While the number of grocers building out their ecommerce infrastructure grows every year, most customers prefer to use alternative delivery services such as Google Express, Instacart or Ocado, according to a new report from Paris-based multinational consulting corporation Capgemini.
Titled "The Last-Mile Delivery Challenge," the report says that 65 percent of customers surveyed globally find performance of traditional retailers' delivery services subpar when compared with alternative grocery delivery services, which they're using instead. Consumers are dissatisfied with the current state of last-mile delivery, citing high prices (59 percent), nonavailability of same-day delivery (47 percent) and late deliveries (45 percent) as the top reasons for their disappointment. Nearly half (48 percent) of dissatisfied customers would stop purchasing from an offending retailer if unsatisfied with delivery, and those who would continue spending would reduce that amount by 45 percent.
Conversely, fast and effective last-mile delivery grows customer spend and loyalty. Some 74 percent of satisfied customers plan to spend as much as 12 percent more with retailers from which they often buy, and the majority (82 percent) of customers have shared positive experiences with friends and family, with just more than half (53 percent) even willing to purchase a paid membership for a good delivery service. But while 55 percent of customers day that offering two-hour delivery would grow loyalty, only 19 percent of firms currently provide this service – compared with 59 percent that offer a delivery time frame of more than three days.
The report also finds that:
- Some 40 percent of customers currently order groceries online at least once a week, with the number expected to reach 55 percent by 2021
- Some 40 percent of customers class delivery services as a "must have" when purchasing food and grocery products, with 20 percent prepared to switch retailers if this isn't provided
- Evolving consumer behavior is also fueling greater immediacy in purchasing, as 59 percent of customers purchase products online when they need them, rather than wait until the weekend to buy in-store
- Organizations are currently charging customers only 80 percent of the overall delivery cost, and deliveries are now the most expensive part of the supply chain