The Ecommerce share of the retail market continues to grow at pace, making up 17% of the total in the UK and 9% of all sales in the US in 2017 – numbers that will continue their upward trajectory for some time to come.
Though the industry has matured rapidly online, one surprising area of neglect has been the delivery process. This seems an oversight, given that this is the point at which a brand-consumer relationship moves from the digital to the physical. Lasting impressions can be made – both positive and negative – at these moments.
With Amazon launching its own delivery service within the next year, this is finally an area that is receiving significant focus. The Ecommerce giant is labelling this the ‘last mile revolution’, as it plans to take control of the final stage of the purchase journey. News of this strategy was enough to send share prices in UPS, FedEx, and the Royal Mail, into decline.
Amazon is not the first to notice that this is an interaction that has significant room for improvement, however.
Other companies have already taken steps to use technology to improve the delivery experience, both for retailers and consumers.
A cursory glance at the projected Ecommerce growth statistics in the chart below will be enough to demonstrate how big the prize is for those who can offer upgrades to the online shopping experience:
One notable development in the past decade has been the advent of Click and Collect fulfilment services, which allow consumers to buy online and pick up their parcel from a convenient store near to their home or office.
Amazon has entered this market too, with an increasing number of Amazon Lockers popping up across the US and Europe.
Click and Collect is typically free, it removes the potential for missed deliveries, and it often opens up the potential for same-day delivery.
All of these benefits chime with the preferences of the modern consumer, but the industry has much room to grow – both in terms of adoption and sophistication. While over 50% of UK consumers say they have used this option within the last 12 months, only 27% of US consumers have recently opted for Click and Collect. The market is projected to grow by 78% by 2020, however, so it provides a significant opportunity for retailers.
We caught up with Sam Jarvis, CEO of HubBox, to discuss the challenges and opportunities in the Ecommerce delivery industry, and how his company is developing technology to improve the delivery process for retailers and consumers.
Could you tell us a bit about HubBox and why you started the company?
Whilst HubBox originally started as a consumer brand, essentially it exists because we believe that there are much better ways of fulfilling deliveries for both customers and retailers than the options that are currently available.
HubBox exists in part because the logistics and delivery industry has failed to innovate in a meaningful way since the rise of Ecommerce, leaving significant gaps in the delivery experience for customers. In the UK, Ecommerce was responsible for over 17% of all retail sales in 2017, and this number will reach 20% or higher this year. We anticipate that this will go as high as 50% by 2025 – if not earlier.
This growth places significant strain on existing delivery infrastructure, which in turn creates frustrations for both customers and retailers.
The former have an initially positive and seamless experience online, but are then let down when it comes to their delivery experience.
The latter, meanwhile, find it costly and difficult to implement a solution that craves a lot of resource allocation but would have a significant benefit both to their conversion rate and customer loyalty.
What makes HubBox different?
From a market perspective, HubBox is different because it focuses solely on Click and Collect rather than it being an ‘add-on’ service to its core offering, the way it is for many couriers. Most of the players fulfilling Click and Collect at the moment are couriers rather than technology providers. The problem with such suppliers is that, if you want their Click & Collect, you have to change to their courier. This makes the implementation process disruptive, cumbersome and expensive.
HubBox focuses on developing the best possible Click and Collect technology. Apart from simply having developed an API (an achievement to which most modern businesses lay claim), we provide front-end software that is compatible across multiple Ecommerce platforms. This allows retailers to display this delivery option to customers in a way that drives uptake and a better delivery experience. We’re constantly iterating and the product is compatible with any Ecommerce platform or any checkout variation.
All of these factors mean the HubBox integrations can be measured in hours and days, not weeks.
The way that HubBox integrates also gives the retailer control over which Collect Point Networks their customers are offered. The retailer’s own stores (if they have them) can feature in the network, and the retailer can also set profiles to define which HubBox Collect Points display. For example, retailers can turn off all Collect Points that are within a certain radius in order to drive footfall into store.
What problems does HubBox help to solve for customers?
For retailers, it’s quite simple – HubBox provides a secure local Collect Point where they can send their orders.
For consumers, ordering Click and Collect is not just about providing an alternative delivery address when they know they won’t be home. Going through the hassle of tracking down a failed delivery or waiting for a re-attempted delivery means that customers want control and knowledge they can access their parcel as much as they want speed.
This is becoming increasingly important, as more and more workplaces are instituting a parcel ban on personal orders.
The other clear differentiator is that HubBox users are not reliant on a shop or ecommerce site offering Click and Collect in order to use the service – through the use of a personal HubBox account with attendant ID they can use HubBox at the checkout of any online retailer for a small parcel fee.
What problems does it solve for brands?
For brands, HubBox does two things.
It enables them to offer the delivery choice that customers have come to expect when they reach a checkout page. This might not sound like an enormous deal, but it’s hard to overstate the effect that Amazon and large Ecommerce have had on consumer expectations. Standard delivery of 3-6 working days can seem interminable, and a failed or bad delivery experience is enough for a consumer to decide not to shop with a brand again.
It also allows them to do this without a lengthy and costly integration process. As sales cycles get shorter and the environment more pressured, retailers don’t have time to wait 3 months to implement something and see the value that it might add to their business.
How does the technology work?
HubBox’s core technology is driven by an API which interfaces with different software plug-ins compatible across all e-commerce platforms, including Salesforce Commerce Cloud (Demandware), Magento, SAP Hybris and Shopify to name a few.
It allows retailers to display a Click and Collect option on their checkout page with minimum disruption to the rest of the site, giving their customers instant access to a network of more than 3,000 Collect Points across the UK. HubBox’s back-end technology tracks parcels flowing through the network and filters into multiple Collect Point and customer-facing apps. The technology is compatible with any Ecommerce platform and checkout variation, but the most important difference is that we provide an end-to-end solution, not just an API.
How do you envisage the future of retail?
It might seem like a trite comment to make, but the future of retail will be inexorably shaped by the continued rise of ecommerce. At the current rate of growth, with ecommerce sales increasing by 27 percent over the last two years, we can see that the way in which people have shopped has changed fundamentally.
The businesses that are ‘winning’ at this game are the ones that understand that this shift only works if the way in which their goods get from A to B is as seamless as the initial digital shopping experience. More than ever, time is a precious commodity; people don’t want to waste time waiting for a delivery, the same way they don’t want to trawl the high street for things that they know could be theirs with the click of a button.
In this new environment, I believe there are three key areas that online retailers need to focus on in order to succeed:
- Be the first to be found. They need to be top when people are searching for the product they want.
- Offer customers an engaging, simple and brilliant user experience when they visit your website.
- Provide as many delivery options as possible. Convenience means different things to different people, so you need to understand your audience and provide all the choices they expect.
Whilst getting all of these right certainly isn’t easy, those that lead in these three areas will win market share.