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Just 16% of UK consumers are satisfied with delivery services every time

Over two thirds (68%) of UK consumers have had an issue with delivery in the last three months – and, as a result, 24% lost trust in a delivery company and 24% lost trust in the retailer.

That’s according to Descartes Systems Group’s latest Consumer Online Delivery Research, which set out to assess consumers’ online purchasing experiences across Europe.

Undertaken by SAPIO Research during July 2021, the interviews with consumers across Europe highlighted that quality of the delivery service is undermining overall customer perception of both delivery companies and retailers – leading to lost sales.

The research concludes that retailers need to take ownership of the end-to-end experience, in order to address consumer expectations regarding tracking and communication; safe delivery and ease of return; and, increasingly, environmental considerations.

Key findings include:

  • The quality of the experience has been far from perfect: just 16% of UK consumers are satisfied with the delivery service every time.
  • Over two thirds (68%) have had an issue with delivery in the last three months – and, as a result, 24% lost trust in a delivery company and 24% lost trust in the retailer.
  • Over a third (37%) of consumers also share their perception of both delivery company and retailer with friends and family – creating a ripple effect that rapidly undermines consumer perception.
  • 71% of European consumers consider the environment when making an online order
  • Almost a third are interested in bulking all orders to one weekly delivery.

Since the beginning of the COVID-19 pandemic, the proportion of purchases made online has grown from an average of 32% to 43% and is expected to remain at 41% for the foreseeable future. More than half (51%) of consumers have increased the number of purchases they make online, and 51% now make an online purchase at least once a fortnight – almost double the number (28%) pre-pandemic.

Despite these statistics, the research findings underline the fact that deliveries are failing to achieve complete customer satisfaction, with nearly nine in ten (87%) customers not always satisfied with the delivery services received. With satisfaction rates even lower for consumers who have reduced their online buying behaviour during the COVID-19 pandemic, the implications of inadequate delivery experiences cannot be overlooked.

Timing is the biggest issue for home deliveries – with two in three (68%) UK consumers reporting a delivery problem in the last three months. Delivery problems radically affect customer perception – and not just of the delivery company. While almost a quarter (24%) lost trust in the delivery company, 24% also lost trust in the retailer and 23% did not buy from that retailer again.

Given that many consumers were a captive audience during COVID-19 pandemic lockdowns, these delivery problems should raise serious alarm bells for retailers. With just 16% of UK consumers confirming they are totally satisfied with the delivery service, a company’s ability to meet its delivery promises will become increasingly important to reinforce the quality of customer experience and maximise the chances of customer retention.

Descartes says questions retailers should, therefore, be seriously considering, include:

  • How proactively is the retailer tracking delivery performance?
  • What is the strategy for managing spiralling delivery costs and optimising driver time?
  • What is the strategy for meeting customers’ environmental expectations? Can the delivery model support bulk orders and green scheduling? Are the right vehicles being automatically assigned to deliver in Clean Air Zones?

Pol Sweeney, VP Sales and Business Manager UK, Descartes, said: “Consumers will not return to pre-pandemic shopping habits; having become used to the convenience of ecommerce, online purchasing will continue to dominate. Individuals have become far more confident and sophisticated online over the past 18 months and expectations have risen, leading retailers to enhance the online experience, but as this research reveals, the quality of the delivery service is undermining the overall customer perception and leading to lost sales. Retailers that take ownership of the entire end-to-end experience and truly optimise the delivery process have the opportunity to transform customer perceptions, drive additional sales and, critically, entice customers from poorer performing competitors.”

Yodel posts record parcel volumes over Christmas peak as overall market balloons

Yodel says it delivered a record number of parcels over the peak Christmas period, up 37.4% year-on-year between November 15th and January 2nd. 

The company says it experienced a surge in everyday premium items passing through its network as families settled in for a Christmas at home due to lockdown. Increased demand for alcohol and fresh food in particular made a significant contribution to Yodel’s record year, with volumes in the category up by 89% with 3.2 million parcels delivered. 

Meanwhile, the latest figures from Kantar show take-home grocery sales rose by 11.4% during the 12 weeks to 27 December 2020, a period spanning both the November national lockdown and Christmas.

December was the busiest month ever for British supermarkets as tightening restrictions and the closure of restaurants, bars and cafés across most of the country meant shoppers spent £11.7 billion on take-home groceries in the past four weeks alone.

Mike Hancox, Chief Executive Officer at Yodel, said: “The run-up to Christmas is always the busiest period for us but this was by far the most intense.  “Christmas was different for everyone this year and we saw consumers looking to capitalise on the benefits of doorstep delivery. Food and drink ecommerce in particular was a key driver over the Christmas period.

