Already convinced that internet prices are the lowest, consumers are increasingly interested in the web as a source of greater convenience. Delivery locations and times have long been a barrier for consumers looking to purchase items online and many consumers revert back to store-based purchases if workplace/home deliveries are not viable options. Impulse items, in particular, underperform within the internet retailing channel due to the fact that long delivery times somewhat contradict the initial motivation of the purchase. This has prevented internet retailers from making much progress in higher margin impulse products such as toiletries.
Things, however, are starting to change as internet retailers explore a variety of options to get products off virtual shelves and into physical hands quicker. For many store-based retailers, this poses a very real challenge and could give internet retailers yet another advantage in the evolving battle for multi-channel supremacy.
In-Store Shopping Motivations
Source: Euromonitor International
Note: Data taken from Euromonitor International’s ‘Out and About Survey’.
From buy now to collect now
With internet retailing now accounting for 4% of global retail sales, the channel has become a familiar shopping venue for many consumers. However, whilst internet retailers have widened virtual aisles and lowered prices, they have struggled to recreate the feeling of instant gratification that consumers get from store-based shopping.
The solution appears to be quicker delivery options. Not satisfied with express next day delivery options, consumers have indicated a willingness to pay more for even quicker delivery times. This has resulted in a string of third party logistics companies such as Shutl, offering retailer to consumer delivery in less than one hour. Whilst not a complete substitute for the sense of gratification felt in-store, these services go a long way to replacing the need for store-based purchases.
Locker wars: Location, location, location
The home or workplace has long been the default delivery options for internet retailers. However, consumers are now faced with a progressively diverse set of possibilities. Amazon, for example, has started to build its own network of delivery lockers in high footfall areas such as convenience stores and shopping centres. Google has also piqued a lot of interest from the retail community by buying a delivery locker start-up company. Of course, enlarging the range of delivery spots has long been of interest to homeshopping companies. German homeshopping specialist, Otto, has a significant retail network of third party stores which hold deliveries for consumers all over Germany.
One of the most interesting new concepts in this field is the deliver-to-car option pioneered by Belgian company, Cardrops. Rather than deliver to a fixed physical location, Cardrops delivers to a consumer’s car, allowing delivery at any time regardless of where the consumer is. Whilst it is in its early stages, this could potentially be the next big thing in internet retailing.
By giving consumers more convenient delivery options as well as the feeling of instant gratification, speedtailing encourages consumers to shop for a wider range of items online. This can only be good news for internet retailers and delivery companies eager to continue taking market share from store-based retailers.