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17 July 2014

The carrier conundrum

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Just as parcels carriers are getting really good at home deliveries, retailers are pushing click and collect for all it’s worth. Should we be concerned?
This personal view from the editor is taken from our feature article on home delivery solutions in summer 2014

When it comes to home shopping delivery, there’s a massive contradiction at the heart of it.

The delivery options offered by carriers are better now than they’ve ever been before. Late pickup, Saturday delivery, Sunday delivery, delivery alerting, re-delivery on a different day, safe-place delivery – whatever you want, these days you can probably get it.

The reason is simple; traditional parcel volumes are shrinking, and after years of doubt and even denial, carriers now see that home shopping really is their future. So they want to do it right.

But in a way, retailers don’t want any of it. They want people to go into their stores and do their shopping in person, on the high street. Yes, they’ve paid lip service to the e-commerce revolution, but the habit of thinking in terms of physical shops is so deeply ingrained that no mere decade of multi-channel growth is going to dislodge it.

Ok – that’s a distortion. In reality, many retailers and carriers are working closely together to offer a really exciting range of new delivery choices for shoppers, and there’s every sign that this spirit of cooperation will grow and flourish.

Yet it’s hard not to imagine a degree of frustration among carriers. They bend over backwards to overcome the hurdles to smooth home deliveries, making them more responsive, more precise and more adaptable to consumer demand – yet their retailer clients keep proclaiming that actually consumers wanted click and collect all along.

At the moment, happily for carriers, most retailers seem to be using them to provide click and collect deliveries. This activity actually suits the carriers very nicely; they get consolidated drops at high-street stores instead of much more expensive one-offs, and they avoid the risk of finding no one at home to receive the goods.

But if click and collect really does continue to grow at the current rapid rate, that might change. As Mark Catley of fulfilment giant Norbert Dentressangle points out: "We do use carriers for click and collect, but if there’s enough volume, we can also do it with our own vehicles, and that proportion seems likely to grow."

We know from extensive surveys by the likes of IMRG that whatever the retailers say, in truth shoppers still prefer the idea of home delivery to any other home shopping solution, and by a massive margin – that is, assuming the price is right, and they can avoid delivery problems. For the majority, click and collect will always be a second choice.

But if so, it’s one that that retailers are exploiting for all it’s worth: skewing prices and availability to prompt shoppers to opt for click and collect, and saturating the media with reports of its growth and popularity.

Considering that click and collect is actually a compromise, fuelled largely by the failure of the logistics world to resolve delivery issues more quickly, this is an astoundingly successful bit of revisionism.

You can’t blame retailers for it, though. Why should they abandon the high-street real estate they’ve paid so much for if they can tempt shoppers back there from their computer screens?

Nor can you entirely blame carriers. If they took their time to develop clever home delivery solutions, it was because originally retailers were hesitant to seek these out or pay for them. And that in turn was partly because retailers originally hoped e-commerce might go away, and only gradually recognised that it was becoming a key part of their business. A nice little vicious circle. And in the early days, of course, no one had really thought of click and collect.

Now things have changed. Carriers are able to do more than the industry ever thought possible to smooth the passage of home deliveries – and they can only get even better at it. But if retailers keep on banging the drum loudly enough for click and collect, it’s hard not to foresee a time when even leaders like DPD might rein in new investment in this kind of thing.

Carriers are now at a point where they have to hold their nerve. They need to keep on developing clever solutions on the basis that consumers will eventually get the point – will realise that they really can get a form of delivery that suits them. Moreover, the carriers need to get that message across to consumers directly if they can, and not rely on retailers to do it for them.

Unless they do, retailers will keep on skewing their offer to encourage click and collect – and consumers will continue to be taken in by it, forgetting the travel costs and other penalties that can affect the true economics. In essence, consumers will end up getting what they’re told they can have, not what they really wanted, and carriers will lose out in a key area of growth.

Will retailers be the winners in that scenario? It might look that way to them at the moment, but you can’t fool all the people all the time. If and when the focus swings back to true home delivery, those who have neglected it will ultimately lose out.

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