Professional Documents
Culture Documents
2008
e-Retail Industry Review
©
IMRG is working to give online shoppers home delivery fit for the internet
age by aligning the collective efforts of all stakeholders:
CONSUMERS, RETAILERS and CARRIERS.
This report provides a market update and sets out the cost-benefit of
home delivery to these three key stakeholder groups.
© ®
Internet Shopping Is Safe (ISIS) where you see these signs
IDIS is the delivery mark of the ISIS e-retail industry trust scheme
CONTENTS
2. Introduction ........................................................................................................................ 5
www.fulfilmentguide.com/IMRG
1. Fast Facts
Who Pays?
THE OPPORTUNITY
IMRG estimates that £4 billion per annum of
benefit is currently available by resolving delivery
inefficiencies and that industry adoption of
IDIS Delivery Manager by MetaPack could realise
at least 50% of this
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Chart 1. UK e-retail sales, April 2000 - May 2008: This graph shows the 5213% growth of UK online
shopping between April 2000 and December 2007: the value of monthly sales rose from £87 million to £5.4
billion: the number of shipments per annum increased from 15 million to 820 million.
head / year £
People using
deliveries %
connections
Broadband
Av Spend/
deliveries
shoppers
Spend %
delivered
shopping
No. of e-
e-Retail
internet
change
change
parcels
spend
Home
Home
Home
Home
£
2. Introduction
Online shopping has become the dynamo of the retail sector. It accounts for more than 15% of the total
retail market and, as the world's attention fixes on climate change, can answer many of the urgent
questions being asked about the need for and efficiency of moving people and goods.
IMRG forecasts that the internet will account for half of all retail sales by 2020 and influence most of the
other half. Many online sales will not result in parcels being shipped, such as those fulfilled in store or via
click and collect services, groceries that are delivered via the dedicated transport fleets necessary to
maintain the chill chain, ticketless travel products, and virtual goods that require no physical distribution.
Nevertheless, half of online shopping does call for packages to be shipped so demand for home delivery
and other consumer fulfilment services will inevitably mushroom, with huge implications for consumers,
retailers and brands, planners, the transport industry and Government.
IMRG: Online & Web Influenced Retail Sales ‐ 2000 to 2020
2008
100
90
80
70
% of Total Retail
60
50
40
30
Web Influenced Sales
Online Sales
20
10
0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
© IMRG 2008
Chart 3. 2020 Vision: This graph shows IMRG's estimate and forecast of online retail sales and internet
influenced sales during the first two decades of the third millennium. The red line to the left of 2008
represents actual sales recorded by the IMRG Capgemini e-Retail Sales Index
When the first IMRG Valuing Home Delivery report was published in May 2006, a depressing £423
million a year of direct UK e-retail costs were being wasted due to largely avoidable home delivery
inefficiencies and failures. This equated to an inefficiency cost of £0.80 being imposed on every one of
the 540 million internet shopping shipments made that year. Delivery problems, together with the
associated uncertainty and hassle they caused for everyone involved, blighted the industry, inhibiting
growth and putting many people off shopping online altogether.
“ ”
To a business, its percentage of failed deliveries may seem
low, but to each disappointed consumer, the failure is 100%
Carrier
The answer was obvious: give shoppers more suitable delivery options and make communication better
all round. Ironically, most of the solutions needed to avoid the failures were readily available - named-
day deliveries, timed deliveries, drop boxes and SMS alerts to name just a few - but they were seldom
offered to shoppers at the point of sale, so of course were not being used. Our 2005 market survey
revealed that half of e-retailers offered just one delivery option - i.e. no choice - and only 20% offered
three or more options.
The delivery experience is key to the success of online shopping, and the fact that UK consumers are
spending £4.5 billion per month on the internet shows that many people are generally satisfied with the
service. However, there is such considerable room for improvement that it is surprising that more
progress has not yet been made towards realising better e-retail delivery.
The IMRG Delivery Forum's research consistently shows that by using existing solutions, clearly
communicated to the consumer, and fulfilled by the retailer and carrier working closely together, all of the
key stakeholders can gain significant benefits:
CONSUMERS can have easier and more convenient home delivery, which will result in more
consumers spending more online, more often;
RETAILERS can differentiate themselves from competitors, and gain significant bottom line benefits
through increased efficiency, higher volumes and lower customer churn rates;
CARRIERS can expand their revenues and service ranges (with new added value services) and
increase profitability:
But until recently, each of these stakeholders had expected another to take the decisive steps necessary
to align home delivery with internet shoppers' needs, resulting in a strategic impasse.
“ ”
I can't shop online because I'm always out when they
deliver. The last time I had to traipse to a depot in the
middle of nowhere on Saturday to get my stuff.
