Distribution Business Management Association

New Descartes Study: Home Delivery Failures are Causing Negative Consequences for Retailers

Photo by Tima Miroshnichenko from Pexels

Back at the beginning of March, our SCLA Executive Think Tank group heard a fantastic presentation from our colleague Chris Jones, EVP Industry & Services at Descartes Systems Group. Mr. Jones shared insights from his organization's recently released Ecommerce study, which takes a deep dive into online shopping and home delivery sentiments of North Americans and Europeans as of January 2022.

Now, the topic of consumer behaviors surrounding e-commerce may not seem immediately attractive to supply chain leaders. However, as the COVID-19 pandemic has shown us, the end-user in our world—the average consumer—has significant power in shaping the marketplace. Thanks largely to social media and our rising “influencer” culture, individuals’ negative shopping/buying/shipping experiences can potentially harm even the biggest brands out there.

The Descartes study provided some perhaps surprising statistics that underscore why retailers and brands need to pay attention and think more deeply about improving order delivery experiences. Delivery absolutely influences purchasing behaviors.

Consumers Are Having Poor Delivery Experiences

Whether it’s groceries or other categories of goods, the study showed that delivery services of all types are consistently disappointing consumers—to the tune of 73% of respondents across both Europe and North America.

That’s right—73% of those surveyed reported that they experienced some type of delivery failure within the preceding three months. To drive the shocking significance of this number home, Mr. Jones noted a truth about our expectations in the supply chain industry. That is, we like to see service levels in the 90s. Yet, here we have a situation where nearly 3 of every 4 people had a problem!

But the unfortunate thing is that many shoppers blame the retailer and vow not to shop with them again—especially here in the USA. (Europeans more readily put the blame directly on the delivery companies.) This may seem unfair, though it shows that delivery providers must do better for consumers or risk contributing to their customers’ reputational damage and loss of business.

The Descartes study reveals that 17% of consumers who had that poor delivery experience said they told family and friends to avoid the associated retailer. While there wasn’t a specific question about how many of those warnings were given online via social media posts, we can assume that many were—and then the warning has a multiplier effect.

Mr. Jones said, “how many people know about the experience now that you’ve told family and friends?” If that’s online, it could be hundreds or even thousands who might be influenced. (He noted that future studies would include a question about how people share their experiences.)

Why the Data Matters: Almost Half of All Consumers are Now Purchasing Online

Before the COVID-19 pandemic struck, 35% of consumers were purchasing online and having those orders delivered. That number has jumped to 46% as of the beginning of this year. And that number is, of course, growing (mainly among the 55+ population who hadn’t really shopped online before).

So, How Do We Fix Delivery?

Our group discussed some ways that delivery experiences might be improved; however, each “solution” is also complicated. After all, delivery is not easy. And many companies out there believe that if the experience they can provide is just slightly better than what everyone else is doing, they’re safe from reputational damage. (That’s not a safe assumption.)

What the data points to as imperative to providing a better delivery experience is giving consumers a choice. These are some of the top things that consumers are looking for when it comes to delivery options:

  • Being able to combine orders over a period of time into a single delivery. (Amazon has begun doing this with Prime Delivery Day.)
  • Ability to combine orders over a period to be delivered when there are other deliveries nearby. (Can be promoted as a more environmentally friendly option.)
  • Being able to pay for faster/more convenient delivery. (Consumers now expect free delivery, so paid options are considered premium in experience.)

The good news is that offering these types of options can be done in ways beneficial to a retailer’s bottom line. A win-win.

What about BOPUS?

Our discussion also touched on the “buy online, pick up in-store” (BOPUS) concept that’s been around for a while but which gained some popularity during the pandemic.

Unfortunately, because so many variables go into making BOPUS successful at an individual store level, this service may even be more challenging to make into a high-performer in the eyes of consumers than at-home delivery. Some big retailers are getting good at executing BOPUS (Target was named as an example), but it is not a preferred service option for many.

What Are Your Experiences?

The survey results illuminated that e-commerce adoption by consumers in all age groups continues to expand. That means we must determine how to make delivery better so that our valued online retailers and brands don’t continue to be blamed for problems that are ultimately out of their control.

Solutions to the problem of terrible delivery experiences are beginning to appear, but we have a long way to go.

Has your organization been affected by consumers’ negative experiences with delivery services? Or are you working on solving delivery? We’d love to hear from you at SCLA!

Future sessions are planned to talk more about these kinds of issues (including creative solutions to “last mile” delivery)—and so much more. I invite you to connect with us on LinkedIn This email address is being protected from spambots. You need JavaScript enabled to view it.

