Delivering what the customer
wants
Chris Haighton
Head of Retail Logistics
Shop Direct Group
ABOUT SHOP DIRECT GROUP
Shop Direct Group is the UK’s leading
multi-brand online retailer, offering
customers a fantastic ...
FAST FACTS…
£1.7bn
Sales
79%
Online
Participation
32%
Sales via
mobile devices
50m
Products Sold
Each Year
25m
Parcels
11m...
What does the customer want?
Free delivery is of prime
importance
-For all orders?
-At MOV?
-Free returns?
Premium service...
Case study 1 – Free delivery
• Based on this feedback we needed a free delivery
option on our direct brands
• Losing £3.95...
Case study 1 – Free delivery
• Impact:
• Collect+ grew from 8% to 25% of direct brand
orders in 12 months.
• Significant N...
Discussion Point
• Customers want free delivery, and they are
prepared to pay for it.
• What is the best way to cover the ...
The current SDG propostion
Littlewoods, Kay & Co
(Embedded)
•Free 48hr delivery (Mon-Fri)
•Free Click & Collect
•£4.95 Pre...
Case study 2 – Saturday delivery
• Collaboration with main carrier – Yodel
– SDG give Yodel the volume to create a 6 day
o...
Saturday - Impact on premium take up
(Embedded brands)
Before
• Order Thurs – Del Mon
– Friday premium
– Highest “next day...
Saturday - Unintended
consequences
• NPS scores on delivery dropped!
– “Cost of delivery” score fell on embedded brands
• ...
Market offerings (online)
• ‘Standard’ 3-5 day delivery
• 48hr delivery
• Next day
• Nominated day
• AM
• Timed (PM, Avoid...
Discussion Points
• What is the right standard offer?
– Free
– Home and click & collect?
– MOV?
• How much choice of premi...
Chris Haighton, Head of Retail Logistics at Shop Direct - Delivering what the customer wants
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Chris Haighton, Head of Retail Logistics at Shop Direct - Delivering what the customer wants

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Chris Haighton, Head of Retail Logistics at Shop Direct spoke at the SCL Event July 2013

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  • Kays founded 1794 – sold watches and jewellery by mail order in 19 th century Great Universal - first mail order catalogue 1900 Littlewoods - stores and mail order founded 1923 Successfully diversified into Littlewoods Pools & Experian (Credit Reference Agency) – both now outside of group Evolved from being a catalogue retailer to an online one – no high st presence
  • Credit enabled C2DE demographic – this room may not be our customer base
  • One thing our history gives us is a unique insight into online retail – we have been “mail order” distance selling for a long time and so have avoided many of the pitfalls of newer entrants to the market
  • On right is top 7 responses when customers were given free choice of a matrix of 48 statements about their preference for deliveries Ignore number 7 as only at 130 vs 100 average 4 of the top 6 were the statements which mentioned “Free”, the other 3 were about accuracy of delivery (yes, that makes 7 because the 2 nd statement mentions both). N.S.S. Response from embedded customers really not clear, wide range of options suggested Response from direct customers very clear requirement was “free delivery” and most customers would be happy to trade a slower delivery to get this Market awareness – those brands who charge P&P are increasingly pulsing a free offer or reducing MOVs for free Boden 2012 started 80% paid, ended 40% paid. Customer awareness – customers do not entirely trust internet shopping – the ability to return an item and receive a full refund reassures customers and drives the purchasing decision. P&P is seen as ‘sunk’ money that is potentially ‘lost’ if the product is not as described. Especially true of new customers (until brand relationship has been built). “I won’t shop anywhere that charges P&P” Conclusion Market is heading to free delivery Customers want free and they are prepared to pay more to get it
  • Significant IT barriers to moving to “slow 3-5 day delivery” There is no such thing as “Free Delivery”
  • MOV is effectively partially in the price of goods.
  • How did we get here? Combination of following the customer and responding to the limitations of our systems Opportunity over next 18 months with MDS to remove some of the anomalies and line this up so it more transparently reflects our costs.
  • Chris Haighton, Head of Retail Logistics at Shop Direct - Delivering what the customer wants