Where's the convenience in that?
Shopper
“ ”
The reason websites rarely offer time or date options is
because few carriers are able to offer these services and if
they do the cost is far too high. As a result the number of
customers who would actually be prepared to pay for them
is too small.
Retailer
“ ”
We asked retailers what delivery services they wanted, then
piloted the results - but they never want to pay a realistic
price. New delivery services will only become cheaper
when volumes are high. It's chicken and egg.
Carrier
For years, the gridlock was impassable. Piecemeal improvements in delivery were being made by
individual companies while all other aspects of internet shopping were progressing in leaps and bounds,
resulting in consumers' rising expectations outstripping the speed of delivery developments.
Chart 4. The biggest improvement in Cumulative Customer Satisfaction is seen with the Delivery
Experience, which has risen 3.9% compared with the December 2006 survey, and now ranks
second only to Product Range: The quarterly UK e-Customer Service Index report provides businesses
with an ongoing review of customer satisfaction with online retailing services, information and support.
Data has been gathered quarterly using a standard survey since December 2006, providing direct
comparative information across a number of survey cycles. Comparisons with the initial December 2006
data show that significant progress has been made especially in the area of delivery, which has been the
focus of huge amounts of effort on the part of retailers and transporters in the past two years and the
positive results show that consumers have noticed and appreciate such efforts.
Today, far more strenuous efforts are being made to improve the situation, which is just as well as soon a
billion internet shopping parcels will be delivered each year. Retailers, recognising delivery as a key
market differentiator, are giving it more attention than they have previously, while carriers, keen to
capitalise on the sector's rapid growth, are investing in capacity and service improvements.
At an industry level, the key advance has been the introduction by IMRG of the gridlock-breaking
IDIS Delivery Manager by MetaPack, a major innovation in home delivery for internet shopping that
enables e-retailers of all sizes to offer their customers a variety of delivery options from multiple carriers
and services (page 21).
The internet age has brought convenience, speed and choice to shoppers, yet,
even now, consumers routinely have to settle for a 'take it or leave it' approach to
delivery services with vague delivery promises. Uncertain delivery times and
sketchy delivery information deter millions of people from shopping online.
But delivery is improving fast; customers recognise this and want more.
The IMRG Delivery Survey 2008 was conducted as always by eDigitalResearch and attracted 1,478
respondents. More highlights of the results are contained in Appendix D (page 31).
Chart 5. Is e-shopping planet friendly? Chart 6. Would you opt for green delivery?
This chart shows that the majority of respondents Almost 80% say they would, which is good news as
think it is - a real accolade for a channel that is little green delivery options are becoming available.
more than ten years old.
Two of this year's new questions were associated with green issues, above. Below, this chart shows that
while satisfaction with delivery has risen overall, some sectors lag behind, such as Furniture, and
Clothing which both lags and remains unimproved, and Books which is actually falling.
Overall, rate your delivery experience (ALL SECTORS) 77.2 79.5 80.2 78.7 81.1
Furniture, DIY and gardening 74.5 74.5 74.7 75.3 75.6
Clothing, footwear and jewellery 78.4 78.2 78.4 77.2 78.6
Home and consumer electronics 74.2 78.3 78.3 78.3 80.0
Gifts N/A 79.13 80.8 78.7 80.5
Books, CDs, music, games, videos/DVDs 81.1 81.1 80.8 78.8 80.3
Health and beauty (e.g. cosmetics and pharmacy products) 79.4 80.2 78.3 79.4 80.0
Food, drink and household supplies 80.3 79.0 80.7 79.7 80.1
Travel (flights, holidays, car hire) and tickets (cinema, events) 71.9 82.4 84.4 82.1 83.3
Chart 7. This chart shows how consumers' rising expectations offset improvements in home delivery
services, resulting in delivery satisfaction ratings remaining largely flat. In some sectors - notably Books,
CDs, Music, Games, Videos/DVDs - satisfaction is falling.
Chart 8. The consumer view. This chart is a summary of the IMRG 2008 delivery survey's key findings.
The survey found that 95% of online shoppers request delivery direct to their home and that 90% of the
survey considered that the first delivery attempts were successful.
It also found that only 74% of the respondents rated their Overall Delivery Satisfaction between 80 and
100%. Alarmingly, a meagre 40% gave Returns between 80 – 100% satisfaction ratings.
65% have experienced one of more inconvenient delivery while 55% said that failure of one or more of
their home deliveries was due to there being nobody home.
Delivery concerns were a reason not to complete one or more shopping attempts for 69% of respondents
while delivery pricing has prevented 65% from buying online at some time.
