Dan Ennor, Commercial Director at Global Freight Solutions
A clear and well-prepared delivery strategy can be the stepping stone for retail growth; gaining and retaining customers to help drive revenue. Every facet of delivery, from checkout to doorstep influences the likelihood of that customer purchasing from that retailer again. Poorly executed delivery costs UK retailers up to £1.2 billion in avoidable costs each year, according to IMRG’s latest estimates, which emphasises the importance of choosing the right delivery approach.
So, what aspects of delivery should retailers be investing in as a priority? Where should they be focussing their efforts in order to maximise their return?
Are retailers looking at customer experience incorrectly?
There has been a trend in recent years for retailers to flock towards ‘next day or no cost’ delivery but operational and commercial common sense tells us that there is no such thing as ‘free delivery’ for retailers. The online supply chain has a finite capacity for an ‘everything tomorrow’ approach and retailers need to consider this before jumping to ‘free delivery’ as a first port of call.
There is a real danger of retailers over-promising and under-delivering when the average shopper doesn’t necessarily want a premium delivery option all the time. Every shopper is different, and every delivery may have different requirements depending on what it contains, and why and when it has been ordered. All of this should be taken into account as part of a robust delivery strategy.
Your last-minute shoppers will always want ‘fast and free’ but what most shoppers really want is a clearly communicated delivery offer that follows through on what is promised. Perhaps retailers should instead be looking at offering a broader range of delivery options and the chance to specify when or where the delivery will arrive. Customers wants convenience, so retailers need to offer the widest range of delivery options they can to appease them. This is emphasised by the latest research into consumer delivery from IMRG and Global Freight Solutions, which outlines that in 2018, 41 percent of consumers indicated they had abandoned their cart due to insufficient delivery options.
The Brexit effect
As the deadline for Brexit gets ever closer and remains uncertain, its impact on delivery looms larger.
Up until now, it has provided opportunities for online selling into Europe with a weaker pound making UK retailers a more attractive proposition to EU shoppers. Since the referendum decision at the end of June 2016, we have seen the proportion of UK cross-border volume going to Euro destinations, increase.
However, this may all be about to change. With so much uncertainty surrounding Brexit, there will be a lot to learn about dealing with the EU in the coming months and years, so common sense suggests contingency plans must be made, which should legislate for:
- Longer cross-border delivery lead times
- Reviewing all HS code classification to ensure products attract the correct duties and taxes
- Making changes to customer messaging, in order to manage expectations
- Implementing growth strategies in non-EU markets (eBay, Etsy, Alibaba)
- Enabling transparent delivery and duty cost information at point of checkout
- Implement paperless trading (PLT) services for non-UK destinations to speed customs clearance and reduce transit times
The retail industry is anticipating longer and more complex duty and tax processes, and higher delivery costs with longer delivery lead times into EU markets. Retailers will need to reach out to carrier management experts to navigate this new territory and ensure it doesn’t hamper their business.
Delivering for the right price
The dilemma for retailers is working out how to provide a delivery offering that gives a more specific and sustainable customer experience with better control of costs in both the UK and cross-border environments. That isn’t easy without support.
To make this possible, a multi-carrier approach is required, enabling access to a range of delivery services, using order characteristics and specific customer requirements to offer the right solution from a sensible set of options relevant to the destination country.
So, for ecommerce brands, what are the fundamentals their delivery strategy needs to offer? What is essential in order for their business to be successful?
- Delivery to a designated
- A standard ‘free’ or at low cost option
- An express option at a small premium
- A timed/specified day option at a higher premium (weekend or evening delivery)
- At least one click &
collect option (if available):
- Free in-store collection
- Third-party (pick-up point/locker) at a lower cost than the standard designated address delivery
These solutions are all readily available to retailers, it’s often just a case of pulling them together. But when you are busy running a business, it can be difficult to make the time.
What’s holding retailers back from delivering?
Even if businesses want to offer that ‘Amazon-style’ delivery of both choice and convenience, in order to compete with the likes of Amazon Prime, they are often being hampered by their own internal constraints. For example, the cost and complexity of integrating more delivery options and carriers into their systems may prove a stumbling block. Moreover, the effort in managing multiple carriers at once, particularly for an SME, may be far too big a task. That’s before considering the expertise needed on knowing which services to offer or how to access them.
An affordable delivery strategy
The concept of ‘free delivery’ seems to have deeply engrained itself into the minds of consumers and retailers alike, but many retailers seem so desperate to offer it, they don’t stop to think about whether or not they should first. Provided delivery is well-communicated and well-executed, retailers can remain competitive.
The reality is, not every retailer is going to have the same resources and scope to carry out the delivery approach of the big brands, so it doesn’t make sense to blindly follow them. Retailers need to be devising delivery strategies within the context of their customers, capabilities, and commercial plan. A great delivery offering does not have to break the bank.
Retailers need not be restricted by what they can do in-house either. Enterprise carrier management experts can be of great assistance in these situations when taking it all on alone seems overwhelming or unachievable. These managed service experts can help retailers scale their business cost-effectively through delivery, so that they’re not being wasteful. Convenient delivery options that are supported by clear communication is the way forward for retailers.
THE EMOTIONAL AND FINANCIAL COST OF WORKING WITH OUTDATED TECHNOLOGY
Slow Tech Could Waste 24 Hours of Worktime a Year
In this digital age, businesses are hugely reliant on technology to get work done. And this is especially the case for one-man-bands and small home-based businesses who may count on a single computer to keep things running smoothly from their home office space.
