Autumn 2007

There were signs of increasing recognition of mutual challenges and opportunities at Triangle Management Services' Express Delivery conference this year. Fulfilment & e.logistics reports

Who should take responsibility for successful home deliveries? At what point does that responsibility pass from retailer to carrier? How should we measure success, anyway? And is success being thwarted by unnecessary constraints such as an insistence by retailers on capturing a consumer signature, even when the product value is relatively low?

These were among key issues raised and debated at this year's Express Delivery Conference. It was one of the liveliest in this annual series so far, with plenty of participation from both shippers and carriers. It was also marked by a sense of closer cooperation between the two parties - illustrated by several joint presentations. As Chris Bowden of Home Delivery Network commented at one point: 'If we all listened to customers more, we'd all be better directed about what to do in the future.'

The event was also the first in the series to co-host IMRG's Delivery Workshop - an arrangement that prompted plenty of cross-fertilisation of ideas.

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'An appropriate level of risk'

'There's a perception in some parts of the home shopping market that a 95 per cent delivery rate success is good, yet IMRG says 26.9 per cent of customers are dissatisfied with delivery services. Something doesn't add up here.' That was the characteristically challenging opening gambit in a presentation from Walter Blackwood, chief executive of Home Delivery Network.

The trouble, he said, was that the different parties were measuring success in different ways. There was sometimes a lack of appreciation that what might look like a mechanical process actually translated into a customer experience, with knock-on implications for the retailer in question.

Blackwood presented a slightly tongue-in-cheek list of demands made by less informed retailers in regard to their delivery service, explaining why their requirements were flawed.

Make an appointment 48 hours in advance to be served

He acknowledged that consumers had to participate in the delivery process in order to receive large items, but added that 'the vast majority don't need to.' He suggested it was often carriers themselves, rather than retailers, who were insisting on having a customer signature as proof of delivery. As he commented later: 'Let's take an appropriate level of risk.'

He commended wine home delivery companies for their commonsense approach; he said were good at 'putting the product where they were told', and suggested a similar flexibility would contribute enormously to delivery success on other items.

You can choose any product line, but we can't tell you when it will be available to buy

'Too many retailers basically say 'We won't tell you when we're delivering, but make sure you're there when we do'.'

Don't ask the van man anything, he's not allowed to discuss it with you

Retailers were sometimes forgetting that to the consumer, the delivery driver was simply the agent of the supplier. Too often the carrier was prevented from taking instructions such as to deliver a consignment elsewhere.

We hope it goes all right

This summed up the attitude still held by a large proportion of home shopping companies, Blackwood suggested.

His list of remedies included:

- Negotiate with the consumer

- Communicate more effectively. 'This is critical.'

- Accept compromise, especially on security. 'The loss rate might not be acceptable on a £500 computer, but it could be on a £50 item.'

- Recover elegantly

- Report more effectively

Technology was critical to success, Blackwood acknowledged, but systems were equally important. 'Who takes ownership of communication with the consumer? Is it the carrier or the retailer? It's crucial to get this established.' He also thought there was a need for later collection and delivery times.

On environment issues, he put in a plea for a rational approach. 'Solutions should be relevant, sustainable and credible,' he said. 'We don't want 'greenwash'.'

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'Equal shares of the good and not so good'

Could shipper-carrier relationships really be developed in a way that was productive to all parties? That was the focus of a main session at the event, and several speakers gave a positive response.

Screwfix Direct had developed an unusual three-way partnership involving two carriers, ANC and Parcelforce Worldwide. Chris Ramwell-Smith, who had been head of transport at Screwfix when this was set up, was convinced that partnership 'is the only way.'

He noted that 90 per cent of the company's deliveries were made to private addresses, even thought the customer profile was business-to-business. He explained that the company had previously used various carriers including Parcelforce and Lynx, but then put the operation out to tender. Key requirements included collections up to midnight, Sunday collections for Monday delivery, and deliveries made later in the day.

ANC and Parcelforce, who had been appointed jointly, were now coming to terms with the implications of this arrangement. Henry Rusch, IT director of ANC suggested: 'Both parties need to feel challenged, but also to feel profitable.'

Dick Stead, sales and marketing director of Parcelforce Worldwide, commented: 'In the past, when we were vying with other carriers, we could never have understood how we could work together. Then Chris told us we'd be getting equal shares of the good and not so good traffic, and it started to make sense.'

He added: 'It's early days. We're still trying to understand each other. But it's a start.'

Various advances had been made under the new system. ANC for instance was making trailer collections up to 12.30am, and direct supplier collections. It was also offering deliveries up to 6.30 pm and on Saturdays as normal.

Dick Stead reported similar developments at Parcelforce. 'There are cost challenges,' he admitted, 'but we're building up volumes, which enables us to be more cost-effective.'