Chart 9. Areas of opportunity. This chart is a summary of the areas of opportunity for retailers and
transporters identified by the IMRG 2008 delivery survey.
The Delivery Survey 2008 indicated some key areas of opportunity for retailers and transporters, as
shown in chart 7, above.
Cost reduction was identified by 59% of respondents as a key area of concern. Delivery cost efficiencies
offer significant competitive advantage where these can be generated.
Convenience of delivery (45%), more defined delivery times (44%) and time definite delivery (32%) were
identified as key area of concern and hence opportunities for retailers and transporters.
25% of respondents also indicated that the ability to deliver to an address other than that of the
cardholder would be a major encouragement to shop more online.
The chart below only sets out the costs to consumers of UNDELIVERABLES, i.e. total delivery failures
where the goods never arrive at all.
The chart excludes costs associated with ATTEMPTED DELIVERIES, i.e. deliveries that ultimately
succeed either through further delivery attempts or consumers collecting from depots. Further research
is being undertaken to assess these costs.
The figures are based on IMRG research and assume that the 1% 'undeliverable' rate recorded in
Q1 2008 remains constant during the year across the 820 million expected online shopping deliveries,
i.e. that 8 million deliveries will fail completely.
Total cost of UNDELIVERABLES to all UK e-shoppers in 2008* 1,825 man years p.a.
Chart 10. Consumer costs of delivery failure. * assumes 8 million UNDELIVERABLES per annum (i.e.
1% of the total 820 million UK online shopping deliveries expected in 2008).
The following chart is based on IMRG Retailer Survey (2005), supplemented by generic industry data
and conservative assumptions, extrapolated across the UK market where indicated. Further details of
the costs can be found in Appendices A, B, C and D.
One UNDELIVERABLE (with one attempted redelivery, customer service and £18.50
stock handling costs) + value of lost sale
revenue
One UNDELIVERABLE (as above) with additional charges / overheads that £46.50
MAY occur + value of lost sale
revenue
b) TOTAL SECTOR COSTS FOR 2008
All FIRST TIME DELIVERY FAILURES* in 2008 (at £1.50 each, excluding £141,000,000*
any additional charges / overheads that MAY occur) + value of lost sale
revenue
All UNDELIVERABLES** in 2008 (excluding additional charges / overheads £148,000,000
that MAY occur) + value of lost sale
revenue
All FIRST TIME DELIVERY FAILURES* and UNDELIVERABLES** in 2008 £289,000,000 p.a.
(excluding additional charges / overheads that MAY occur) + value of lost sale
revenue
Chart 11. Retailer costs of delivery failure.
* assumes 94 million FIRST TIME DELIVERY FAILURES per annum (i.e. 11.5% of the total 820 million
UK online shopping deliveries in 2008)
** assumes 8 million UNDELIVERABLES per annum (i.e. 1% of the total 820 million UK online shopping
deliveries expected in 2008)
Additional charges that MAY occur (answering customer billing enquiries, handling 1.50
claims, recalculating invoices, re-issuing invoices…)
Total cost to all UK internet shopping carriers of single re-attempt £178,600,000 p.a.
delivery per annum at standard charge**
Chart 12. Carrier costs of delivery failure..
** assumes 94 million FIRST TIME DELIVERY FAILURES per annum (i.e. 11.5% of the total 820 million
UK online shopping deliveries expected in 2008)
IMRG has gained extensive first-hand knowledge of just exactly what can go wrong with home shopping
deliveries through its operation of the ISIS trust scheme since 2000. The two primary causes of home
delivery problems are communication failure or the lack of suitable delivery options, with
innumerable variations of each and combinations of both.
“ ”
Looking at the research and our own experience, it appears
that 3/4 of failed deliveries are due to customer error:
'address entered incorrectly' .'just went out for 10 mins', etc.
Retailer
This quote from IMRG's 2005 market review indicates that the retailer
considers it to be a 'customer error' if they are not in and available at all
times to receive an unscheduled delivery. So the first thing this retailer
needs is a change of attitude.
Communication failures may start out as simple errors, such as shoppers accidentally miskeying their
address information; we all make mistakes, so this kind of problem is common. But if such a mistake is
not picked up and corrected (as credit card miskeyings are), it may be passed on to the retailer, who may
then fulfil the order and pass the bad address on to the carrier. The incorrect address may be that of a
real home, in which case the carrier may then make several failed attempts to deliver the goods or, worse
still, successfully deliver the goods into the wrong hands, creating further delay, hassle and opportunity
for loss. Meanwhile, the shopper may be getting very annoyed with the retailer that their goods have not
arrived, generating emails and phone calls that the retailer has to respond to using costly resources, and
demanding that replacement goods are sent out. Such problems are all too common, and can take
weeks to unravel.
