By Caroline Varga, Head of Uber Direct UK & Ireland
The continued consumer shift towards online ordering has become a source of concern for those worried about the demise of in-store shopping. But, while we’re still seeing articles bemoaning the ‘death of the high street’, in reality this is an exaggerated claim.
The bricks and mortar shopping experience provides consumers and retailers with plenty of benefits. And with consumers demanding faster, more convenient delivery options when ordering online, a high street presence can also be a crucial facilitator – enabling retailers to be more flexible and react faster to orders.
With consumers living increasingly busy lifestyles, they are no longer prepared to spend half a day waiting around to receive an order. People want their parcels to come straight away, or at least on the same day, or at a chosen time that suits them best.
This was evident in recent research which showed most consumers would be more likely to buy from a retailer that offered 60-minute delivery slots. Over four in ten also said they would be more likely to buy from a retailer that offered on-demand delivery.
Proximity is key
But if retailers rely on national distribution centres alone for delivery – loading hundreds of parcels at a time onto vans – it’s going to be difficult to satisfy this increased desire for on-demand, same-day or more accurately scheduled delivery.
To offer these rapid, more precise delivery services, they will generally need to partner with courier networks – that are already providing these services to supermarkets, restaurants and various forms of retail – and utilise their stores as part of their ecommerce fulfilment network.
Large retail chains that are investing in omnichannel systems are likely to steal a significant competitive advantage here. Their online customers will be able to purchase products held in local stores, even when they’re not available in the distribution centre.
Local community stores that have an online presence could also be big winners – as the research shows there is major interest in on-demand delivery services from pharmacies, florists, jewellers, clothes stores, pet shops and more.
What happens next?
This facilitation of faster, more convenient delivery is an emerging trend, and it will take time to fully manifest – particularly if new technology solutions need to be deployed. Retailers may also need to find the best way to turn their stores into mini distribution (and reverse logistics) hubs – without disrupting the in-store customer experience.
But, as we’ve already seen, the big supermarkets have successfully established this distribution model. And there is a growing expectation that all retailers will need to offer the same level of service.
It’s also worth noting that the trend is being driven most fervently by younger shoppers. Almost all Gen Z (96%) and Millennial (94%) consumers say it is important that retailers offer same-day delivery, with around two thirds saying they are also willing to pay extra for this.
Given that younger generations are making most of their purchases online, these demand signals cannot be ignored. The sooner retailers meet these expectations, the better placed they will be to remain competitive.
It’s highly likely that, as consumer demand increases, we will start to see pure play online retailers evolve their offering and develop distribution networks supplemented by smaller hubs capable of satisfying rapid last-mile delivery.
There’s little doubt, however, that retailers that already have a high street presence will be able to draw extra value from their real estate. That proximity to the end customer puts them in the best position to take advantage of this emerging trend and provide their customers with greater delivery speed and convenience.