Next Directory and Parcelnet have an unusual two-way relationship. Parcelnet delivers for Next via its large 'lifestyle courier' network, while Next has this year developed a two-man delivery operation called Ventura Network Distribution, which also does delivery work for Parcelnet. 'The Ventura development was a complete role reversal for us,' said Next Director distribution director Pat Lee, adding that it prompted 'quite an interesting dialogue' with Parcelnet. He summed up: 'It's a partnership that works.'.

Carole Woodhead, managing director of Parcelnet, said the contract between the two companies was long-standing, and gave them both confidence. A recent development had been a relationship with Bondelivery in Northern Ireland, which had been successful enough to boost Next Directory sales there by 17 per cent.

Pat Lee said the best delivery resource in the operation was the relationship struck between consumers and couriers, and cited bi-annual research showing that customer satisfaction with delivery service was currently running at 87 per cent, and 72 per cent of users would be happy to recommend the service to others.

Describing the relationship between Home Retail Group (Argos's parent) and Home Delivery Network, Home Retail's Tim O'Grady called it one of 'constant interaction'. Chris Bowden, HDNL commercial director, agreed. 'Listening to the retail is crucial to partnership,' he said, adding: 'Our staff go into each other's sites all the time, and we hold open forums.' He felt that home delivery was 'a really exciting space to be in'.

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'Web sites tend to deliver what people want'

E-retail is destined to play an increasingly important role in everyday life, said Colum Joyce, an ex-DHL man who described himself as a social anthropologist, and is now IMRG's representative in Europe.

In a wide-ranging talk reviewing issues raised by e-retail and home delivery, Joyce said e-retail was growing not just in volume, but also in its impact on individuals. 'People work longer and harder, and have less time for shopping.' The population was ageing, he added, 'and reduced mobility makes home delivery more important.'

Environmental concerns could also play to this growth, he thought. A study in Finland had shown that home delivery could be up to 93 per cent more efficient than shopping by individuals, though distance and delivery density had a fundamental impact. 'Achieving density is easy in city centres, less so elsewhere.'

He pointed out that environmental awareness was making people more discerning when buying - manifested for example in increased demand for local produce. However, he also put in a plea for a rational view. 'I like my asparagus out of season,' he commented.

Joyce said e-retail growth was coming in spite of the uneven advances in the underlying technology. 'Google is the single most inefficient way of finding information,' he thought, and demanded: 'When are search engines going to work well?'

He wondered why houses were not being fitted with 'huge data pipes', since these were what a future digital economy would demand. However, he felt there were signs of stabilisation in the way people used web sites. 'They tend to deliver what people want, even if they're not good sites.'

Some early myths about internet shopping had not been borne out in reality, he said. There was less cross-border shopping than predicted, for instance, because of tax issues and worries about lack of technical support. 'And integrated logistics are so inefficient,' he added. Labour and energy costs were keys here, he suggested.

'The high street won't go away,' Joyce acknowledged, pointing to research showing that that when two people shop together, they tend to spend £10 to £15 more than they would alone. Retailers weren't about to sacrifice the gains of this 'peer pressure to buy'.

Nevertheless, the profound impact of e-retail should not be underestimated. It was increasing competition and visibility, and driving strategic changes in business practice. It was presenting opportunities for new revenue streams, though it was also likely to face increasing governance pressures. Brand awareness was also evolving, as was the fragility of brands. 'If a brand image is tarnished it will never recover.'

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E-commerce - bursting with opportunities: Delivery charter v4 unveiled

'Growth in e-retail has been astounding.' That was how James Roper, chairman of IMRG (Interactive Media In Retail Group), launched his opening presentation to the organisation's delivery workshop, which for the first time this year was held in tandem with the Express Delivery conference.

'The internet is bursting with opportunities,' Roper said, describing it as 'a soft market'. Growth was running at half a billion pounds a month, and the figure now stood at £3.49 billion. 'It will never drop below £3 billion again,' he predicted, adding: 'It's energising retail as a whole.'

However, he warned that it was still being held back by delivery problems. Fleshing this out, he admitted that IMRG's customer satisfaction index was currently running at around 78 per cent, which he called 'pretty high'; but he said this had to be set against discontent over delivery performance. In a poll held in May, this came out at 26 per cent, and was 'by far the biggest complaint'.

Indeed, he said that in a new survey, 28.5 per cent of respondents said that delivery concerns sometimes prevented them shopping online at all.

A major weapon in the IMRG armoury is its IDIS (Internet Delivery Is Safe) scheme, and at the conference Roper unveiled a new version of the IDIS charter. This nine-point charter is free for all to consult, and entitles paid-up subscribing IMRG members to display the IDIS logo on their web sites.

The new version fleshes out and sharpens the original, placing slightly different requirements on carriers and shippers, and including a handful of 'good practice indicators' for each of its nine points.

The animated discussion that followed the opening remarks addressed a wide range of home delivery issues. Unattended delivery solutions were given an extensive airing, though it was recognised that it could be difficult to persuade retailers to integrate solutions into their web sites.

One unattended solution supplier complained that retailers were closing their eyes to the reality of delivery problems. 'They should get out there and find out what goes on. A lot of marketing people have never even seen a delivery truck.'