“The whole year for us has been defined by the unprecedented numbers of parcels being delivered. We were operating at ‘2019 Peak’ levels from March through to November, with volumes up 20% compared to a ‘normal’ year.

“We operate a flexible network and understand the importance of ensuring that delicate goods are handled with care and delivered on time, especially over Christmas. Our state-of-the-art handling facilities and our specially trained colleagues hopefully helped consumers to have something to smile about this Christmas.” 

Kar-go hits the road as UK’s first autonomous delivery vehicle

The UK’s first autonomous delivery vehicle has hit the roads – giving a glimpse into how technology is set to transform the parcel delivery industry.

Kar-go, a self-driving delivery bot built by Academy of Robotics, uses artificial intelligence and a specially developed package management system to provide contact-free delivery.

Its vision system means the electric vehicle is capable of delivering in both city-centres and suburban and rural locations.

Capable of covering 60 miles fully loaded on a single charge, the Kar-go’s makers claim this type of electric delivery bot could dramatically reduce the environmental impact of parcel deliveries.

In a landmark first journey, the machine successfully transported medical supplies from a pharmacy to a care home in Hounslow, Greater London.

In accordance with current legislation, there was a safety driver on-board Kar-go who could take over at any time, while an additional layer of safety is provided by its nearby Command Hub.

Academy of Robotics says the successful delivery shows how driverless vehicles could eventually become a common site on the streets delivering parcels across the UK.

William Sachiti, the founder of Academy of Robotics, said: “Kar-go’s first deliveries represent a key milestone for the wider automotive industry.

“We have been working closely with DfT’s Centre for Connected and Autonomous Vehicles (CCAV), BSI, TFL and our partners at Eurovia UK to ensure that safety is at the heart of everything we do and we are grateful for the support we have received.

“What makes Kar-go magical for me is that we applied artificial intelligence and robotics in a useful and good way.

“The technology is there when it is needed and out of the way when it isn’t.

“As complex as Kar-go is, its function is very simple. To me that is good and that is an AI assisted future I would want to live in.”

Kar-go has been designed as a green alternative to diesel delivery vans, which will enable logistics companies and retailers to keep delivery costs down, while providing a more convenient customer experience by delivering on demand.

It focuses on the small, shoe-boxed sized parcels, where delivery costs, which can account for a third of the cart value, put increasing pressure on margins for both retailers and logistics companies.

The vehicle will be able to drive itself to and from the sender and recipient’s address and will hand-over the parcel autonomously using its on-board robotics.

Beginning with semi-autonomous deliveries, the level of autonomy will be gradually increased.

From the Command Hub, Academy of Robotics have instant, secure access to remote monitoring and supervision of the vehicle while it is in autonomous mode.

All elements of the vehicle’s operation from the cameras to the software logs and the vehicle’s position can be monitored and controlled remotely.

Kar-go uses artificial intelligence (AI) to navigate itself and perform many of its functions, with the specialist form of AI developed and patented in the UK by Academy of Robotics.

It uses algorithms based on evolution which can learn and ‘self-optimise’ in real-time to make the best decisions and ensure that multiple fail-safe layers are in place.

Academy of Robotics received funding from UK Research and Innovation as part of the Government’s modern industrial strategy to help scale up their technology and will begin setting up further deliveries in London and the surrounding area before the end of the year.

They are working closely with Eurovia UK, which maintains and improves much of the UK’s road network to look at how the technology can also be used to improve monitoring and management of our roads.

According to the DfT’s Road to Zero report, 33 per cent of the Nitrogen Oxide emissions from road transport were from vans, and emissions from cars and vans are reportedly causing around almost 10,000 early deaths annually.

The debut on UK roads has been welcomed by the Department for Transport. Transport Minister Rachel Maclean said: “Autonomous delivery vehicles, such as Kar-go, can offer safer and speedier delivery of medical supplies to those who need it the most.

“The UK is well-placed as a science superpower to lead the world in this area and I’m delighted to support projects that drive green innovation, promote a clean transport future and help the economy.”

How COVID-19 has impacted global supply chains

By Nick Pike, Chief Revenue Officer, Vizibl

The impact of COVID-19 has been swift and devastating to those directly affected. Not just from a health perspective, but also for businesses who had to promptly close their doors as the country went into lockdown, particularly those in hospitality and retail. And as we now slowly emerge from these more stringent controls, the indirect consequences of the pandemic on global systems and networks, specifically global supply chains are also being felt.  

The spread of COVID-19 has affected operations globally in ways that are difficult to model and assess. Many of the affected countries are at the heart of global supply chains and as a result have witnessed depleting (or idling) stock; the net result is that many organisations have simply not been able to meet their contractual obligations on time. 

