@example.org.
 Home delivery services: innovations and emerging needs
 BNZ Online Retail Sales Jan 2017
 The impact of e-commerce on final deliveries: alternative parcel delivery services in France and Germany
 Own research of the websites of New Zealand’s 15 largest retailers selling large items
 The power of omnichannel stores
 Home delivery and the impacts on urban freight transport: A review
 Extending the network: Defining product delivery partnering preferences for omni-channel commerce
 Stop Trying to Delight Your Customers
 Consumers say free shipping number 1 incentive to shop online more
 Ikea has bought Task Rabbit
 Walmart has acquired the logistics startup Parcel to help launch same-day delivery in New York City
 Lalamove raises 100m.