Australian retailers rethink last-mile delivery
As we emerge through the pandemic and edge ever closer towards a contactless retail environment, renewed emphasis is being placed on last-mile delivery and the experiential advantage it can create for retailers. No one is better positioned to understand and unlock this advantage than Australia Post, who, as custodians of a mind-bending quantity of data, have a unique perspective on the relationship between delivery experience and consumer and commercial outcomes.
Australia Post recently united leading retailers for a canid conversation on empowering consumers to define their own delivery experience. This executive roundtable presented a unique opportunity for attendees to gain early access to insights from Australia Post’s inaugural Delivery Experience Report, which contains five practical recommendations for optimising delivery. Our conversation delved into some of the key learnings from this report.
The importance of delivery experience in the context of eCommerce growth
Last-mile delivery always held weight in the customer’s online shopping experience. But the prolonged lockdown restrictions mandated during the pandemic collapsed years of acceleration in eCommerce into an incredibly short time window. And as consumers’ digital reliance spiked, so too did their eCommerce expectations and demands. The importance of delivery experience was amplified, not only among experienced, high frequency eCommerce users, but also for new online shoppers - especially as online spending categories shifted to essential items. In this context, delivery was not the only enduring physical touchpoint between brands and consumers, but it signified retailers’ understanding of – and commitment to – their customers. As consumers expectations continue to soar, and with eCommerce growth maintaining a strong trajectory - now that bricks-and-mortar has been unlocked, delivery experience will remain a crucial factor in a consumer’s decision to shop online.
The role of delivery experience in customer experience and loyalty
Our understanding of loyalty in retail is evolving. Retailers are looking beyond reward programmes to customer experience - to win consumer allegiances. But customer experience hinges on choice. It is choice that places the consumer in control and empowers them to tailor a personal experience. Consumers are not receptive to this power being taken away from them, regardless of whether the choice that was made on their behalf was the same decision they would have reached on their own account.
These learnings hold true for delivery experience. Retailers must provide choices that extend beyond options for speed, or even click-and-collect. The new battleground is successful first-time delivery, and understanding the impact of signature-on-delivery, authority-to-leave, and carding, especially for apartment dwellers. While experienced eCommerce users understand the delivery constraints of their residence, infrequent and new online shoppers do not appreciate these constraints. The potential result is a negative, first-time delivery experience that has lasting ramifications for that consumer’s relationship with the retailer. The Australia Post App is evolving to empower consumers with delivery options that place the user in control of their delivery experience without adding additional friction at the checkout experience.
Signature, carding, and Safe Drop
Authority to leave and signature on delivery is a source of considerable debate among retailers, with strong opinions resonating on either side of the aisle. Australia Post’s objective is resolute – to achieve successful first-time delivery to the consumer’s location or designated collection point. Carding, predicated by signature on delivery, is the antithesis to successful first-time delivery. From a delivery experience perspective, retailers are reconsidering their reliance on signature on delivery. By accommodating a diverse range of delivery methods, including allowing customers to direct deliveries to alternative locations, retailers are returning control to consumers and improving first time delivery. These alternatives to signature on delivery are not just operationally viable, but represent a strong experiential improvement for low and high-value items alike. It is also important to note that the pandemic grossly skewed delivery data - carding rates naturally plummeted as consumers were at home. These recommendations are based on a pre-COVID assessment, which held true throughout the pandemic notwithstanding lower carding rates. Now, as consumers return to work and pre-pandemic social norms re-emerge, Australia Post is seeing a gradual rise in carding numbers. In response, and to mitigate a relapse to reliance on carding, Australia Post is making significant advances in their app to improve the reliability and security of authority to leave by capturing photo evidence of safe drop locations. This functionality not only provides consumers with greater visibility of, and control over, their delivery experience, but it also enables retailers to reach customers with greater reliability and confidence. To make further strides in delivery experience, retailers must work to educate their customers to leverage extended collection points, and ensure that this functionality does not add unreasonable friction to the customer journey.
The importance of an extended collection network
As digital reliance reached unforeseen heights during the pandemic, consumers accrued a significant amount of eCommerce experience in a highly compressed window of time. A key consumer lesson from this experience was leveraging an extended collection network to define their delivery experience. Where consumers are proactively redirecting parcels away from apartments to alternative locations, Australia Post is seeing a marked increase in NPS. To promote the use of this extended collection network, Australia Post is empowering retailers to promote alternative collection points after sales confirmation when an apartment location is entered at the checkout stage of the customer’s journey. This allows retailers to effectively set delivery expectations without creating friction at the checkout experience, creating the foundation for a positive first-time delivery experience for the customer.
Unlocking competitive advantage in last-mile delivery
The pandemic has drawn renewed attention to the importance of last-mile delivery. In a highly saturated digital environment, retailers that empower their customers to define their own delivery experience have a clear advantage over their competitors. Speed in delivery is fast becoming eclipsed as the primary determinator of a consumer’s delivery experience. It is choice, visibility, and first time delivery that are the new experiential benchmarks in last-mile fulfilment. Retailers need to appreciate the negative impact that carding has on the consumer’s delivery experience, and leverage an extended delivery network and improvements in the reliability of safe-drop to remain competitive.