Meeting surging e-commerce demand with diversified fulfilment

16 August 2021 Consultancy.com.au 4 min. read

Faced with an e-commerce surge as snap lockdowns once again drive a shift to online channels, businesses can according to Justin Dery – CEO of Doddle for Asia Pacific – reap huge benefits from diversifying their fulfilment.

For many, 2020 was a milestone year that facilitated digital launches and the establishment of an online presence. However, new innovations led to new challenges, with customers becoming increasingly cost sensitive and particular about where and how they spend their money. For these businesses to stay relevant, they will need to explore fresh methods of retaining existing customers while attracting new ones. 

Meeting modern demands with a diverse set of fulfilment options is one effective way to grab customer attention, keep them coming back, and entice new customers. For those keen to tap into these benefits, there are some straightforward considerations. 

Justin Dery, CEO for Asia Pacific, Doddle

Convenience is the key

While businesses were forced to shift online out of pure necessity in 2020, the changes we’re seeing now are a result of lifestyles and preferences shifting. Convenience is now the primary driver for customers in Australia and has played a significant role in the uptake of click & collect in the market. 

In fact, our research shows that 59 percent of consumers who have used the service or another third-party pick-up in the past 12 months have done so because it provides the convenience of collecting their delivery while doing other things. For these shoppers collections are “trip-chained” alongside regular trips to the Post Office (66%), supermarket (44%) and shopping centre (32%). 

This is similar to the pick-up and drop-off (PUDO) delivery model that fulfils the majority of online orders in Scandinavia, which 66 percent of Australians said had the potential to improve deliveries here in Australia. Australia Post has taken the lead in our market, establishing its collect and return network, the largest PUDO service in Australia. 

The research also indicates that almost three-quarters (73%) of Australian consumers say they are not willing to pay a premium for shipping – which explains why Amazon’s $59/year Prime offering has so far struggled to crack our market. This further emphasises the opportunity for alternative delivery options in Australia that boast convenience over speed. 

The time is now

Our research shows that 61 percent of consumers are eager to try new delivery options, yet only 30 percent have been able to do so in the past year. This suggests an unfulfilled demand for alternative delivery solutions, and an opportunity for small retailers to expand the fulfilment options available to consumers – which could help to reduce overall delivery costs.

Given the boom in online shopping last year – with data from Australia Post revealing that sales online climbed 44 percent year-on-year in January – consumers are increasingly more open to new ways of shopping, and even more so, open to exploring new delivery experiences. This provides a tremendous opportunity for businesses to not only become more cost effective, but to do so in a way that attracts customers. 

While contactless delivery or pick-up options were first introduced out of necessity given government restrictions, it has sparked new interest among customers to explore alternative delivery options that fit their changing lifestyles. We predict that this will continue to be the case for years to come. 

Added benefits

Sustainability is becoming a bigger driver of customer behaviour and forward-thinking retailers are embracing ways to reduce carbon footprints. Implementing the PUDO model, for example, creates a much lower carbon impact by consolidating deliveries, as opposed to running multiple trips to individual homes. One study suggests that this method reduces emissions by around two thirds compared to door-to-door deliveries. 

Environmentally-friendly delivery options are increasingly on the minds of younger customers with 31 percent of consumers aged 18-29 believing that online shopping has a negative impact on the environment. Other generational groups also report that they are increasingly motivated by sustainability. In short, this trend is already making an impact with some shoppers, but its biggest effects are building up, and when they arrive retailers will need to be ready. 

While Australian businesses did an impressive job adopting entirely new, digital ways of working in order to meet customer demands last year, this only marked the beginning of the business changes that lie ahead. We’ve entered a new customer age, where cash strapped Australians have hybrid working and living schedules, and are craving convenience from their consumer experiences.

In order to keep up and stay relevant, diversifying fulfilment can be the added hook that makes a new customer into a returning customer.