A recently published report by Newtrade Perspective noble ‘Home Delivery: What’s Driving Growth?’ examined how the industry has fared over the past 18 months, whether delivery is booming as it did during the 2020 and 2021 national shutdowns, and what retailers’ expectations are for future delivery.
The Covid-19 pandemic has affected businesses and industries everywhere, and independent retail was no different.
Among many other things, the lockdown restrictions meant that many retailers had to limit the number of customers they had in store and faced potential delays and supply chain congestion.
However, the restrictions also provided an opportunity to launch or expand home delivery options and take advantage of the boom in online shopping.
Since the final lockdown ended in July 2021, there is a question mark over the future of home delivery in independent retail. Is it still a useful tool for retailers or has it served its purpose?
What is holding retailers back and what help do they need from delivery companies and other partners to make home delivery work for them?
Newtrade Insight published a report in October 2022 exploring these questions. It included the opinion of 150 businesses and interviews with experts, who were asked their opinion on home delivery and its immediate future in the sector, what businesses are doing to make it work and how much help they need.
Home delivery has plateaued, but still offers room for growth
In June 2020, during the first UK-wide lockdown, one in five households bought groceries online. As of October 2022, the majority of retailers (more than 70%) say their home delivery revenue has decreased or stayed the same. On the other hand, a quarter of retailers say it has increased.
According to Chris Noice, director of communications for the Association of Convenience Stores (ACS), the pandemic boom for home delivery was due to a lack of stock and delivery capacity at major supermarkets.
In Noice’s view, this meant that independent convenience stores could fill a gap and reach customers who were isolating. He suggests there’s less of a need for home delivery than during the lockdowns, and that it’s unlikely to be as popular as it once was.
On the bright side, those retailers that have seen home delivery revenue increase did so by almost 30%, which means there is still considerable potential.
There is no favorite app among convenience retailers
When asked what apps they use, the most popular option, chosen by almost a fifth of retailers, was no app. This can be explained, according to Noice, because retailers choose to manage the service themselves, either over the phone or through a website.
This is also affected by the fact that in most cases during the pandemic, home delivery was used more as a community service to help vulnerable customers who were unable to physically reach the stores.
This can work for retailers who don’t see home delivery as a big part of the business, but for those who want to increase their offering, they should consider partnering with an app provider, says Dael Links, director of marketing for Snappy Shopper.
Citing data from Snappy Shopper’s platform, Links claims that it is possible to increase overall store turnover by up to 50% by using a delivery app.
Advertising, technology and people top the list of areas of investment for retailers
In addition to the issue of delivery apps, retailers are also divided on what element of home delivery they have invested in.
The most popular single investment, with 17.3% of the vote, is in advertising, with e-commerce and increasing the number of employees second at 16.6%.
The lack of consistency when it comes to investment stems from retailer caution, according to Links, and Noice believes that home delivery is still confined to a relatively small local catchment area, making it difficult to scale up a service. home delivery or launch. a.
One solution could be, as Links suggests, a so-called ‘hybrid’ approach, in which retailers use existing methods, i.e. taking delivery orders over the phone and using an app to expand into new areas and grow the customer base. .
Advertising is where retailers’ priorities are
Similarly, with the investment that retailers have already made, advertising is the area where they plan to spend money in the next six months.
This is particularly the case for retailers that have yet to invest in their home delivery service, suggesting that this is an area where they need help.
Links insists that retailers should not view advertising as separate from other areas of investment and that they can use delivery vehicles, which only 10% of retailers plan to invest in, as a way to increase their offer and advertising, since they can be identified. and is used for promotion.
Retailers need more help from suppliers
Less than half of retailers (48%) said they are getting enough help from delivery companies. This is compounded when asked if they expect home delivery to decline in the next six months, with over 66% saying delivery companies aren’t doing enough for them.
According to Links, when a new retailer signs up to Snappy Shopper, there is initially a considerable amount of “attention,” but retailers must set realistic and tangible goals to increase revenue, at which point the offer can be increased or changed. according to your needs.