IMRG routinely encounters such chaos, and the costs to all concerned can often run into hundreds of
pounds if valuable goods are involved.
Such problems may be easy to avoid: just flagging to shoppers the importance of correct data helps; a
simple address checking system, such as the payment industry uses to spot the entry of wrong number
of digits or impossible dates, would catch many simple input errors.
“ ”
Specific delivery instructions are not very helpful as these
typically are: 'Call 10 minutes before delivery'...or ...'leave on
porch if not in'...or...'deliver between 9.00 and 9.30'....etc. And
of course these people have only paid for standard delivery.
Retailer
Given the potential complexities of home delivery, you might expect that retailers would encourage
shoppers to add specific delivery instructions, but most do not, as the following table shows. The fact is
that even if shoppers give helpful instructions, there is often no way of responding to them. So the holes
in the system keep filling up with annoying, expensive problems.
Communication failure is of course exacerbated by a lack of suitable delivery options. Retailers are
responsible for goods successfully reaching the customer in good condition, and so may force a
signature to be collected when that is quite unnecessary (for example with low-cost goods), thereby
causing avoidable delivery failures. The retailer may not be aware of any downstream problems that
their signature demand may trigger - they simply ship the goods and hear no more, so assume that
everything is okay. Even if the retailer is aware of such problems, as long as the cost is borne by the
carrier, and there is no comeback, they may see it as an easy way to mitigate risk.
Each Christmas we see a huge spike in online sales as millions of shoppers buy gifts and supplies
online. Having items gift wrapped and sent directly to the recipient is highly popular with time-pressured
people. However, as the chart below shows, the research revealed that 94% of retailers surveyed in
2005 did not allow shoppers to split their order across multiple delivery addresses, forcing shoppers to
place multiple orders.
IMRG partners with Fulfilment & e.logistics, the leading printed and online periodical on multi-channel
fulfilment, and together we have created an online Delivery Resource Centre that contains a
PARCEL CARRIER SERVICE GUIDE, a section on UNATTENDED AND DEFERRED DELIVERY
SOLUTIONS, a fulfilment and logistics GLOSSARY, and much more (www.fulfilmentguide.com/IMRG).
www.fulfilmentguide.com/IMRG
Whatever your discipline - sales, customer service, marketing - Fulfilment & e.logistics will bring you up to
speed with essential topics like unattended delivery solutions, text and email alerting systems, carrier
services and website integration.
To activate your personal registration, just go to www.fulfilonline.co.uk/register and fill in a simple form.
Normally you have to show you are an 'eligible reader' to get on to the magazine's free list, but if you
enter your offer code as IMRG1, your application should be waved through.
Innovative new, large scale fulfilment solutions being introduced indicate that
IMRG's target of 100% industry-wide delivery success will be achievable.
A primary reason for the internet's phenomenal growth is that every emerging problem is pounced on by
people around the world who see them as opportunities, and internet shopping delivery is no different.
During recent years, a raft of innovative e-retail fulfilment solutions have emerged, and there are more in
the pipeline. Here are just some of them.
Two IMRG members, BT and ByBox, are working together to transform the country's network of 80,000
payphones into internet shopping delivery points. The first units will be deployed in main commuter
locations in October 2008, ready for the Christmas rush. Not only will they guarantee 100% delivery
success, with efficient overnight distribution, and enable pickup at the consumer's convenience, they will
also take the hassle out of returning parcels. Is this the holy grail of efficient distribution: consolidated
deliveries that succeed first time?
Pic 2. Safe and sound. Secure delivery boxes, such as this Hippo Box
ensure successful delivery first time every time.
Delivery boxes that you bolt to the wall of your house or garage are not new, but large scale consumer
take-up of them is. With more and more workplaces prohibiting personal deliveries, and the provision of
a local delivery solution set to become a popular income stream for members of the public, these can be
a good fix for ensuring you get parcels instead of yet more failed delivery cards. This version will take
your mail so the burglars do not know you are away.
© IMRG 2008 www.imrg.org/IDIS - delivery@imrg.org - 07000 46 46 74 page 15 of 36
Valuing Home Delivery 2008: e-Retail Industry Review - JULY 2008
When IKEA started selling online, the service was an immediate success with the public. So much so
that the available fulfilment resources soon proved to be less than ideal, for example, often requiring
consumers to stay in for a whole day. As a result, IKEA has set about creating a retailer-led operation to
enable other retailers with similar challenges work together to provide the delivery solutions that they and
their customers need.
With almost everyone carrying a mobile phone these days, innovative SMS messaging is increasingly
being integrated into e-retail services, especially for delivery reminders and advice, and to flag problems
early on to minimize inconvenience all round. Automated text message updates inform shoppers of the
estimated arrival time of their goods, streamlining the interaction between the retailer and its customers.
Pic 5. Royal Mail's Delivery Promise tool. This online consultancy tool
helps retailers to improve their customer service.
Royal Mail recently launched a new online consultancy tool to help e-retailers make sure they offer
consumers the best possible experience and reduce shopping basket abandonment. The tool can
analyse any e-retail website, monitoring the quality and availability of delivery information such as cost,
time, tracking, delivery options and contact details. It produces a detailed report which includes
recommendations on how each website can improve its service.
©
*IDIS: the internet delivery trust scheme - allied to the ISIS trust scheme
The IDIS badge was designed to enable shoppers to easily identify retailers who are investing in
appropriate and reliable home delivery services. IDIS was publicly launched on BBC TV News on
Tuesday 6 December 2005.
PHASE
I D I S D E L I V E R A B L E S
1 2 3 4
The IDIS BRAND and strategy 3
New research on current perceived good practice and bad practice and their effects 3 3 3 3
A template for good e-retail delivery service (What does 'good' look like?) 3 3 3 3
IDIS ONLINE SHOPPER DELIVERY CHARTER and associated IDIS Retailer Accreditation 3 3 3 3
Scheme (allied to the ISIS Trust Scheme)
Research definitions for a set of cost benefit models that convey the value opportunity of good 3 3 3 3
practice
VALUING HOME DELIVERY REPORT: A COST-BENEFIT ANALYSIS (33 pages) 3 3 3
A SOLUTIONS MATRIX detailing all of the transporters and co-suppliers together with their options 3 3 3
Guidelines for retailers 3 3 3
DELIVERY RESOURCE CENTRE FOR RETAILERS: Parcel Carrier Service Guide / Retailers - 3 3
Rate your Delivery Options (D-I-Y rating system) / Glossary of Fulfilment & Logistics Terms*
Guidelines for transporters and facilitators 3 3
Model terms for retailers 3 3
GENERIC KEY PERFORMANCE INDICATORS FOR B2C TRANSPORTER PERFORMANCE 3 3
AN ONLINE INTERACTIVE COST-BENEFIT MODEL FOR RETAILERS 3 3 3
A GLOSSARY of e-retail delivery terms, definitions and meanings that will apply across the three 3 3 3
primary stakeholder groups to ensure consistent interpretation of the IDIS Charter and its
commitments*
IDIS RETAILER AND TRANSPORTER CHARTER 3
IDIS PROMOTION: An ongoing publicity programme promoting the IDIS scheme to consumers, 3 3 3
industry and government, featuring accredited retailers and transporters, peaking pre-Christmas.
The IDIS Phase 4 PR campaign will set out to achieve high profile media coverage with an
estimated PR value of £25,000+ as a minimum but with a potential of achieving a value of up to
£500,000 if we repeat recent IMRG successes with national broadcasters.
Phases 1, 2 and 3 attracted broad media coverage, including in BBC TV, SKY TV, Radio 4, Retail Week,
Financial Times, Computing, Business Europe, Digital Marketing, Fulfilment & e-logistics, Out-Law.com,
Internet Week, New Media Age, Property Week, IT Week, Netimperitive, VNUNet.com, The Register and
Automotive World.
Chart 13. IDIS deliverables by phase. This chart summarises IDIS deliverables and the phase(s) in which
they were produced.
http://www.imrg.org/IDIS
As an online shopper with an IDIS-accredited retailer, you have the right to:
IDIS is a sub set and extension of the ISIS Code of Practice for e-Commerce:
The following bilateral IDIS Charter sets out mutually dependent principles that RETAILERS and
TRANSPORTER should both aspire to.
The IDIS Charter aims to establish a common understanding within and between the stakeholders of the
interconnected nature of the delivery cycle. This will normalise the trading environment and provide a
known baseline against which all players can be assessed. It does not in itself impose new processes or
commitments on any of the stakeholders.
USE SUITABLE transporter(s) and co- clearly state what Use suitable transporters
TRANSPORTER(S) supplier(s) to fulfil the type of traffic is Use appropriate
management systems
TO FULFIL THE delivery promise, relevant to their core
DELIVERY PROMISE Not overstate the delivery
consistent with the competencies, and promise
needs of the product acknowledge any less Transporters should:
and the customer, and appropriate traffic for Provide a positive doorstep
accurately reflect the them experience
service(s) offered Be proactive in monitoring
the retailer's delivery
promise and advising where
this is incorrect or
inconsistent
Report performance
information to partners in
line with IDIS-accredited
KPIs
3. Data capture should include:
Data collection should ensure the Delivery details
DATA COLLECTION
ability to capture relevant, real time, Contact details
‘service necessary’ information from Service performance
a number of entry points and to hold Contingency action
5. Commitments between
Agree, understand and regularly partners should cover:
MEET
COMMITMENTS
review stated commitments between Agreed reporting format
ADDRESSING AND are viable, accurate, instructions are Be clearly and consistently
positioned
LABELLING well displayed and can followed within the
Be PAF accurate
carry consumer agreed service
Be 6 line / faced left format
information where specification
Allow for additional delivery
appropriate information
9. PRESENTATION Ensure that ‘delivery’ Ensure where a Sales channels should:
is incorporated as part Transporter / Promote delivery
of the overall service Consumer interface is Explain delivery and returns
offering and is both provided, that Explain the consumer's
responsibility
clear, understandable appropriate, timely
Provide relevant information
and clearly accessible and relevant
information is
provided
At an industry level, the key advance has been the introduction of the gridlock-
breaking IDIS Delivery Manager by MetaPack (IDIS DM), a major innovation in
home delivery for internet shopping that enables e-retailers of all sizes to offer
their customers a variety of delivery options from multiple carriers and services.
IDIS DM, the culmination of the IMRG Delivery forum's work, was announced on 12th November 2007.
It came about as a result of IMRG commissioning MetaPack to help retailers meet the IDIS Charter
standard by providing them with a practical, low-cost, on-demand multi-carrier delivery management
solution. MetaPack, one of the Delivery Charter Founder Sponsors, already provided delivery
management solutions for large clients including John Lewis, Dixons, B&Q and Comet, and so created
for IMRG a scalable solution that made the same functionality available to all retailers at an easily
affordable transactional price. In this way, all of the carrier industry's resources are brought to bear on
the challenge of providing home delivery fit for the internet age.
Now, with IDIS Delivery Manager available, the entire panoply of consumer fulfilment solutions becomes
available for any retailer to offer to their customers, bringing these important changes and benefits for the
e-retail industry:
CONSUMERS can have access to all appropriate delivery choices and complete, relevant, timely
information. By spotting the IDIS logo, they can see which retailers are IDIS chartered and so have
confidence that their delivery promises will be clear and met;
RETAILERS can concentrate on being retailers rather than having to become logistics experts. They
can easily source and manage any and all fulfilment solutions their customers may need. They can
display their IDIS accreditation as a key differentiator;
CARRIERS can compete on a level playing field. Their new or niche services can gain profile and
thereby test real market demand;
E-RETAIL INDUSTRY gains credibility, innovating itself towards excellent customer delivery service.
It also gains visibility of the market's overall delivery performance and therefore can identify, monitor,
measure and react to evolving conditions.
IDIS DM enables all retailers to provide the best available delivery services at all times. If disruption
occurs with the availability of one carrier's service, the retailer can easily switch to alternatives. This is
important because the home shopping environment has developed to the point where:
Online shopping, with its greater need for choice and convenience, has gained a significant foothold,
changing the rules governing the retail market;
Consumers' expectations are changing: they are increasingly demanding more and better information
to inform their online shopping decision-making;
Carriers, through commercial pressures, have already developed most of the solutions necessary to
provide an improved home shopping fulfilment experience;
The increasingly competitive environment in the online space requires maximum efficiencies from all
aspects of an e-retail business.
IMRG estimates that £2 billion of benefit could be realised by industry-wide adoption of IDIS DM,
therefore its strategy is to encourage all retailers to adopt the IDIS Deliver Charter standards, and
Delivery Manager if appropriate, and to support and promote those who do.
“ ”
TSI welcomes this 'IDIS Delivery Manager by MetaPack'
initiative that aims to bring industry-wide improvements to
home delivery for online shoppers. With so many people
now using the internet to shop, it's high time that such
developments were introduced, in order to make home
delivery as efficient and reliable as possible for all. IMRG's
practical approach acknowledges that there are no easy
answers, and sets out to bring all of the delivery industry's
resources to bear on the problem.
Ron Gainsford, CEO, Trading Standards Institute (TSI)
Asos.com is the UK's largest online fashion and beauty store, attracting over one million visitors a
week. With over 53,000 product lines available and 500 new lines added each week, asos.com is the
online shopping destination for many young women. Asos.com went live on IDIS Delivery Manager
by MetaPack in June 2008. Logistics Manager, Stuart Hill, explains why:
"There is real excitement right across the business about how IDIS DM gives us something new and
different for our customers. Every department - customer care, operations, marketing and so on -
wins as a result of the flexibility, choice and control we now have over our fulfilment services.