This is because multiple areas have been disrupted.  For example, suppliers have been unable to fulfil orders due to labour shortages, including shortages of drivers.  There have been transportation restrictions, and restrictions moving from one country to another.  This has resulted in stalled production, unfulfilled orders, slower shipments, stock shortages, incomplete deliveries, inflated costs, and less products on the shelf at the retailer. 

Manufacturing issues in China 

Additionally, it would be remiss to talk about issues affecting global supply chains, without talking about China. Earlier in the year, analysts warned that manufacturing activity in China would face significant disruption due to COVID-19.   For example, Apple has 10,000 direct employees in China with almost all the company’s flagship iPhone products being made in the country. Likewise, US car manufacturer, Ford relies on nine auto manufacturer facilities in China. Indeed, auto manufacturers are one of the industries that have been hard hit, due to parts shortages. 

Over the years, China’s share of global exports has more than doubled from just under 6% in 2003 to nearly 13% in 2018 according to OECD and World Bank data.  However, in the past where China has been viewed as only producing low-end, low-value products, but today China is in the supply chains of many of the high-end products  meaning the impact on the supply chains has been and will continue to be significant. 

Similarly, a slowdown in China affects the global economy. The country accounted for just over 4% of global GDP in 2003. By 2018, it accounted for nearly 16%. The global supply chain is not just vulnerable to China’s position as the world’s largest producer of goods and parts, but also as the world’s second largest consumer. Weaker demand from China further complicates the impact on global supply chains. 

Diversification and resilience will be the watchword going forward 

Containment of the virus is important for disrupted supply chains as they can only return to normal once it stops spreading. This will only really happen once a vaccine has been developed.  While COVID-19 is not the first public health emergency to impact global networks, its severity highlights a need for greater supply chain diversification and resilience. Natural disasters similarly prove this point: the 2011 Tōhoku earthquake in Japan exposed the dependence of global motor vehicle companies on auto parts manufacturing in the country.  

The need to diversify supply chains and build in greater resilience will be critical for long-term survival. Greater visibility into complex supply chain activity will equip organisations with the knowledge to reduce supplier exposure and risk, which will help them vary their supply chains.  New technologies are emerging that allow conglomerates to manage partnerships with a wider range of suppliers, from global corporations to smaller start-ups. Data shows that supplier diversity not only helps to reduce costs but also enables organisations to innovate and deliver more value to end users. 

A growing number of organisations are now incorporating diversity and visibility into their wider supplier collaboration and innovation programmes.  There is a greater focus on regional suppliers to mitigate risk. COVID has exposed the fragility of long distance, international supply chains. In addition, governments are starting to demand local sourcing, for example drugs and PPE. 

So, what tips would we give to organisations both now and in the future. In the short-term as we start to emerge from COVID-19 organisations should look to: 

1.     Create cross-functional and/or cross border SWAT teams to deal with supply chain shortages 

2.     Build additional buffers of inventory and raw materials 

3.     Develop expected-case and worst-case scenarios 

4.     Explore additional delivery routes and how they can source locally 

5.   Explore technologies and partners who can help them to diversify and innovate throughout their supply chain.  

Digitally transforming your supply chain 

Understandably, most companies are currently focused on the near-term, with their strategies addressing the COVID-19 situation as a temporary problem. But, if businesses look at the current situation strategically and align smartly, it will certainly help to propel future growth and competitive advantage for many years to come. For example, this could help organisations to digitise and enhance faster decision making and execution.  

As a result, organisations will gain better end-to-end supply chain visibility.  By collaborating more with their suppliers, they could build new products, services and innovations to deliver more value to their customers. Companies can develop better digital capabilities that enable better sourcing, collaboration, and supplier management.  Finally, this could enable more eCommerce and a better balance with more traditional operations combined with online channels to deliver an omni-channel approach. 

Three challenges to delivery efficiency during Covid-19

Andrew Tavener, Head of Marketing at Descartes, outlines the impact that Covid-19 has had on ecommerce, addressing the three main pinch points for delivery service that have been caused due to a surge in demand, and how they might be overcome...

The current Coronavirus pandemic has presented challenges for every industry, organisation and individual across the world. In particular, the increased pressures that have been placed on ensuring efficient deliveries; to stores and to homes – have never been experienced before. With the Government placing the UK on Police-enforced lockdown, not only has panic-buying ensued, but with the public unable to purchase items from stores – ecommerce demand has seen huge growth, with a resultant exponential increase in the number of home deliveries for all types of goods. So what are the main pinch points for delivery that have been caused by the crisis, and how can they be addressed? Andrew Tavener, Head of Marketing at Descartes, explains.

