Now more than ever, business owners and leaders across the country must adapt to the changing needs of their customers. In fact, 30% of customers expect same-day delivery from online retailers.
In this digital age, acing local delivery is essential for retailers. But, as retailers of all sizes look to build and scale delivery, they must evaluate the needs of their business and determine the most cost-efficient, reliable way to deliver for their customers.
Many retailers have worked with last-mile delivery providers to trim their standard shipping timelines from three to five working days, to deliveries as fast as 30 minutes. But that may not always be the right fit. Too often, we’re implementing the delivery “norm” of ASAP, based on industry standards.
Unscheduled delivery is the middle ground. Unscheduled delivery promises that orders arrive same-day or next-day, but there isn’t a promised time window. This empowers delivery service providers (DSPs) to make the offering more cost-efficient, passing efficiencies back to the client. There are three major areas to consider as retailers explore enabling or expanding delivery options: industry & product assortment, operational capabilities and strategic objectives.
Industry & Product Assortment
If online delivery is already available for customers, retailers should consider their product offering, customer expectations, the competition and delivery capabilities.
When choosing a delivery promise, first consider product type and customer expectations. Merchandise can dictate the delivery urgency — fresh food delivery requires an immediate delivery promise. Shelf-stable products such as apparel or beauty can be held, and can stay in transit longer. Client expectations or contractual commitments also have a large bearing on the delivery promise. Some industries make commitments to their customers to turn an order around in 30 minutes, and some have less intensive delivery times, where same-day delivery would still meet business needs while delighting the customer.
From there, look into what competitors are doing and what capabilities are available from DSPs. Is there a standard in your industry for speedy delivery? Going against the grain can be an excellent way to beat out the competition and potentially offer free delivery due to internal cost efficiencies.
Each DSP has unique capabilities, and finding the one(s) that most closely align with your goals determines success. For example, if you have a larger product assortment there are specialized big and bulky providers to facilitate this.
Delivery from store requires robust in-store fulfillment technology, operational procedures, and training for employees, to ensure timely pickup for the driver and on-time delivery.
An on-demand service requires proper staffing and operations to ensure orders are picked and packed as soon as an order drops. In a high-volume location, staff assigned to fulfilling orders may not be able to serve customers or manage other operations as quickly. Unscheduled delivery can help mitigate some of these challenges because you can assign a single pick, pack, and dispense window during the day, and a single driver pickup window. For example, you can offer and execute a same-day delivery promise if the customer orders by 11 am, allowing you to pick and pack orders between 11am and 2pm, with the driver arriving at 3 pm to deliver orders from 3pm – 6pm.
If you’re serving customers within smaller distances (one to three miles) you can handle a speedier delivery; however, if your average customer is 30 miles away, promising a 30-minute delivery time is unrealistic.
These same savings from unscheduled and batched deliveries can also be passed down to the customer, furthering the adoption of delivery by the clients’ customer base.
What are you ultimately hoping to achieve for your business? Cost reduction? Are you looking to offer premium services for your elite or VIP customers? Your goal is the leading indicator of the approach you choose. Common objectives include cost reduction, customer satisfaction, operational efficiency and driving revenue.
On-demand and express delivery costs are high for two reasons. First, you must find a driver quickly, and that automatically adds a premium. Second, with such a small window to make the delivery, you have little opportunity to group orders together without risking disappointing your customer. With unscheduled delivery, the longer delivery timeframe and DSP batching optimization means you can batch as many as 10-15 orders together and deliver all of them over a period of 3-4 hours. Some retailers cut their average cost per delivery by 30% by making the switch — and they’re still delighting their customers with the speed of service.
You also must choose a delivery promise that satisfies the needs of their customers. Seventeen percent of online shoppers have stopped shopping with a brand due to slow shipping. Unscheduled delivery enables retailers to delight customers with reliable, same-day delivery while finding cost and operational efficiencies.
As highlighted earlier, there is an optimal opportunity to improve efficiencies by streamlining store operations and pickup experience to maximize time serving customers. There are also cross efficiencies to be had when you think about the opportunities that crossing services provides. With longer delivery windows and unscheduled deliveries, you can facilitate multiple pickups and drop-offs. You can leverage the service for in-store stock transfers, and even delivery from fulfillment centers direct to customers without hitting the storefront and adding a stop.
Lastly, cost competitiveness, regardless of delivery speed, is crucial in order for any business to be able to pass the best prices on to the customer, and maximize the opportunity to capture volume.
While there’s a lot to unpack, with a 60-minute delivery or a same-day delivery promise for customers, retailers can benefit from partnering with a DSP with deep retail and logistics expertise to find the right delivery solution for their business. Looking ahead, unscheduled delivery will continue to be a large part of the delivery conversation due to its versatility and the opportunity for businesses to operate more effectively.
Lucy Tudor-Ralston is senior director, growth, expansions & operations for Walmart GoLocal.
Timely, incisive articles delivered directly to your inbox.