3 minute read
HOME DELIVERY
COVER STORY: LUMINA INTELLIGENCE
HOW WELL ARE RETAILERS DELIVERING?
LAST YEAR’S ACS SHOP REPORT FOUND THAT TWO THIRDS OF INDEPENDENT RETAILERS OFFER SOMESORT OF HOME DELIVERY SERVICE, YET A NEW REPORT FROM LUMINA INTELLIGENCE SUGGESTS THATONLY 8% OF STORES OFFER ONE.
Home delivery has been arguably the biggest game changer to come out of the coronavirus outbreak so it came as little surprise to discover in last year’s annual ACS Shop Report, almost 70% of stores offer a home delivery service of some kind. Intuitively, that felt a little high – but believable. A new report from Lumina Intelligence, however, suggests that only 8% of stores actually offer home delivery. That’s a major discrepancy.
It’s probably down to how you define home delivery, as so many stores dropped products off to vulnerable shoppers during lockdown that the service become pretty much ubiquitous.
Lumina’s UK Wholesale Market Report 2020/21 found that while only 8% of UK convenience stores currently offer home delivery, for those that do, it is a significant revenue stream equating to 7% of total sales on average.
Online grocery delivery has grown phenomenally throughout the pandemic, with demand for delivery from supermarkets outstripping supply during spring 2020, creating an opportunity for convenience stores to offer ‘on demand convenience’ services. Whilst some retailers have set up their own delivery services, many have turned to third party providers, with Snappy Shopper coming through as the most popular, ahead of Deliveroo, Uber Eats and Appy Shop.
Commenting on the findings, Alice Dolling, Senior Insight Manager at Lumina Intelligence says: “2020 saw an acceleration in online shopping that we could never have predicted. Nearly onein-five shoppers changed their primary method of grocery shopping to online, highlighting the opportunity available. As demand increases, convenience stores have a great opportunity to drive greater basket spend and expand the potential catchment area of their store by offering delivery.”
HALF OF RETAILERS EMBRACING NEW TECHNOLOGIES
The report also highlights that nearly half (48%) of convenience store retailers have used new technologies when shopping online with a wholesaler or in depot since the pandemic began. The most popular tech solutions used were barcode scanners (41%), supplier apps (13%) and supplier loyalty schemes (8%).
Dolling adds: “The pandemic has placed significant strain on retailers, who have faced incredibly high demand and footfall over the last year. As a result, efficiency has been key to ensure they remain in their stores as much as possible. Barcode scanners and apps are great ways of streamlining the shopping process for retailers. Furthermore, this behaviour is now second nature and will likely continue once restrictions ease.”
PANDEMIC HAS LITTLE IMPACT ON WHOLESALE ROUTE TO MARKET
The report identifies the channels retailers use to purchase stock, which has not changed significantly overall despite the pandemic. Whilst there has been a long term move in favour of online/ delivered route to market, delivery slots have been limited and many retailers have opted to go to the depot to ensure availability for their customers, therefore maintaining the importance of the depot in retailers’ purchasing behaviour.
On average, just over half of a retailer’s stock is purchased from a wholesale depot and just over a quarter from wholesale websites. The remaining proportion of stock is sourced from a combination of wholesaler apps, supermarkets, online retailers and sales reps/vans.
The top three reasons for retailers not using online wholesale regularly are: Don’t feel comfortable going/ navigating online, Minimum order requirements, No convenient delivery options
Dolling comments: “Digital investment is key for wholesalers, but they must understand the needs of retailers to maximise its potential. Site taxonomy and ease of navigation are key to a positive user experience. Meanwhile, with more retailers conducting distress top-up missions through the delivered channel, this could indicate an opportunity for a premium subscription for faster delivery or loyalty schemes offering a lower minimum order requirement.”
Find out more about the Lumina Intelligence UK Wholesale Market Report 2020/21.