Delivery to store

In light of panic-buying and stockpiling caused as a result of the outbreak, many supermarkets have struggled to keep up with demand and keep shelves stocked. We’ve already seen certain measures come into effect to support retailers, such as the relaxation of the enforcement of the EU drivers’ hours rules, as well as changes to MOT testing requirements on commercial vehicles to keep deliveries moving. But while these initiatives will all contribute to the overall effort to streamline delivery to stores, with the temporary lack of regulated checks, implementing vehicle safety technology to make sure vehicles are roadworthy and drivers are safe when they go out is more important than ever before.

Additionally, the government has announced that it will be temporarily relaxing elements of competition laws to allow retailers to work together and share resources to take some pressure off of supply chains; sharing stock data, pooling staff, delivery depots and vans, as well as coordinating opening hours to allow for shelf stacking time. When it comes to sharing delivery capabilities, an online, remote, centralised system is essential, so that everybody can access it in order to provide maximum visibility and capitalise on technology to get more out the existing resources in place, as they come under increasing pressure.

Crucially, supermarkets are now closing overnight to allow for deliveries and stacking to take place. This is where dock appointment scheduling becomes a critical component, to be able to manage demand in line with resources and capacity, to prioritise deliveries and create a foundation for better carrier/supplier collaboration – addressing this significant pinch point during a critical time can help to streamline the delivery process. One well known supermarket is currently coping at four times its peak with the use of Dock Appointment Scheduling, demonstrating how effective the tool can be.

Home Delivery

Add to all of this the growing concerns over the delivery driver shortages, especially as many may have to start self-isolating depending on whether they experience symptoms or not, the use of technology to optimise delivery efficiency has never been more important.

Steps have also been put in place by delivery companies relating to the actual delivery at the addressees’ homes, including leaving the goods in a specific place and not requiring a signature from the person accepting the item for proof of delivery.

A routing and scheduling solution that continually assesses the resources available, versus actual visibility throughout the supply chain, from initial collection through to the last mile of the home delivery process, offers the opportunity to maximise operational efficiency. Integrated telematics and mobile data communications provide increased visibility for the fleet manager and consumer, as they can see in real-time, exactly where a vehicle is against the plan and route set out by the scheduling software. This added insight allows transport operators to add or amend jobs to avoid disruption, such as traffic, as well as send automatic updates to the customer about any changes to their delivery. One well known pharmacy that relies on semi-retired drivers – those at higher risk to Coronavirus – is coping with a 15% absence rate with the use of routing software, demonstrating how the technology is enabling the pharmacy to keep up despite driver shortages.

Moreover, in light of temporary changes to drivers’ hours law enforcement, by combining digital tachograph analysis and reporting with driving licence and driver CPC verification with the DVLA, as well as digital driver vehicle safety checks, all in one platform, operators can practice proactive compliance management to underpin optimisation of fleet efficiency. Operators need a simple and convenient way to stay on top of their compliance requirements, especially as more changes are likely to come into effect as the situation unfolds.

Growth of ecommerce

The Coronavirus crisis has meant that retailers have had to go back to the drawing board when it comes to forecasting. For example, despite warmer weather approaching, comfy tracksuits are booming as people are staying at home, rather than purchasing evening wear or prom dresses. Home and garden, DIY and workout gear is also seeing a surge. While retailers can prepare for peak-periods such as Christmas, many are struggling to cope with this unexpected surge in demand.

With the public turning to online delivery during lockdown, businesses that have not had an online presence have realised that given the current state, this could mean the difference between surviving and going under. Even for those businesses with ecommerce in place, they have likely never had to deal with such an unprecedented crisis we are currently facing.

Primark, for example, has no online business to offset its lack of in-store revenue, now all of its 189 UK stores have closed. Estimates calculate the lost sales at Primark to equate to about £85M of gross profit, even before store closures. But all is not lost for those retailers that have not yet set up an ecommerce channel. With rapid turnaround remote solutions, warehouse management software can be deployed without the need to physically visit a site to get up and running. As long as warehouse facilities are available, businesses can deploy a logistics platform in three to four weeks, not months.

Moreover, with the likelihood that businesses will see more staff shortages as increasing numbers of workers will need to self-isolate, an efficient way of picking, packing and shipping is essential to keep up with increasing demand. And as consumers have no choice to turn to online shopping methods, it’s also likely that many will continue with online shopping even after the pandemic is over – especially if they have received a good experience. Retailers need to be prepared for the shift in consumer habits to not just be a temporary change in operations.

With technology that provides continuous background optimisation of resources, operators can get more out of their existing resources. Drivers and the public can be kept safe with real-time updates on delivery ETAs and mobile applications for proof that your goods were left in a safe place or outside your door for ‘contactless delivery’. These are testing times for every business, but those that can adapt now and capitalise on technology that can unlock valuable efficiencies will be the ones that will come out the other side stronger and in a better position to ride the wave of future demand fluctuations.