I came across a great video on a relatively new start-up in the UK called Shutl that runs an innovative service for retailers to speed up their e-commerce delivery service. And when I say speed up I really mean it as well, the average delivery time is 75 minutes from the time an order is placed and is currently used by Argos, Maplin, Coast and Warehouse. It takes same day delivery to a new level.
Watch the video for more insights; you can then skip to the end of the blog post where I looked in brief at the broader e-commerce delivery service landscape.
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Presented by Tom Allason, Founder and CEO of Shutl, the video has some compelling stats and arguments as to the value of the Shutl service, although I’m not aware of the sources of the data, it does make perfect sense.
Beyond the product and price, delivery is the single biggest influence in determining whether or not a consumer buys from you and continues to buy more or less from you in the future. It also represents the last interaction with customer, so you want to leave a lasting impact.
- Failed delivery attempts or complete delivery failure, the cost of which is often picked up by the retailer, cost businesses £1billion (probably in the UK) last year
- Two thirds of consumers who abandon their purchase cite delivery as reason
- 90% of online shoppers list delivery as top pain point
- On average each year every consumer loses £177.111 in lost time and wages waiting for a delivery
- 61% of online comments about home delivery are negative
Traditional delivery routes are managed through what is called hub and spoke collections. This method of delivery is the only cost effective solution for deliveries above 10 miles. However, less than 10 miles it can often be comparable or even more cost effective to deliver something point to point and essentially deliver straight from A to B.
In the UK big courier companies don’t do point to point delivery. Only 3% of courier companies provide this service. This is where Shutl comes in – it works as an aggregator for pulling these fragmented courier companies together to make a point to point delivery service a viable and affordable solution of retailers and consumers. Tom Allason asks you to think of it “as a kind of PayPal for really awesome delivery” where the delivery promise is 90 minutes and the average delivery time is 70 minutes (on March 7th it was 75 minutes as taken from the Shutl website) for immediate deliveries.
You can also select the exact time you want your purchase(s) to be delivered – 24 hours a day, 7 days a week. As the cost is comparable to traditional hub and spoke delivery methods this can often be free to the consumer.
Customer service and quality is of the up most importance as providing a bad service means that customers won’t use Shutl elsewhere and the lifetime value of consumer is critical to Shutl’s success. So the company does two things.
- It tracks every order and measures the performance of each courier company against delivery SLAs that are set. Each company is given a rating that is affected by the success or failure to delivery on time that in turn impacts the amount of business the courier company will get as part of the aggregator service Shutl provide. The start-up cleverly incentivises fast delivery that in turn boosts the Shutl brand with consumers.
- Shutl request customer feedback after every order that is shared whether it’s good or bad on the company’s website.
Incredibly 26% of shoppers provide feedback completing the full survey.
Furthermore, 81% of respondents rate the service as a 9 or 10 out of ten in terms of their likelihood to recommend. The video concludes that delivery has always been a reason not to buy online, the aim of Shutl is to make customers more likely to buy from a retailer that supports the Shutl delivery service. From the feedback data over 70% of Shutl users are either more likely or way more likely to retailer again.
This was a great slide in the presentation. Shutl showing measurable return on investment.
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I personally used the service in December when I ordered a Christmas present from Argos. After purchase I was able to request immediate delivery via Shutl and due to my order size it was completely free. I was called to say that due to demand there were a few delays and was given a revised delivery time, but from memory I believe it was still delivered in less than three hours. I was impressed!
Of course there are limitations to the service; proximity is critical so coverage is going to be limited. And for smaller, cheaper items like CDs you’re probably still more likely to hunt out the free delivery option as the Shutl option would be more like a Special Delivery cost. But excluding these considerations it really does start to alleviate a major frustration in the e-commerce buying process that I hope will make others stand up and take notice.
Other examples of this type of customer service are limited, but they do exist. Florist brokers such as Interflora offer same day delivery on flowers by aggregating smaller, often independent florists across the UK. Some companies in London have also been able to provide same day delivery, albeit at an exorbitant cost.
Amazon UK provides a same day evening delivery service at £14.99 for certain large cities. However, I feel like this is only paying lip service to the idea. Amazon has been more focused on its delivery loyalty scheme Amazon Prime that for £49.99 allows free and unlimited one day delivery for a year. An interesting concept and I’ve heard that Amazon Prime has been very successful.
So successful that in the US there has also been reports that Google may start to delve into the delivery game. This I’d expect would be something similar to Amazon Prime, but a delivery aggregator service like Shutl would complement the Google Product Service very nicely.
I’ll conclude this blog post with some questions.
- Are there any other companies like this in the UK or aboard that you’ve found?
- Have you used Shutl? What was your experience?
- Do you think that e-commerce delivery is quite as important as Shutl believe?
- Do you think any big e-commerce players may start to look at similar services?