    1. 1. Delivering what the customer wants Chris Haighton Head of Retail Logistics Shop Direct Group
    2. 2. ABOUT SHOP DIRECT GROUP Shop Direct Group is the UK’s leading multi-brand online retailer, offering customers a fantastic range of products, including fashion, beauty, furniture, homewares, electricals and gifts. We are home to loved household name brands Very.co.uk, Littlewoods, isme, Woolworths.co.uk and K&Co.
    3. 3. FAST FACTS… £1.7bn Sales 79% Online Participation 32% Sales via mobile devices 50m Products Sold Each Year 25m Parcels 11m Returns
    4. 4. What does the customer want? Free delivery is of prime importance -For all orders? -At MOV? -Free returns? Premium services? -Very fragmented response Every customer has their own preference for premium What matters most to our customers Top 7 (Indices where 100 = Average) Deliveries arriving on the date provided Being offered a specific day delivery free of charge Being offered the choice of a free delivery option Standard 2 day delivery - Free Accuracy of delivery information provided in order confirmation Being offered a range of delivery options - both "free" and "paid for" options Being notified 2 days in advance about any changes to delivery dates 218 181 130 230 218 207 199
    5. 5. Case study 1 – Free delivery • Based on this feedback we needed a free delivery option on our direct brands • Losing £3.95 P&P revenue per order is a lot to recover • Can not be done through carrier savings alone • Can only be justified through increased sales • Temporary solution - offer Collect+ free – Some cost savings – Aligned with the High Street – Self limiting?
    6. 6. Case study 1 – Free delivery • Impact: • Collect+ grew from 8% to 25% of direct brand orders in 12 months. • Significant NPS improvements • From some customers • But… • “we still want free home delivery”
    7. 7. Discussion Point • Customers want free delivery, and they are prepared to pay for it. • What is the best way to cover the cost of delivery? – Transparent P&P – In the price of goods – MOV
    8. 8. The current SDG propostion Littlewoods, Kay & Co (Embedded) •Free 48hr delivery (Mon-Fri) •Free Click & Collect •£4.95 Premium services • Next day • Nominated day • Saturday • AM •Free Returns Very, Isme, Woolworths (Direct) •Free Click & Collect •£3.95 P&P • 24hr Home delivery • Mon-Sat •+ £1 Premium services • Nominated day • AM •£6.95 P&P for 2-man items •Free Returns
    9. 9. Case study 2 – Saturday delivery • Collaboration with main carrier – Yodel – SDG give Yodel the volume to create a 6 day operation – Yodel removes the ‘Monday spike’ – 5 day delivery vs. 7 day retail – SDG gets an enhanced delivery proposition • SDG Offer: – Direct: Next day (Mon-Sat) – Embedded: 48hr (Mon-Fri) – Saturday becomes available as premium – Priced as next/nominated day.
    10. 10. Saturday - Impact on premium take up (Embedded brands) Before • Order Thurs – Del Mon – Friday premium – Highest “next day” take up • Order Fri – Del Tues – Monday for premium – Lowest “next day” take up After • Order Thurs – Del Mon – Friday premium – “nominated day” take up increases during week • Order Fri – Del Tues – Saturday for premium – “next day” take up increases dramatically – £1M net benefit p.a.
    11. 11. Saturday - Unintended consequences • NPS scores on delivery dropped! – “Cost of delivery” score fell on embedded brands • but embedded get free delivery? – Embedded customers had been able to promote Friday orders from Tuesday delivery to Monday • Now able to promote from Tuesday to Saturday – More compelling offer, more customers took up • But they resented paying this optional cost!
    12. 12. Market offerings (online) • ‘Standard’ 3-5 day delivery • 48hr delivery • Next day • Nominated day • AM • Timed (PM, Avoid the School Run, Evening) • 1 hr timeslots (e.g. Citysprint MyTime) • Enhanced comms (e.g. DPD) • Click and Collect – Stores (Collect+, Hermes Parcelshop, RM Local Collect) – Lockers (Amazon, ByBox, InPost) • Same Day • Will be driven to some extent by product/geography
    13. 13. Discussion Points • What is the right standard offer? – Free – Home and click & collect? – MOV? • How much choice of premium is the right amount? – How many Click and Collect offers? – And how to offer this elegantly • What other unintended consequences have you experienced?

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