Australian retailers are still re-calibrating after the seismic shifts caused by the Covid-19 pandemic.
From Doddle APAC CEO Justin Dery.
More business than ever is now being done online, where margins are often weaker than in-store. For Australian retail in particular, this is due to barriers such as distance, low population density and high labor rates, which add to delivery costs. To top this off, consumer expectations for delivery and returns are only rising.
It has never been more important for retailers to deal with the new demands and expectations of customers. Our research shows that a staggering 87% of Australian consumers plan to keep shopping more online after Covid. Retailers need to understand what motivates these consumers when it comes to delivery and returns. That understanding will then help them improve margins on online sales through more efficient deliveries and returns, and add customer lifetime value by providing them with better experiences in these crucial areas.
The boom in ecommerce sales over the past 12 months has shown that consumers are open to new shopping opportunities, including new delivery experiences. Throughout 2020, government restrictions meant most retailers had to offer contactless delivery or pick-up. The familiar concept of click-and-collect went contactless and we saw new iterations of the idea, like drive-and-collect, where employees deliver goods directly to a customer's car.
We found that 61% of shoppers want to try new delivery options, but only 30% over the past year. This indicates an unmet demand for alternative delivery solutions and an opportunity for retailers to expand the fulfillment options available to consumers. This could help reduce overall delivery costs as consolidated deliveries are more efficient. It is clear that delivering 100 online orders to one store for customers to pick up is far more cost effective than delivering 100 online orders to each customer's doorstep.
Convenience has become a major driver for consumers in Australia and has played an important role in the introduction of click and collect. 59% of consumers who have used the service or other third-party pick-up in the past 12 months have done so. So because they can pick up their delivery while they do other things. For these buyers, the collections are “chained” in addition to regular trips to the post office (66%), the supermarket (44%) and the shopping center (32%). This is similar to the PUDO (pick-up and drop-off) delivery model that is used to carry out most online orders in Scandinavia. 66% of Australians said they have the potential to improve shipments here in Australia.
Australian consumers remain incredibly price sensitive and are looking for retailers who offer discounts on their range of products more frequently. However, not only are buyers price sensitive about the products they buy, they also want them to be shipped at a low cost. Our latest research shows that nearly three quarters (73%) of Australian shoppers say they are unwilling to pay a premium for shipping. This could explain why Amazon's Prime offering has struggled to crack our market so far, costing just under $ 60 a year.
Fast shipping is the number one reason to choose a retailer, with nearly two-thirds (61%) of shoppers in Australia shopping. This is a trend that is most pronounced among buyers between the ages of 18 and 44. 53% of them would be more likely to use a pickup point if that meant a faster delivery time.
The PUDO model offers both economic and ecological advantages. The mass delivery of parcels to a PUDO location has a much lower CO2 impact than individual home deliveries. One study suggests that this method reduces emissions by about two-thirds compared to door-to-door delivery.
Younger buyers are more environmentally conscious. 31% of consumers aged 18-29 believe that online shopping has a negative impact on the environment.
We expect sustainability to become a bigger driver of consumer behavior as younger generations focus on this issue.
As a result, forward-thinking retailers are looking for ways to reduce their carbon footprint. For example, Coles recently announced its goal to cut CO2 emissions by 75% by 2030, thanks in part to initiatives in the business like natural cooling solutions, recycling the heat from its refrigerators to warm storage.
Delivery on customer request
Convenience, cost and speed are the defining motivators for buyers in Australia in that order. As a result, home delivery is no longer the solution for fulfilling online orders. Modern consumers demand choice and flexibility and appreciate the possibility of including the parcel collection in their everyday life. New options like Australia Post's Collect and Return network are perfect for convenience, cost and speed. Customers can customize where, how and when they receive their items. At the same time, these new fulfillment methods improve sustainability by consolidating supplies.
As the Australian retail industry evolves, these basic consumer attitudes will underpin change. Retailers who can meet these requirements through their delivery and return offers will ultimately benefit from happier buyers and better margins when selling online.
About Justin Dery
Justin Dery is CEO – Asia Pacific. Justin joined Doddle in 2017 to establish its first international expansion in Australia. He is responsible for managing Doddle's regional go-to-market strategy, including managing the key partnership with Australia Post. Justin is also responsible for developing Doddle's proprietary technology platform with major retailers in the Asia Pacific region.
Prior to joining Doddle, Justin was the founder and CEO of Coverpoint Marketing Group, a Sydney-based full-service digital and brand management agency.
Doddle helps carriers and retailers around the world create e-commerce deliveries and return experiences that attract customers, create differentiation, and drive loyalty. Doddle leverages its fulfillment experience, developed in some of the toughest e-commerce markets in the world, to help retailers and carriers develop industry-leading fulfillment strategies that improve customer experiences, drive sustainable solutions, and increase profitability and efficiency .
Doddle's white label technology enables the creation, implementation and management of a complete ecosystem for off-home delivery and returns. Each of the solutions on their platform are designed to drive loyalty, create cross-sell opportunities, drive efficiency, and meet the need for more sustainable supply chains.
Doddle's expertise and technology are trusted by some of the world's largest retail and logistics companies from ASOS and Amazon to Yamato and Australia Post. Doddle is headquartered in London, UK, and has regional teams in the US, Australia, Europe and Japan.
Please visit doddle.com for more information.