Delivering Click & Collect success
Following some interesting revelations brought up in several recent studies after the traditional Christmas buying rush, Niklas Hedin, CEO of Centiro explores how retailers can maximise their operations to provide the best possible click and collect service.
Click & Collect has become more popular in recent years as retailers have looked to reduce the cost of online deliveries. Furthermore, according to research from Planet Retail, half of global shoppers are now influenced by a retailer’s ability to offer convenient collection points for online purchases.
Last Christmas more online shoppers chose Click & Collect as an option to collect items than ever before. However, according to YouGov research conducted over the Christmas period, over one third of online Christmas Click & Collect shoppers experienced problems with their orders. As the popularity of Click & Collect has increased, evidently so have customers’ expectations. But, if retailers get it right they can drive loyalty and share the benefits to all parts of the business.
Engage the online customer through stores
The in-store experience is still very important to many customers to enhance their relationship with a retailer’s brand. For example, a customer ordering a pair of shoes online for collection from a boutique gets a better quality brand experience when they collect their item in store than when dealing with a courier at the doorstep in their pyjamas. Click & Collect is a great way to drive revenue from online retail without significantly increasing fulfilment costs. Retailers already need to deliver items to store for replenishment anyway, by integrating Click & Collect orders they can make more efficient use of existing vehicles and reduce transportation costs.
Click & Collect also allows retailers to better engage with consumers prioritising convenience over speed of delivery, allowing them to collect items at a time that suits them. Critical to success is ensuring goods are delivered in a timely and efficient manner, to the customers’ desired collection point. An important point is that if a retailer wants to fulfil customer orders from an external collection point as well as from in store, it needs to have the right infrastructure in place to support this, but many retailers still haven’t got this today.
A great Click & Collect experience also requires retailers to have a clear view of their carrier networks. Retailers are now required to ship goods to stores and different collection points as well as direct to customers. By having greater visibility into their carrier networks, retailer scan ensure that they meet customers’ Click & Collect order promises in an efficient manner.
Delivery networks need to evolve
Click & Collect will evolve in the years ahead as customers demand greater levels of flexibility, convenience and personalisation. One of the biggest things to change will be Click & Collect seamlessly integrating with online and physical channels, rather than being an option in itself. As customers become increasingly able to receive items at a time and place that suits them, the fixed channels of home delivery, Click & Collect and in store shopping will become more fluid. We have already seen this with “Click & not collect” from River Island, allowing customers to change orders on the go. As the market becomes more competitive, there will be more and more Click & Collect offerings competing to provide better levels of service, with the expectations of customers’ continuing to rise.
Click & Collect can become an important customer touchpoint, but is also a good example of why logistics need to be fluid from online to in store and throughout the supply chain. However, if retailers get Click & Collect right, they can improve efficiency of logistics networks and drive long-term customer loyalty.
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector