London Living - Delivering Convenience
#LONDONLIVING2019
Our world is becoming increasingly fast paced and with it impatient. Gone are the days of waiting a few days for a response to a [posted] letter (can you imagine?!) and no longer do you have to wait a week for your holiday snaps to be developed only to find 8 of the 24 photos were out of focus and the last one is of a family you have never met.
Modern advances are a wonderful thing, but in some cases the infrastructure to support change is still catching up. One such example is online orders and the subsequent delivery there of. In this week’s LondonLiving, Jessica Mueller, an analyst at DTZ Investors looks at the brands and business models which are attempting to get ahead in last mile delivery across the capital.
Next day delivery and free returns are becoming the norm, with 39% of the UK having access to an Amazon Prime account. Traditional retail is struggling, at the same time, there has been growth in online sales and delivery which has had a great effect on warehouses and industrial units. Most customers, given the choice, will opt for the cheapest delivery option and only a small group are happy to pay for convenience or same day delivery (this differs depending on the product in question). The delivery market in the UK is hard to conquer because of this, delivering goods is expensive with low margins. Shutl carried out a survey which found that 91% of people value delivery options that provide a narrow timeslot.
There are many new innovate ideas to challenge this market such as: drone deliveries, sheds and beds (industrial and residential mix), lockers, and local pick up points. The difficulty is making these ideas profitable and independent companies are trying to rebel against the unhelpful and often impractical 9-5 delivery slots. Doddle Ltd have tried and tested having delivery people with an oyster card around London which came across a few health and safety issues, and also renting traditional retails stores where unfortunately revenue could not cover the high rents. However now they have found pop up stores in central locations such as Liverpool Street, where they use push notifications to tell you your parcel has arrived and an instore barcode scanning for quick service. Shutl Delivery is also trying to overcome the “Sorry I missed you” cards, by giving the customer complete control over their delivery. They offer the opportunity to send or receive packages locally within 90 minutes or to choose a convenient one hour delivery slot. Shutl is currently boasting a fastest delivery time of 14 minutes. More traditionally, Collect+ are piggy backing off local shops which are open long hours so that customers can collect their packages once they are home. These delivery companies are proving that there still needs to be a physical point of contact to make the service flexible and convenient for their consumers.
Retailers are starting to understand this and redesigning their stores to make it convenient and flexible for customers to pick up their online deliveries from their shop. Although this service alone would not cover most high street rents, it complements in-store shopping and can also lead to impromptu purchases and lastly it allows the consumer to interact with the brand. These retailers therefore need to be closer to their warehouses or need larger storage areas in their retail stores. The lines are slowly blurring for traditional property sectors. Historically warehouses and industrial units are situated on the outskirts of towns, planning regulation have always been there to set this precedent. However, as consumers become more demanding are more industrial units going to creep into town centres to support the delivery of goods, and how would you feel if they did?
LondonLiving is a weekly thought piece looking at different aspects of life in the capital; from the logistics of deliveries, the plight of loneliness, through to how generation rent is shaping its future.