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Major disconnect between retailers and consumers when it comes to delivery

More than one-third of consumers (34%) consider home delivery in two or more working days to be the most useful option when online shopping, but only 6% of retailers say this is the most popular delivery option, according to new survey findings from Manhattan Associates.

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The survey of 2,000 Australian consumers and 100 large-end retailers also found that almost 50% of retailers said Click and Collect in two or more working days was the most popular delivery option among customers, which contrasted with only 6% of consumers agreeing that this was the most useful delivery option.

A further 31% of retailers stated that same day home delivery was the most common delivery choice with customers, however, only 8% of consumers consider this to be the most useful choice. Only 27% of retailers reported charging for same day or next day delivery.

“Our research findings indicate a major divide between what retailers believe is the desired delivery option, compared with what consumers really want or find most effective,” Manhattan Associates managing director for Australia and New Zealand, Raghav Sibal said.

“This could mean that the delivery options retailers are offering today are not in line with consumer expectations, leading to unnecessary pressure on already stretched supply chains to deliver goods quicker than consumers actually expect or need them.

“COVID-19 has created an incredibly difficult business environment for many Australian retailers, which means they can’t afford to be carrying any needless costs, such as paying extra to deliver products faster than consumers actually expect.”

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The research found that distribution centres (DCs) are bearing almost the full brunt of the increase in online orders, with only 9% of retailers saying they fulfil online orders from retail store stock. Most retailers (40%) deliver from a regional DC using their own delivery vehicle, 28% deliver from a regional DC using a courier and 28% direct from a supplier.

“Bricks and mortar retail stores are currently experiencing a massive reduction in foot traffic and the number of people purchasing in store. Retailers could be using this as an opportunity to pivot their in-store workforce to fulfil online orders, which would help to ease the pressure on warehouse operations and also add flexibility and cost-effectiveness by fulfilling orders from the location closest to the delivery point,” Sibal said.

Retailers also indicated that their inventory visibility had room for improvement, with only 6% of respondents saying they have accurate inventory insight 100% of the time.

“Retailers can’t sell what they can’t see, and this concerning lack of stock visibility, especially when the bulk of retail activity is currently online, is risking lost sales opportunities. This pandemic is a reminder of just how important it is for retailers to have real-time insights into their supply chain operations and product inventory, so they can stay informed and react quickly to sudden changes in the market.”