Why delivery is playing a starring role in the retail customer experience

All one needs to do to understand about how critical delivery service is today is to read the headlines.

Everyone, from Amazon to Walmart to Kroger to the mid-size and smaller retailers, is debuting and enhancing purchase delivery options.

The expanding list includes two-day, one-day, two-hour, and kiosk pick-up in and outside the store, and they're all quickly becoming the norm. There's even package drop inside a home and in car trunks, thanks to Amazon.

Amazon also just announced two-day free delivery for its Whole Foods grocery customers in Denver, Sacramento and San Diego, which brings its Whole Foods Market service delivery to 10 cities via the Prime membership program.

In early May Target debuted a nationwide next-day delivery service, called Target Restock, across 11 markets as the initial leg for a national rollout. The goal is to reduce shopping inconvenience and make life easier for consumers — it offers consumers the ability to order living essentials as late as 7 p.m. for next-day delivery, free to the retailer's REDcard holders and a nominal $2.99 cost to non-card members.

What’s driving all this? Consumer expectation — the quest to provide the best customer experience, and of course, a focus on boosting the bottom line in the ever-competitive retail marketplace.

Simply put, the once-bright luster of same-day delivery is dulling fast.

"Customized delivery no longer just means to the home door," said Chris Petersen, retail customer experience expert and blogger, in an email interview with Retail Customer Experience. "Increasingly, customers value delivery options at other locations such as lockers, or even the trunk of their cars."

Delivery is no longer just "e-commerce to home," added Petersen. "It is now a complex part of the omnichannel ecosystem. The shortest 'last mile' is from the local store to the customer’s door. There are new technologies and platforms to enable shipments from stores. Not only does that lower costs for retailers, it can greatly expedite delivery for customers."

As Petersen explained, the race for that last mile is getting faster and more expensive.

"Many retailers are now strategically partnering with distributors on overnight drop shipments. With this strategy, they can carry less inventory, and still offer the consumer more choice, and beat Amazon on delivery."

The payoff is clear: enhanced delivery channels drive a satisfied customer experience and boost sales. A recent study, for example, related how Panera's expanded delivery service nationwide is now responsible for 30 percent of its digital sales.

And as Retail Customer Experience reported in mid May a national delivery partnership between Chipotle Mexican Grill and DoorDash is proving to be a lucrative strategy as the restaurant has seen a 667 percent spike in weekly delivery orders since debuting the new delivery option which makes deliveries at more than 1,500 locations nationwide.

Not too shabby.

A customer experience differentiator

In fact, given all the delivery developments across the retail sector, it's not off base to view the aspect of delivery as critical as pricing and a viable strategy in making the retail experience as seamless as possible.

"It's now a competitive differentiator," Karla Guarino, vice president of business development for Meridian, told Retail Customer Experience in an email interview. "It appears as though products and services originally designed to increase convenience is turning into a requirement, rather than a nice-to-have."

Meridian provides design, consulting, software, service and support for kiosks and other self-service devices and supplies some of the largest companies in the world with their self-service solutions including Walmart, FedEx, and Toshiba. The consumer expectation, explained Guarino, is the prime driver when it comes to delivery evolution.

"I believe the online age has created this 'now' culture for everyone where they find information at their fingertips at any time of the day," she said, adding, "somehow along the way, this has been translated into, 'I can actually have material goods and services at any time of day' as well."

Meridian Founder and CEO Chris Gilder describes delivery as a "huge part" of the customer experience.

"Consumers are used to ordering from the large online retailers and getting amazing speed on delivery. It's becoming the norm for many," he told Retail Customer Experience in an email interview.

"Waiting a week for something is becoming a thing of the past, and companies taking that long or longer for in stock goods will soon be a thing of the past," he said. "It's becoming more about time than discounts for many people, however companies offering free fast delivery are at the front of the pack for most online shoppers."

Petersen points to customers as the culprit in moving the goal posts on retail delivery expectations.

"While 'free' is always a factor, the new expectation is being able to custom tailor delivery, and change delivery location," he said, citing a study that reported 60 percent of consumers now expect detailed tracking/notices on delivery, and more than a third expect the ability to tailor delivery location and hours once the package has shipped from the distribution center.

Tips, advice for getting on the delivery bandwagon

For retailers that haven't begun focusing on enhancing and expanding delivery options, it’s time to jump on the bandwagon. One best practice strategy, said Guardino, is to view your business retail habits first and then zone in on your competition.

"If your hours are 9 a.m. to 6 p.m. Monday to Friday but your competition now has package pickup 24x7, unless your products are drastically different, convenience and speed rules and you don't need to pay overtime for that after-hours help any longer," she said.

Efficiency is a winning strategy for retailers and the customer, noted Gilder.

"Having a streamlined pick up service is key for in-store pick up, and if they [retailers] offer home delivery, they need to ensure clear and accurate information is provided at the time of purchase," he advised.

On the horizon

Going forward the experts don't expect delivery to lose its importance. In fact, delivery may eclipse pricing in the realm of the consumer experience and is expected to only become a greater force in the retail customer experience.

"Delivery and pick up outside of the normal time frame will be a front runner," said Guarino. "Consumers who are racing to drop off packages before the location closes at rush hour can now relax a little bit more, so the convenience of after-hours pickups or drop offs offer the appeal of lower stress, bringing a little more happy into your day, which is powerful."

Guilder predicts "significant growth" in delivery strategies over the next five years as consumers, and retailers, strive to provide the ultimate streamlined pick-up experience.

"Who wants to pick up in a store if you still have to stand in the check-out line with everyone else?"

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