One of the hottest topics at NRF this week has been delivery systems. Recent research by Cisco Consulting has found that delivery is one of the top concerns of not only retailers, but of shoppers as well. I now have personal experience of this: Just before the holidays, my husband and I ran an experiment: Living digitally for a few days, shopping online, using only available delivery systems.
Day 1 – Now, I order just about everything online except for groceries. However, my husband orders very little online, although he is a fan of eBay. The first question he asked was, “What about groceries?” I said we would order from Safeway (where I used to work before coming to Cisco). His next question was, “Well, that’s great for our basics, but what about the specialty items we get from Trader Joe’s, how are we going to get those?” He solved this problem himself by finding Envoy, a store-agnostic delivery service.
Amazon, Amazon Fresh, Google Express, Instacart, eBay Now!, Deliv… so many delivery options, though not all available in our area. The first order of business was to buy groceries. However, I needed to sign up for a delivery service – up until then I had purchased everything online except for perishables, and I must say that I was a little embarrassed that I had never ordered from my alma mater, Safeway. So, I started there and was pleased to see that my Safeway id/password combination worked as well as giving me the option of free delivery, free water, and paper towels if I ordered within 24 hours. I love promotions and rarely pay full price for anything, but even more I love FREE.
Next, I signed up for Envoy to cover our Trader Joe’s and Whole Foods order, but found that I could only order from one at a time for $10/month each, with a service fee of $10 + 10% of my grocery bill. That seemed a little pricey.
That same evening, the washing machine broke, and my husband proceeded to determine how to best to repair it. Here we had a pleasant surprise, as we found that we could order a new part online for $35 (as opposed to or purchasing it locally for $90). So, that was a no-brainer… he placed the Amazon order with a scheduled arrival of mid-next week, labor not included.
Day 2 – I had scheduled our grocery order to be delivered between 11:00am and 3:00pm, and for my flexibility received a $6 discount. At 4:00pm, after a day of continuous meetings from home, I wondered where our order was and asked my husband to contact Safeway. At 5:00pm, I learned that our very first grocery order was stranded on a broken-down truck with no ETA. Finally, at 6:30pm a very apologetic driver contacted me, indicating that he was picking up all of the orders from the broken-down truck and would be arriving in about 30 minutes or so depending on traffic and the pelting rain. Then, I paused on our experiment to go get a pedicure (can’t order this online, yet).
That evening, all the groceries were delivered as ordered, with the exceptions of one item out of stock (one of the Just for You offers) and the condition of the avocados, which were definitely overripe.
Then we discovered we were out of firestarter logs. A quick check on Amazon found what we were looking for, with a promise of a Sunday delivery. Sunday, really?
Day 3 – My email box was becoming overwhelmed: I had received no less than 126 unique retail offers during the last 48-hour period. The most popular promotion was free shipping by online and multichannel retailers, with discounts on shipping from 20% to 50%. With all the noise, it was hard to tell which retailer or service was which.
Now I needed to deal with a few returns on the holiday presents I had been buying online. The easiest included free returns with a shipping label included in the package or printable online, or the ability to return directly to the store. The most difficult required a phone call, followed up by an email with an RMA (return merchandise authorization), and a requirement me to pay for the return. (I won’t be buying from that retailer again.)
Next, I was ready to mail my holiday cards. I thought since the mail is delivered every day to our house, I would be able to order stamps online. Guess how many days it takes to deliver stamps to your home: 7 to 10 days, plus 1 to 2 days extra due to the holiday season. There is certainly a disconnect between departments at the USPS. I hate to send out my holiday cards late!
Day 4 – Fortunately, I had remembered to order all of the items I needed to prepare my appetizer for a party that evening. And, Amazon delivered on its Sunday promise! Our firestarter logs appeared on the doorstep before noon.
Day 5 – Done! We lived for 5 days entirely digitally (except for the pedicure). How did it go? We found that:
- Living digitally requires planning ahead; even when new services are intended to provide same day service, they are not widely available
- Living digitally needs to be a family affair with extra coordination
- Service and delivery fees vary widely
- Returns can be challenging and time-consuming
- You’re dependent on the selections of the in-store shopper (i.e., the avocados)
Differentiation is still a major challenge. However, I would say that customers want the same thing they want in the store: a friendly, convenient shopping environment. Delivery services need to meet customer expectations on timing, and keep returns simple and convenient. Products ought to be in good condition, and fees need to be minimized. The challenge, obviously, is how to make this work financially.
Other delivery options are increasingly available, such as in-store pickup of online orders, locker-based pickup systems, etc. Keep an eye out for my upcoming paper on delivery systems – Cisco has some exciting ideas coming around this!
In the meantime, check out the new white paper on shopper trends.