"Stage one consolidates our fulfilment capability, enabling us to react to carrier issues, manage time
of day cut-off points, and to be proactive when problems occur. For example, when something goes
wrong we don't want to find out about it from the customer calling at 6pm to tell us their delivery has
failed. Instead, IDIS DM gives us real time alerts, flagging that there is a hitch and, so that we can be
doing everything we can to retrieve the situation and get the parcel there, or if necessary, be
contacting the customer first, ideally before 10am, so they don't need to wait in all day.
"In the past, asos.com had a very limited delivery offer; just 'standard' or 'next day'. But the whole
ethos of our business is about giving customers great choice, and in terms of delivery, that means
having multi-carrier options available in order to be able to match our customers' wide ranging
requirements. So we were looking for a solution that would give us carrier flexibility and efficiency
while also being cost effective and easy to use. IDIS DM is the only solution available that gives us
exactly what we need, providing a level of sophistication that would be impossible for us to achieve in-
house. And you don't need to use all of IDIS DM's numerous capabilities - you can just pick what you
need, when you need it.
"The steps are to use the system to dramatically improve our delivery offer. For example, the smart
system will take a view of what is being ordered, the customer's profile and location, the day of week
and time of day, and then offer an optimised suite of available delivery options that best match her
needs. Nobody will provide more convenient delivery options than asos.com."
END
Lighting-Direct.co.uk offers a massive range of over 6,000 lighting and associated products from their
Watford headquarters. They went live on IDIS Delivery Manager by MetaPack on 29 April 2008.
Managing Director, Gary Berg, explains why:
"We ship significant volumes of parcels through a centralised despatch hub, and where previously the
team would have had to decide manually which carrier service to use, by weighing and sizing parcels
and then working out the optimum route by referring to tables, IDIS DM automates the process. This
saves both time and money, which is particularly useful at busy times when it is all too easy for staff to
simply opt for the easy but more expensive route.
"IDIS DM also makes searching for consignments much easier, so when a customer has a query
about their delivery we can respond much more quickly. No matter how we send a parcel out,
everything is searchable, across all of the different carriers, from just one source. But most
importantly, it helps us avoid problems and queries happening in the first place, saving us time,
distraction and expensive call centre costs.
"Looking forward, IDIS DM will allow us to bring other carriers on board by making it much easier to
compare services from, and then work with, multiple carriers. This will enable us to give our
customers more delivery options, and thereby more convenience."
END
12. Research
Delivery inefficiencies are costly, so the IMRG Delivery Forum's first task back in June 2004 was to find
out just how costly, in order to present a business case for fixing the problems. The research remains
ongoing.
In April / May 2005, IMRG researched how 100 UK online retailers were approaching the delivery
challenge. Then, during June / July 2005, IMRG conducted a confidential Retailer Survey in which
retailers collectively generating 100 million online shopping shipments per annum contributed relevant
data about their own fulfilment operations and experiences. The data sample represented approximately
one quarter of the UK online shopping market.
In addition, generic data was captured from a range of industry sources in order to enable IMRG to
control against large contributors' data skewing results, and to allow industry-representative estimates
and assumptions to be made.
Regular input is also received from the IMRG Customer Satisfaction Index, a joint venture with
eDigitalResearch and ipoints, that has tracked the online shopping market since December 2006.
eDigitalResearch also conduct an annual IMRG Delivery Survey: the 2008 survey was conducted in May,
attracting 1,478 respondents. Highlights of the survey results are contained in Appendix D (page 31).
Royal Mail also regularly contributes its Delivery Experience Research, and other data.
Fulfilment & e.logistics, the leading printed and online periodical on multi-channel fulfilment, also
generously provides data, input and support.
Definitions
FIRST TIME DELIVERY FAILURE In this report, FIRST TIME DELIVERY FAILURE is
defined as a delivery for which a signature cannot be
obtained, either from the customer or a designated
customer representative, and this results in the
customer's address being carded and the item
returned to the delivery depot for either redelivery or
customer collection.
Data Source
1. More people would use home delivery if returns were Free of Charge. Transport Studies
2% - 3% more would use it if they could specify that deliveries could be Group 2001
made to another location.
2. 50% of households are empty between 09:00 and 16:00. Transport Studies
Group 2001
3. "Unattended delivery" is increasing due to flexible working patterns, Transport Studies
increases in whole family working and increases in single person Group 2001
households, and this will accelerate as home shopping online
increases.
4. Leaving goods unattended is increasingly unlikely to be deemed Transport Studies
acceptable behaviour in consumer circles, leaving sender / carrier Group 2001
liable.
