Summary: OOH networks are growing, but there’s one critical barrier limiting its potential – a lack of accessibility at the checkout.
Offering consolidated delivery, better customer experience, emissions reductions, cost savings and more, out-of-home (OOH) deliveries have been a sound investment for carriers and posts expanding their services. Recent headlines in the space include CTT’s recent investment in building 1,000 additional lockers to extend its Delivery Services network, DHL bringing carrier-agnostic lockers to German train stations, and InPost further investing in their €513 million acquisition of French PUDO business Mondial Relay.
Across the board, it looks like OOH networks are growing, but there is one critical barrier that is limiting their potential – a lack of accessibility at the checkout. Shoppers who can’t choose anything but home delivery on checkouts won’t be driving volume into these networks any time soon, and definitely can’t start becoming habitual users of the service.
OOH volume is also driven by two other channels: returns and failed deliveries/redirects. Although using lockers or PUDO networks is advantageous to carriers, the non-direct route redirecting parcels or re-delivering failed parcels to the OOH network is a costly endeavour that requires double the delivery routes and label printing. OOH shouldn’t be used as a backup service, it needs to be something that consumers opt for at the start.
What barriers are retailers facing?
Implementing out-of-home delivery options on checkouts requires the use of technical resources and time for the retailer, both of which are in limited supply. The resources that retailers do have will be prioritised based on what will improve conversions the most. In addition, any retailer that has the technical knowledge and resource will ultimately build their own in the future – so carriers are only seeing profitable volume from a handful of huge retailers.
Retailers are also very protective of checkouts and will often require more approval before any changes or integrations can be applied. Therefore, for retailers to start offering out-of-home delivery on their checkouts, the following conditions need to be met:
The integration needs to have a demonstrably positive impact on conversion and customer experience.
It needs to fit into their technical roadmap, or be easily incorporated into an existing roadmap by requiring minimal time and resource.
How we design for consumer change with our OOH checkouts
Pushing the benefits for retailers
For out-of-home delivery to appear on the checkout, carriers have to both sell to and collaborate with retailers. Carriers build and operate the OOH network, but it’s the retailer who owns the part of the customer journey where they choose how to receive deliveries. That means carriers have to proactively market the benefits of OOH delivery to retailers, and they have to make it easy enough to offer that it becomes worthwhile.
Failing to fully advertise and demonstrate the benefits of OOH lead retailers to dismiss the integration as a carrier project that doesn’t add sufficient value for their shopper. So what are the benefits that carriers need to be talking to their retailer clients about?
We surveyed European retailers to discover the exact the impact of adding OOH to merchant checkouts, the full results can be found in the below report.
Conversion boost – choice and sustainability
Data from Metapack’s 2021 eCommerce Delivery Benchmark suggests that checkout conversion is 38% higher when retailers have the right delivery options. This also includes sustainable options, as 39.3% of consumers revealed they would be more likely to purchase through an online retailer offering an eco-friendly delivery option. Out-of-home delivery allows for consolidation, significantly reducing the number of miles driven, which in turn reduces the greenhouse gas emissions associated with delivery.
Flexibility – the 3rd delivery priority
We know that when it comes to delivery, shoppers care about cost and speed more than anything else – and cost comes first. However, Doddle research also revealed that there’s a third key priority for delivery in the minds of consumers: flexibility.
With 79% of shoppers in the survey saying that flexibility is important to how they choose delivery options, there’s a clear gap in the market. While speed and cost have been prioritised by retailers in terms of how their checkouts display delivery options, very little thought is typically given to how flexibility can be accommodated. This is a crucial benefit of out-of-home deliveries, where items can be picked up at the convenience of the shopper, rather than being delivered at the whim of a routing algorithm.
The same research survey showed that 58% of consumers have returned to pre-pandemic behaviours or are busier than ever before. We expect this flexibility factor will become increasingly important as consumers aren’t at home as often to accept deliveries.
The typical outcome of customers unable to accept delivery is a failed delivery. These aren’t just frustrating for consumers, but costly for retailers. Loqate survey data shows that failed or late delivery is a significant cost to 68% of retail businesses, costing an average of £11.60 per failed order.
By allowing deliveries to happen in bulk to business locations with guaranteed opening hours, out-of-home delivery eliminates failed deliveries and means customers don’t have to wait at home for a parcel. Reducing the failed delivery rate saves retailers money and reduces the prevalence of one of the worst customer experience moments in ecommerce, the ‘sorry we missed you’ card on the doormat.
Results in practice
For Australia Post’s Collect & Return service, Doddle powers checkout integrations for its merchants, including beauty retailer OZ Hair & Beauty. Since implementing OOH delivery options in December 2020, OZ’s overall NPS score has increased by an amazing 8% – with OOH delivery options providing the highest score compared to other delivery services and achieving a perfect 100 NPS score in July 2021.
Guy Nappa, Co-Owner and COO of OZ Hair & Beauty
“Last mile delivery can be a massive pain point with customers and directly impacts how they feel about your business. The Collect service allows customers to take greater control over their deliveries. When they have that, they’ll also have a better experience in the last mile and will be more satisfied with the outcome.”
Carriers need to step in to encourage adoption
If carriers can convince retailers that out-of-home delivery options are great for checkout conversion and CX, the next step is to make it easy for retailers to offer those options without placing excessive demand on their technical capabilities. To cover merchants of all sizes, carriers need to be able to offer different levels and types of integration.
Small businesses operating on webstore platforms like Magento or Shopify can be reached using downloadable ecommerce plugins.
At the enterprise level, merchants might already have a location-finder in their checkout journey, and so an API integration can allow them to pull in OOH network data from the carrier, displaying it within their own branded experience.
Creating each of these solutions and designing a customer journey through a location finder is a big ask for carriers’ technical teams, however. Doddle’s checkout integrations address merchants at every size and scale and can be white-labelled for a parcel carrier, incorporating their out-of-home location data into a fully proven, market-tested checkout journey with leading UX design and millions of transactions processed across the world.
The carrier retains control over the location data and access, with the ability to add new locations or turn off existing ones, as well as to analyse parcel volume processed through each location.
To find out more about how Doddle can bring your brand and OOH network to your merchants’ checkouts, talk to us.
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