October 25, 2021
The world’s best retailers are promoting out-of-home delivery. Carriers should help the rest
Most retailers understand that delivery choice and satisfaction are absolutely key tests of an ecommerce experience. Consumers vote with their wallets, and the winners are those who can offer faster, cheaper or more convenient options. Those don’t have to be the same option, but the ability to choose how and when to receive a purchase is crucial. Data from Metapack’s 2021 eCommerce Delivery Benchmark suggests that checkout conversion is 38% higher when retailers have the right delivery options.
In a YouGov poll commissioned by Doddle, 79% of UK adults said flexibility was an important factor for delivery – coming behind only to cost and speed, which unsurprisingly remain the key considerations. However, even that speed aspect can be flexible, as around half (47%) of consumers would wait longer for a delivery that was more sustainable (Metapack).
There’s one aspect of delivery options that currently sets the best apart from the rest. Out-of-home deliveries are a vital way for retailers to offer customers more flexibility and choice, with nearly three quarters (74%) of UK adults expect to use out-of-home delivery options in future (YouGov / Doddle). However, only the biggest and best retailers in the world are currently integrating out-of-home options into their checkouts.
Amazon is the perfect example. The retailer has united all of its out-of-home delivery options under the Amazon Hub brand, with parcel locker and PUDO (or Locker & Counter, as they’re called) options available. The checkout experience has home delivery by default (in most situations – some products are only eligible for free delivery to Hub locations) but also clearly offers the out-of-home route too.
The full checkout experience includes an easy-to-use location finder, which includes all formats and lists them in order of distance from their postcode. Shoppers can also toggle to select parcel lockers or PUDOs only. Arguably the best etailer in the world has a suitably leading OOH offering – and it’s even keen to incentivise shoppers to adopt, with discount offers.
This French example from Cdiscount highlights another pricing offer, with cheaper express delivery to local collection points than to home. It includes a mixture of PUDOs and dedicated parcel shops.
The reason that these major players are investing in making this happen is that they understand the benefits of out-of-home delivery on checkout conversion, but also because they’re increasingly seeing the value of appealing to shoppers who habitually use OOH delivery options.
We know, based on data shared with us by a top UK ecommerce retailer, that shoppers using pickup and dropoff options for delivery are 138% more valuable (as defined by average basket value) and shop more than twice as often (2.17x order frequency).
But if Amazon et al have recognised that this is best practice for checkouts, many mid-tier retailers aren’t yet there.
This basic checkout is the default across much of ecommerce, for the mid-tier merchant audience, often using a platform like Shopify or Magento to build their business. They frequently don’t offer the out-of-home option at all, much less an intuitive location finder experience.
As a result, they’re missing out on the benefits of out-of-home delivery, because they’re not making it available to their customers. Some retailers will offer a click & collect option, but this will only include their stores and lacks the depth of choice and sheer convenience of a dense PUDO network.
Why only the best are promoting OOH at the checkout
There are three reasons why fixing this isn’t a priority for these retailers, and they all come down to a question of cost and benefit. Firstly, some don’t fully understand the benefit, where it hasn’t been marketed or advised by their carrier partners. Secondly, those who do understand the benefit often feel that the cost of resource and money spent on integrations to make this possible outweighs that benefit, because it does tend to be resource-intensive and complicated for a single retailer to pull all the information about a carrier’s PUDO network into the checkout and display that in a useful and easy way for the customer.
Finally and perhaps most importantly, they’re not being helped through this process. Carriers are not making that integration process simpler and offering plugins for apps like Shopify, BigCommerce, or self-hosted webstore platforms like Magento.
The carrier opportunity
62% of retailers say it’s a high priority to have a flexible logistics network – and a further 13% reckon it’s their most important priority (Metapack). That alone should be a compelling reason for parcel carriers to start working on making their OOH networks more accessible at the checkout. There are other benefits too: by making the network easier to surface at the checkout, carriers become more than just movers of parcels – they’re providing a useful service to merchant customers, making them a more valuable and ‘sticky’ partner in the long term. That reduces churn on the one hand; and on the other, having a simple integration process and an ability to onboard merchants at scale using integrations to common web store solutions also boosts customer acquisition.
As an added bonus, having more checkouts displaying OOH options means driving more volume through the OOH network, with all of the associated efficiency benefits of consolidation: lower cost per parcel, more parcels delivered per mile driven, and lower CO2 emissions per parcel.