5. According to one delivery company using CDP / Box solutions, they Transport Studies
have been able to increase the number of deliveries their drivers can Group 2001
make by up to 50%.
6. DTI "Your Home" report / PA Consulting report 2001 says that people DfT Research Oct 2003
would do more home shopping if they were given more delivery
options and would spend more if they could collect their goods from a
railway or petrol station.
7. 2/3 of customers do not use specific e-retailers because of the difficulty Royal Mail Delivery
in returning goods. Experience Research
2007
8. Of customers who register a complaint, 54-70% will buy again if their Tarp study 1998
complaint is resolved. The figure goes up to 95% if the customer feels
the complaint was resolved quickly.
9. On average, firms have a 60 to 70% chance of selling to its current Marketing Metrics
customers again; a 20 to 40% chance of successfully selling to
previous customers; only a 5 to 20% chance of turning prospects into
customers.
10. Number of home deliveries in UK 2000: Small Package 400m (93%) Transport Studies
(DTI study 2001 estimated 420 million), Grocery 6.6m (2%), Large Group 2001
20.5m (5%).
11. 420 million home deliveries excluding postal deliveries = 16 per DfT Research Oct.
household per annum, but estimates range up to 22 per household 2003
according to carriers.
12. In home delivery, 38% of the costs are taken up by the need to Transport Studies
maintain delivery time windows. Group 2001
13. Preferred delivery locations - Verdict Research 2001 - Next door 64%, DfT Research Oct 2003
Post Office 9%, Workplace 7%, Doorstep 7%, Garage (home) 6%,
Local depot 5%, Secure box at home 4%, Local forecourt 1%,
Convenience store 1%, none of the above 5%, don't know 2%.
14. Delivery problems rate third in consumers' frustrations, with delivery Zendor (Direct
costs, difficult returns and packing costs all being mentioned. Response Magazine)
15. The main factors encouraging home shoppers to home shop are: Royal Mail Delivery
- No hidden delivery charges 64% Experience Research
- Fast delivery 62% 2007
- Easy returns 58%
16. Top three barriers to home shopping are: Royal Mail Delivery
- Security concerns 36% Experience Research
- Like to see and feel what buying 16% 2007
- Easier to go to the shops 10%
17. In terms of delivery the most important feature was being able to know Royal Mail Delivery
the exact date so that they could be at home. Over 55s were OK with Experience Research
just the day, whereas 16 -24 years olds want fast delivery and the 2007
ability to pay for urgent deliveries.
18. The majority of those surveyed would pay more for urgent delivery, if Royal Mail Home
needed. Shopping Tracker 2004
19. Lapsed home shoppers cited the following reasons: 3rd - rarely at Royal Mail Home
home 39%; 4th - delivery times inconvenient 38%; 5th - delivery Shopping Tracker 2004
charges too high 32%; 6th - hard to return 32%
20. Non home shoppers cited the following reasons: 4th - rarely at home Royal Mail Home
36%; 6th - delivery times inconvenient 28%; 5th - delivery charges Shopping Tracker 2004
too high 33%; 3rd - hard to return 44%
21. In all cases online shoppers were more concerned about delivery than Royal Mail Home
catalogue shoppers. Shopping Tracker 2004
22. 'Convenience' is the main reason given for customers shopping online, Nielsen Net Ratings
but there is still dissatisfaction with service, particularly delivery. Dec 2004
23. Customer frustration with delivery information leads to shopping cart Royal Mail Delivery
abandonment for 60% of online shoppers. Experience Research
2007
24. 25% of customers reported that they had actually increased the Royal Mail Home
frequency of home shopping as a result of the service. A further 41% Shopping Tracker 2004
thought that they would shop from home more in the future due to the
availability of the service.
25. 83% of people surveyed as part of the Winchester City Council Cherrett and McLeod,
MIRACLES project said that they would use an alternative delivery Home shopping
point to save them missing home deliveries. deliveries, University of
Southampton Jan. 2005
26. 56% of people surveyed as part of the Winchester City Council Cherrett and McLeod,
MIRACLES project said that they missed more than 25% of their home Home shopping
deliveries through no one being at home when the delivery was first deliveries, University of
attempted: Southampton, Jan.
Families missed 29% 2005
Professionals missed 28%
Elderly missed 18%
27. 52% of people surveyed as part of the Winchester City Council Cherrett and McLeod,
MIRACLES project said that a failed delivery usually resulted in a Home shopping
special trip to the delivery depot. deliveries, University of
Southampton Jan. 2005
28. Shopping is the most frequent reason for travel in Great Britain, National Travel Survey
accounting for 20% of all trips in 2004 and for 12% of mileage. 2004
…...
END OF REPORT