Back at the beginning of March, our SCLA Executive Think Tank group heard a fantastic presentation from our colleague Chris Jones, EVP Industry & Services at Descartes Systems Group. Mr. Jones shared insights from his organization’s recently released Ecommerce study, which takes a deep dive into online shopping and home delivery sentiments of North Americans and Europeans as of January 2022.

Now, the topic of consumer behaviors surrounding e-commerce may not seem immediately attractive to supply chain leaders. However, as the COVID-19 pandemic has shown us, the end-user in our world—the average consumer—has significant power in shaping the marketplace. Thanks largely to social media and our rising “influencer” culture, individuals’ negative shopping/buying/shipping experiences can potentially harm even the biggest brands out there.

The Descartes study provided some perhaps surprising statistics that underscore why retailers and brands need to pay attention and think more deeply about improving order delivery experiences. Delivery absolutely influences purchasing behaviors.

Consumers Are Having Poor Delivery Experiences

Whether it’s groceries or other categories of goods, the study showed that delivery services of all types are consistently disappointing consumers—to the tune of 73% of respondents across both Europe and North America.

That’s right—73% of those surveyed reported that they experienced some type of delivery failure within the preceding three months. To drive the shocking significance of this number home, Mr. Jones noted a truth about our expectations in the supply chain industry. That is, we like to see service levels in the 90s. Yet, here we have a situation where nearly 3 of every 4 people had a problem!

But the unfortunate thing is that many shoppers blame the retailer and vow not to shop with them again—especially here in the USA. (Europeans more readily put the blame directly on the delivery companies.) This may seem unfair, though it shows that delivery providers must do better for consumers or risk contributing to their customers’ reputational damage and loss of business.

The Descartes study reveals that 17% of consumers who had that poor delivery experience said they told family and friends to avoid the associated retailer. While there wasn’t a specific question about how many of those warnings were given online via social media posts, we can assume that many were—and then the warning has a multiplier effect.

Mr. Jones said, “how many people know about the experience now that you’ve told family and friends?” If that’s online, it could be hundreds or even thousands who might be influenced. (He noted that future studies would include a question about how people share their experiences.)

Why the Data Matters: Almost Half of All Consumers are Now Purchasing Online

Before the COVID-19 pandemic struck, 35% of consumers were purchasing online and having those orders delivered. That number has jumped to 46% as of the beginning of this year. And that number is, of course, growing (mainly among the 55+ population who hadn’t really shopped online before).

So, How Do We Fix Delivery?

Our group discussed some ways that delivery experiences might be improved; however, each “solution” is also complicated. After all, delivery is not easy. And many companies out there believe that if the experience they can provide is just slightly better than what everyone else is doing, they’re safe from reputational damage. (That’s not a safe assumption.)

What the data points to as imperative to providing a better delivery experience is giving consumers a choice. These are some of the top things that consumers are looking for when it comes to delivery options:

  • Being able to combine orders over a period of time into a single delivery. (Amazon has begun doing this with Prime Delivery Day.)
  • Ability to combine orders over a period to be delivered when there are other deliveries nearby. (Can be promoted as a more environmentally friendly option.)
  • Being able to pay for faster/more convenient delivery. (Consumers now expect free delivery, so paid options are considered premium in experience.)

The good news is that offering these types of options can be done in ways beneficial to a retailer’s bottom line. A win-win.

What about BOPUS?

Our discussion also touched on the “buy online, pick up in-store” (BOPUS) concept that’s been around for a while but which gained some popularity during the pandemic.

Unfortunately, because so many variables go into making BOPUS successful at an individual store level, this service may even be more challenging to make into a high-performer in the eyes of consumers than at-home delivery. Some big retailers are getting good at executing BOPUS (Target was named as an example), but it is not a preferred service option for many.

What Are Your Experiences?

The survey results illuminated that e-commerce adoption by consumers in all age groups continues to expand. That means we must determine how to make delivery better so that our valued online retailers and brands don’t continue to be blamed for problems that are ultimately out of their control.

Solutions to the problem of terrible delivery experiences are beginning to appear, but we have a long way to go.

Has your organization been affected by consumers’ negative experiences with delivery services? Or are you working on solving delivery? We’d love to hear from you at SCLA!

Future sessions are planned to talk more about these kinds of issues (including creative solutions to “last mile” delivery)—and so much more. I invite you to connect with SCLA on LinkedIn This email address is being protected from spambots. You need JavaScript enabled to view it.


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Wednesday, 29 June 2022

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