Our website uses cookies

Cookies enable us to provide the best experience possible and help us understand how visitors use our website. By browsing Essential Retail Magazine, you agree to our use of cookies.

Okay, I understand Learn more

Battle lines drawn on same-day delivery

Dixons Retail launched a same-day delivery service this week, joining a growing list of retailers that have made this final part of the supply chain a key part of their respective strategies.

Providing the service for its Currys and PC World brands, the FTSE 250-listed company in partnership with Royal Mail Courier Service is the first UK electricals specialist to commit to getting online deliveries to customers on the day that an order is made. Same-day delivery for small box orders placed before 9:30am will arrive with the customer between 6:30pm and 10:00pm, even on Sundays.

It's a big statement from Dixons, which earlier in the week unveiled its new innovative Travel concept store at Gatwick Airport, but how might the company – and other retailers that offer the service – best utilise same-day delivery?

Lena Holton, principal consultant in the consumer products & retail team at consultancy firm Capgemini, told Essential Retail that the service has far-reaching benefits and contributes neatly to the multichannel retail experience typically required by customers.

"A few years ago, weekend and named-day delivery were still relatively new concepts so there is every chance that same-day will grow in popularity in a similar way; however, I think there are certain categories that will lend themselves better to this as a proposition," she explained.

"For example, Dixons could benefit from gearing up their proposition to support new smartphone, tablet and game launches (i.e. customers no longer have to queue to get their gadget on the day it goes on sale) and fashion retailers could also capitalise on customers looking for the perfect outfit to wear this evening or receiving next season's 'it bag' as soon as it hits the shelves.

"Finally, let's not forget that florists have been doing this for years so extended gift ranges would also be a natural contender for same-day delivery."

Holton references fashion retail as a prime candidate for same-day delivery, and it was Warehouse, Coast and Oasis, which when all part of the Aurora Fashion group in 2011, launched 90-minute delivery in some parts of the UK. In conjunction with logistics firm Shutl, this facility was widely commended for raising the convenience of online retail to previously unseen levels.

It has sparked a flurry of retailers across all sectors implementing processes to facilitate speedy delivery times.

As part of its expanding multichannel business, department store chain House of Fraser is soon to launch two delivery options which will see the introduction of a seven-day-per-week next-evening delivery and a same-day buy & collect offering. From this month customers will be able to order online up to midnight for home delivery the following evening, while same-day delivery will be available in selected stores by Christmas 2013, allowing collection in-store for any product ordered before 11am.

Andy Harding, executive director for multichannel at House of Fraser, said: "We listened to customer feedback which suggested a need for a more flexible delivery fulfilment based around standard working hours. There is a myth that home delivery is convenient but customers actually resent waiting at home all day for a delivery, even if they are offered a vague but unreliable indication of the time it will arrive."

Traditional bricks and mortar retailers have had to completely restructure their digital operations in recent years to meet the demands of the busy, mobile, modern shopper and to compete with pure-plays such as Amazon, which is renowned for its customer service and itself offers a premium evening, same-day delivery option.

But an intriguing delivery-based battle could soon materialise in the competitive grocery sector, too, with new supermarket fulfilment options on the horizon.

Waitrose has already announced plans to deliver to chilled lockers in convenient locations for its customers as part of its click & collect evolution, while Asda is reportedly set to become the first UK supermarket to launch same-day delivery later this year. Essential Retail understands that the Walmart-owned company is planning to make an announcement regarding its delivery options as early next week, although it is not yet clear exactly what this entails.

Asda's click & collect customers – like shoppers at the other leading supermarket groups – can already order groceries online and collect them from one of 100+ UK stores at a time that suits them the following day. The UK's second largest grocer is also trialling a click & collect drive-through at its York store, but will next week's announcement see Asda ramp up its delivery capacity even further?

Whatever the announcement turns out to be, Asda and other retailers looking to provide the quickest customer fulfilment must be aware of some key issues.

"The key to making same-day delivery a success is twofold – firstly, as a retailer you need to know that you have the stock available to sell to the customer and secondly, you need to be able to meet your delivery promise in order to delight the customer and maintain credibility in your offer," argued Capgemini's Holton.

"Stock visibility and accuracy is an ongoing challenge for most retailers and adding new channels or delivery options increases the complexity – layer on time pressure and existing operational processes and systems are likely to struggle, so a new approach may be required. 

"From the customer's perspective there is nothing more frustrating than waiting for your purchase to arrive and being let down by late or non-existent delivery so the retailer needs to ensure that their fulfilment route is reactive enough to cope with short lead-times."

Retailers must look at overall customer profitability across all the channels in which they operate in, she added, which is a significant mind-shift for most retailers to undergo and "it requires some nerve when building business in a new channel".

Dixons' announcement this week is an example of how influential the customer has become in shaping the course of retail, with operational processes now being designed to coincide with consumers' changing demands and lifestyles.

Achieving success with same-day delivery is evidently no easy task, but retailers of various guises are gradually adjusting their business models to ensure this convenient and instant form of customer service plays a prominent role in their cross-channel offering.