This said, if the technology at hand is slow or outdated, it could become more of a hinderance than a help. Investing in upgraded tech may seem like a steep expense, however, delays cost time and time is money. In fact, recent research looking at the impact of tech troubles in the workplace found that delays caused by slow technology could add up to a hefty 24 days’ worth of worktime a year per person.
Here’s why keeping hold of outdated tech when its past its best could cost your business in the long run.
The biggest tech hold-ups
Delving deeper into the research, it’s evident that the most time can be lost on some of the smallest of tasks. Simply waiting for your computer to boot up, for example, can add up to 8.8 days of lost time over the space of a year (17 minutes a day), while 8.5 days can be lost to opening emails (16.5 minutes a day). Slow software has the most to answer for, however, contributing 10.4 days’ worth of wasted worktime (20 minutes a day). When you think about your own day rate or that of an employee’s, this lost time all adds up to some serious money, right? Probably more than it would cost to upgrade your tech.
Productivity can suffer too
Glitchy tech may not only cost your business time and money; productivity can take a serious hit too. According to the study, a third of workers admit losing motivation when they have to wait on tech to respond. And this comes as no surprise. When faced with freezing programmes and buffering browsers every day, frustration can build up. And when someone’s suffering frustration, productivity and motivation can drop. As a result, it may turn out it’s not just the tech that is slowing down tasks, but a reduction in employee efficiency too.
Tech expert and anti-futurist, Theo Priestley, argues that the issues caused by outdated tech at work can even have a negative effect on someone’s work-life balance and wellbeing. He explains, “not being able to complete work or feel productive or have a sense of accomplishment in a task can be a stressful experience. And depending on the nature of the work, more often than not, employees will need to work additional hours to compensate for the wasted time, which has a knock-on impact on personal and family life.”
Outdated tech can put your business at risk
Beyond the costs to your business, outdated tech can also put it at increased risk of cybercrime. The older the technology, the easier it is for hackers to exploit it. What’s more, if you don’t update your security software regularly, it won’t be equipped to address the latest security threats.
Priestley explains “outdated technology and software means easy exploitation from inside and outside the organisation. If you’re not using the latest versions of operating systems, or software that you’ve invested in, then there’s greater chance for someone to exploit known weaknesses in that system and expose or steal data or valuable company information from them.”
What is the solution?
Regularly assess what condition your hardware and software are in and where delays are occurring. If you find yourself waiting on the same problem day in day out, it’s probably time to do something about it. But how often should you be upgrading your IT equipment?
In general, a computer being used for business could do with being upgraded every two to three years for optimal performance. Alternatively, sometimes simply upgrading the memory or hard drive can help applications run more quickly. Any other equipment such as printers, keyboards, etc. only really need to be replaced when they break.
As for software, upgrade it regularly. While it can be a temptation to stick with older versions that you’ve grown accustomed to, the newer versions will offer improved capabilities, efficiency and security.
While computers slowing down over time seems inevitable and something that we’ve accepted will happen, it’s important for businesses to recognise the problem can have a bigger knock-on effect than you may think. By investing in updated, efficient technology, the savings experienced via productivity are likely to vastly outweigh the price of the tech itself. So, next time your computer freezes, perhaps consider whether it’s time for an upgrade.
OFFSHORE COMPANY FORMATION TACTICS FOR SMEs
James Turner, Director at company formation specialists, Turner Little
Starting a business brings with it its own set of challenges, as well as opportunities. But when setting up a business, the where is often as important as the how, and knowing what to expect in terms of company formation regulations and requirements is key, so you can start your entrepreneurial journey on the right foot.
James Turner, Director at company formation specialists, Turner Little, takes us through what we need to consider when it comes to offshore company formation, and the benefits it can offer start-ups and SMEs.
“Despite what the media will have you believe, there are numerous legitimate reasons to use an offshore company. Offshore companies can often provide SMEs with access to better infrastructure and legal frameworks. Regulations in different parts of the world could prove to be restrictive for businesses by preventing foreign entities from launching factories, buying property or investing in local companies. In this instance, setting up an offshore company can help in completing transactions and provide you with the ability to hold any local assets necessary,” says James.
“However, one of the fundamental reasons for setting up an offshore company is often privacy. Moving assets or setting up a business is often done in a country that offers more tightly protected data security, has a robust legal framework and a network of service providers that streamline the setting up process. Switzerland is often the country of choice when it comes to privacy, as it’s synonymous with security and data privacy. Another reason SMEs should consider setting up an offshore company is tax efficiency. Tax advantages are offered by different jurisdictions. For example, Singapore has one of the lowest corporate tax rates, while the Cayman Islands might be more ideal for freelancers who are looking to minimise the effective tax rate on their businesses,” adds James.
“Offshore companies provide SMEs with the ability to mitigate risks that arise from political instability or currency volatility. We have already seen businesses starting to register European entities in order to limit their exposure to the fallout that may result from Brexit. Whatever the reason, spreading your operations across jurisdictions may be the best long-term business strategy SMEs can adopt to secure future growth,” adds James.
Turner Little specialises in creating bespoke solutions for individuals and businesses of all sizes. The knowledge and expertise of their specialists will be able to assist with any enquires, no matter how complex.
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