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RBTE 2016: Making the hard delivery decisions

As shoppers become ever more demanding with their online purchasing, retailers have to work out what delivery options work best for their organisation in terms of ensuring profitability and being most attractive to customers.

Speaking at RBTE on Wednesday on the 'What does the customer want, need or think?' panel, Phil Geary, marketing and eCommerce director at The Entertainer, said: "As they demand more – such as quicker delivery, more payment options, and cheaper delivery, you have to work out what you can do best and also get the return on investment. Many elements can chip away at profitability and you've got to try and find out what works for you."

But he warned that trying to squeeze margins from the customer in the wrong places can be dangerous as "they'll spot it". This was why he questioned the approach taken by some retailers like Tesco and John Lewis to charge for deliveries below certain value thresholds. He was also very much against working with third-parties like Amazon to handle fulfilment for The Entertainer.

Robert Aldous, director at Kitbrix, said he had considered such an option but found it to be quite onerous in terms of organising when dealing with small volumes. He also said dealing with Amazon when selling through other third-party retailers like specialist sports shops could lead to confusing relationships.

Steve Mader, VP of digital and retail insights at Kantar Retail, recognised that working with Amazon should be a carefully calculated decision: "Don't underestimate them. But it's very hands-on. And the volumes can be significant but there are also penalties for missing targets. It needs to be a strategic decision."

As delivery and fulfilment becomes a serious battleground he said a big trend is emerging, with retailers making the decision about whether they invest in their own delivery infrastructure and supply chains or linking up with organisations like Amazon, Instacart or Google for their on-demand delivery solutions.

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