According to a McKinsey report, 24 hour delivery services are anticipated to outgrow “instant”, on-demand delivery by ten times. This, the research and consultancy leader claims, could unlock massive opportunities for retailers in the coming years. McKinsey value this at over $200 billion for retailers in Europe and North America over ten years. This could be the shift that helps halt the haemorrhaging of high street shops and businesses from towns and cities across the UK. In 2018 alone, the Guardian estimated a loss of 38,000 jobs in retail and restaurants; this picture omitted associated beauty and health treatment outlets and other centrally located businesses.
Among the high street struggles, however, McKinsey researchers claim that two traditional business types could still have a presence, with the continuing technological developments that can help connect them with customers, without any necessary footfall. Many buyers of household goods and clothing still like to look and touch, doing their research online, but buying in-store, or checking in-store, later to purchase online.
Among bricks-and-mortar retail outlets, ground lost to the ever-growing army of pure e-tailers online may be recoverable to some extent if they learn to exploit new digital channels available to them. E-commerce lacks that essential buyer experience of trying on clothes, or seeing up close how home furnishings and fittings really look and feel. Sometimes online shopping can feel like a gamble that does not always pay off. If you have ever bought footwear and had to send them back disappointed, you will be familiar with that feeling of frustration and disappointment of shopping not being quite so convenient as you had anticipated.
Retailers in particular have their local, national and even international network of stores, which can offer same-day order fulfilment and delivery, harnessing the power of an on demand delivery system, easily accessible from mobile apps. Supply chain aggregating software offers service users an informed choice about potential delivery providers via a simple to use booking app. Price comparison is no longer a tedious process of trawling websites or picking up the phone. Information is visually represented in a see-at-a-glance map, showing where nearby drivers are located along with clickable links to see profiles and reviews of those delivery drivers, rates and other data. For retailers, this saves on costly delivery staff being maintained in house, or being restricted to contracts with particular courier companies.
McKinsey characterise this new retail model as “the city as a warehouse.” Of course this may be somewhat simplistic, since people want more of a mix in town centres, allowing them to drop off the kids somewhere, while the grown-ups get some shopping and leisure time, or increasingly demand more child friendly business mixes, allowing for families to undertake a mix of activities together, including shopping.
For the transport and logistics sector, existing parcel delivery companies, rather than new start-ups could gain an estimated “80 percent of the future same-day market”, say McKinsey’s research report authors. They explain this as being down to having the capabilities that retailers need. Specifically, “proven expertise in consolidated network operations, synergies with significant base volume”, plus “commercial capabilities and standing big-customer relationships to support such deals.” In other words, their truck capacity, trained drivers, network of prestigious clients and no doubt digital support systems, such as potential pre-existent online courier management system, on demand trucking network and on demand delivery system software. Smaller start-ups have the capacity to tap into those networks available to market players as independents who can provide extra capacity at key times, such as the Christmas rush, or other busy sales periods.
High-street retailers, working with the movers and shakers of courier deliveries could help both benefit from partnership in the same-day delivery growth service. There is some way to go in such closer partnerships, however, it seems. Availability of on demand delivery system technologies are still under-utilised. There is no doubt that consumers want digitally enabled same-day experiences, particularly among the younger, digitally savvy customer base. Digital upgrading is the challenge retailers face to enhance their offering. With complementary apps on the market, the combination of in-store enjoyment and convenient home shopping could be an opportunity the struggling bricks and mortar retailer needs right now, before high-street closures reach their tipping point of becoming unattractive venues to consumers, i.e. a point of no return.
Retailers can now integrate in-store operations with burgeoning urban delivery networks, before e-commerce competitors continue to enjoy the benefits of their instant fulfilment and delivery edge. This is, McKinsey say, a “dynamically growing value pool” for the shrinking high street retail sector. The only barrier in the way of survival is perhaps belief in technological investment for a digital future that acts as a complement to the real customer experience, in-store. Welcome to multi-channel marketing that includes easy to use, on-demand delivery systems to add value and remain viable.