Report: Grocers grade low with own delivery services
While the number of grocers building out their e-commerce 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), non-availability 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 a retailer if unsatisfied with delivery, and those that would continue spending would reduce the amount of purchases they would make at that company by 45 percent, according to Store Brands’ sister publication Progressive Grocer.
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 say 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