Future of Commerce Blog

How Delivery Is Changing Brick-and-Mortar Retail

  |  

We’ve been talking about omnichannel now for the past couple of years. As today’s consumer has more ways to connect and shop, and brands have more channels to sell and promote their products, the line between digital and physical retail are blurred.

The meshing of online and offline retail is introducing more creative fulfillment options. One such fulfillment option is ship from store.

OC&C Strategy Consultants predicted U.K.’s home delivery and BOPIS (buy-online-pickup-in-store) market to double over the next decade. By 2025, they estimate home deliveries to make up 30% of all retail sales.

A global brand that’s jumping on this trend of this idea is Starbucks. They partnered with ecommerce giant Alibaba to create Starbucks Delivery Kitchens.

Since grocery stores around the world are using mobile apps to provide delivery services to their shoppers, is delivery the new retail norm?

The Rise of Retail Delivery and Why Shoppers Love It

There’s a major benefit for retail delivery services: convenience.

Every shopper is after convenience, and “as concepts such as self-checkout (or no-checkout lanes in the case of AmazonGo) continue to grow, last-mile delivery service will play an increasingly important role for retailers to continue to provide increased convenience for their customers,” notes Carlos Castelán, managing director of The Navio Group.

Mobile apps are largely to credit for this change to the industry. Apps like Instacart, FreshDirect, and Postmates let customers shop on their phones, and schedule items to be delivered that same day. “Some [retailers] have even gone so far as to acquire these operations such as Target with Shipt,” notes Castelán.

But delivery is for more than just convenience; it’s also a way for brands to elevate their customer service. Misha Kaura, founder of Darlinghurst Enterprises, which owns a couture and ready-to-wear fashion line, uses this approach for her shoppers.

“I always have the couture (made to measure) apparel pieces hand-delivered,” Kaura says. “It offers a more personalized touch in the delivery process and ensures our customers know that they’re family.”

Delivery Retailers

Subscription boxes have taken the ecommerce world by storm — there’s a box for nearly every niche. Since 2017, the total monthly visitors to subscription company sites has grown 800 percent, and brick-and-mortars are getting in on the action. WineCollective, for example, created a subscription service when they realized that customers were having a hard time choosing which bottle of wine to try.  

Amazon has also made its mark on the idea of retail delivery services, beyond free two-day shipping. Shipping drones — or Prime Air — launched during the 2016 holiday season. “Click to Delivery” they tout about the service that promises to deliver packages in just 13 minutes. They also have plans to launch free two-hour delivery for Whole Foods groceries.

Walmart and Google are also looking to disrupt traditional fulfillment. The two brands are partnering to sell Walmart products on Google Express, the search engine company’s retail delivery site.

How to Begin Delivery for Your Retail Business

“Profitable, last-mile delivery is difficult for retailers to manage,” says Castelán. “In particular, the operational know-how and technologies to manage drivers, routes, and delivery windows is complex and typically not a core skill set for retailers.” This is why it’s absolutely essential to have inventory management software that can integrate with other tools.

Beyond the logistics of inventory management, here are some tips for testing retail delivery in your business:

  1. Use existing platforms.

Note the apps we’ve mentioned above: they’ve already built a customer base and figured out how to make delivery a reality. This is a great way to get started with fewer barriers, as the platform and users are already there.

Castelán recommends checking out Enjoy. The ecommerce site sells high-end tech products and delivers them to shoppers within 30 minutes.

  1. Create your own delivery service.

Try this if you have enough demand, or if you operate in a location that makes sense geographically for deliveries (for example, San Francisco is much more feasible than a small town in rural America).

  1. Encourage higher spending in exchange for free delivery.

Foxtrot is an excellent example. They reward customers who spend a minimum amount each quarter with free delivery services.

  1. Use delivery to enhance the customer experience.

Like Kaura’s example, delivery services can also provide an avenue to build and nurture connections with customers through enhancing the experience. Provide support, ask for feedback, and go the extra mile to acclimate customers to their new purchases.

Enjoy is a great example of this: “the purchase also includes time with a specialist to set up the product in your own home,” Castelán says. “The delivery and in-home setup is all included in the same cost of the product.”

Ready to start offering delivery services for your customers? Find out how to choose the right inventory management software to make it possible >

More Blog Posts

Learn how today's fastest-growing brands manage their inventory.

0 Shares