The State of Home Delivery: Plenty of Room for Improvement

The State of Home Delivery: Plenty of Room for Improvement

Ecommerce has been on a roll for the last two years. This level of consumer activity has translated into record volumes of home deliveries. But, let’s face it: since the pandemic started, home delivery performance has not been great.

Earlier in 2022, we conducted a survey of 8,000 consumers across North America and Europe to get a better sense of their ecommerce experience and how they were reacting to retailer performance. The results of the research are a good news, bad news story. On one hand, consumers expect to increase their online purchases post-pandemic. On the other hand, consumers are regularly experiencing delivery failures and ready to punish poor performing retailers and delivery services companies. Retailers and delivery services companies that can break through today’s cycle of mediocre home delivery performance stand an excellent chance of improving customer loyalty and growing market share. Here are three charts that paint the whole picture.

Consumers are planning to buy more, but only a fraction cite improved home delivery performance.

In the study on home delivery consumer sentiment, consumers stated that, during the pandemic, the portion of all purchases made online that required home delivery went from 35% to 46%. They also mentioned that post-pandemic this would increase by 2%; however, the top reason for increasing online purchases was “convenience” (54%). Improved delivery processes was the fifth choice (34%). Given that the question allowed every respondent to select all the choices that applied, 66% of consumers indicated that they did not see any improvement (see Figure 1). Regular delivery driver reliably (20%) was even lower as it was only mentioned by 1 in 5 consumer respondents.

Figure 1: Top Reasons for Increased Online Purchase and Home Delivery

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Source: Descartes & SAPIO Research

The frequency of home delivery failure is alarming.

As consumers, most of us have had delivery challenges, but we wanted to get a better appreciation for how often consumer experienced a delivery failure. Over the 2021 holiday period, almost three-fourths (73%) of respondents had a home delivery issue (see Figure 2). Delivery reliability was noted in the top two responses: arrived much later than expected (26%) and came at a different time than was expected (22%). In fact, a wide range of delivery performance-related issues were cited, with some of them starting during the buying process and going beyond the delivery. The breadth of the failures indicate that poor delivery performance can result from a lack of consideration given to its role in the entire purchase- to post-delivery- process that defines the customer experience.

Figure 2: Consumer Delivery Experience for the Last 3 Months of 2021

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Source: Descartes & SAPIO Research

Consumers are looking elsewhere based upon delivery performance.

There is a saying in home delivery that “the last mile is the last word”. Consumers are fatigued and frustrated with today’s home delivery performance and a large number are making future buying decisions based upon it (see Figure 3). Almost one-quarter (23%) of respondents said that, based upon their recent delivery issues, they did not order from the retailer again. Consumers are making retailer choices based on the delivery experience/company. This appears to more of a European issue, but it’s also a clear warning for North American delivery services companies. The most potentially damaging response was told friends/family to avoid the retailer (17%). If we consider this from a social media perspective, the ability to negatively influence hundreds of potential buyers with one failed delivery is absolutely possible.

Figure 3: Consumer action associated with home delivery failures

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Source: Descartes & SAPIO Research

With high delivery demand, chronic driver shortages, ongoing COVID-related disruptions and escalating costs, consistent, high quality home delivery service is a challenge; however, ignoring current market woes could result in grave consequences at the consumer level. The three charts from the research report on home delivery consumer sentiment underscore why delivery service is so important and point to the opportunity that exists for those retailers and delivery services companies that achieve home delivery performance excellence. In addition, home delivery performance is dictated by many factors that go beyond the actual delivery. Establishing an integrated purchase- to post-delivery process is critical to ensuring the customer experience enhances the brand, not detracts from it. What’s your home delivery excellence strategy? Let me know.

As Executive Vice President, Marketing and Services, Chris Jones (CJones@descartes.com) is primarily responsible for Descartes marketing activities and implementation of Descartes’ solutions. Chris has over 30 years of experience in the supply chain market, including the last 10 years as a part of the Descartes leadership team. Prior to Descartes, he has held a variety of senior management positions in other organizations including: Senior Vice President at The Aberdeen Group’s Value Chain Research division, Executive Vice President of Marketing and Corporate Development for SynQuest and Vice President and Research Director for Enterprise Resource Planning Solutions at The Gartner Group and Associate Director Operations & Technology for Kraft Foods.

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