By Dan Ennor, Commercial Director at Global Freight Solutions
A clear and well-prepared delivery strategy can be the stepping stone for retail growth; gaining and retaining customers to help drive revenue. Every facet of delivery, from checkout to doorstep influences the likelihood of that customer purchasing from that retailer again. Poorly executed delivery costs UK retailers up to £1.2 billion in avoidable costs each year, according to IMRG’s latest estimates, which emphasises the importance of choosing the right delivery approach.
So, what aspects of delivery should retailers be investing in as a priority? Where should they be focussing their efforts in order to maximise their return?
Are retailers looking at customer experience incorrectly?
There has been a trend in recent years for retailers to flock towards ‘next day or no cost’ delivery but operational and commercial common sense tells us that there is no such thing as ‘free delivery’ for retailers. The online supply chain has a finite capacity for an ‘everything tomorrow’ approach and retailers need to consider this before jumping to ‘free delivery’ as a first port of call.
There is a real danger of retailers over-promising and under-delivering when the average shopper doesn’t necessarily want a premium delivery option all the time. Every shopper is different, and every delivery may have different requirements depending on what it contains, and why and when it has been ordered. All of this should be taken into account as part of a robust delivery strategy.
Your last-minute shoppers will always want ‘fast and free’ but what most shoppers really want is a clearly communicated delivery offer that follows through on what is promised. Perhaps retailers should instead be looking at offering a broader range of delivery options and the chance to specify when or where the delivery will arrive. Customers wants convenience, so retailers need to offer the widest range of delivery options they can to appease them. This is emphasised by the latest research into consumer delivery from IMRG and Global Freight Solutions, which outlines that in 2018, 41 percent of consumers indicated they had abandoned their cart due to insufficient delivery options.
The Brexit effect
As the deadline for Brexit gets ever closer and remains uncertain, its impact on delivery looms larger.
Up until now, it has provided opportunities for online selling into Europe with a weaker pound making UK retailers a more attractive proposition to EU shoppers. Since the referendum decision at the end of June 2016, we have seen the proportion of UK cross-border volume going to Euro destinations, increase.
However, this may all be about to change. With so much uncertainty surrounding Brexit, there will be a lot to learn about dealing with the EU in the coming months and years, so common sense suggests contingency plans must be made, which should legislate for:
- Longer cross-border delivery lead times
- Reviewing all HS code classification to ensure products attract the correct duties and taxes
- Making changes to customer messaging, in order to manage expectations
- Implementing growth strategies in non-EU markets (eBay, Etsy, Alibaba)
- Enabling transparent delivery and duty cost information at point of checkout
- Implement paperless trading (PLT) services for non-UK destinations to speed customs clearance and reduce transit times
The retail industry is anticipating longer and more complex duty and tax processes, and higher delivery costs with longer delivery lead times into EU markets. Retailers will need to reach out to carrier management experts to navigate this new territory and ensure it doesn’t hamper their business.
Delivering for the right price
The dilemma for retailers is working out how to provide a delivery offering that gives a more specific and sustainable customer experience with better control of costs in both the UK and cross-border environments. That isn’t easy without support.
To make this possible, a multi-carrier approach is required, enabling access to a range of delivery services, using order characteristics and specific customer requirements to offer the right solution from a sensible set of options relevant to the destination country.
So, for ecommerce brands, what are the fundamentals their delivery strategy needs to offer? What is essential in order for their business to be successful?
- Delivery to a designated address
- A standard ‘free’ or at low cost option
- An express option at a small premium
- A timed/specified day option at a higher premium (weekend or evening delivery)
- At least one click & collect option (if available):
- Free in-store collection
- Third-party (pick-up point/locker) at a lower cost than the standard designated address delivery
These solutions are all readily available to retailers, it’s often just a case of pulling them together. But when you are busy running a business, it can be difficult to make the time.
What’s holding retailers back from delivering?
Even if businesses want to offer that ‘Amazon-style’ delivery of both choice and convenience, in order to compete with the likes of Amazon Prime, they are often being hampered by their own internal constraints. For example, the cost and complexity of integrating more delivery options and carriers into their systems may prove a stumbling block. Moreover, the effort in managing multiple carriers at once, particularly for an SME, may be far too big a task. That’s before considering the expertise needed on knowing which services to offer or how to access them.
An affordable delivery strategy
The concept of ‘free delivery’ seems to have deeply engrained itself into the minds of consumers and retailers alike, but many retailers seem so desperate to offer it, they don’t stop to think about whether or not they should first. Provided delivery is well-communicated and well-executed, retailers can remain competitive.
The reality is, not every retailer is going to have the same resources and scope to carry out the delivery approach of the big brands, so it doesn’t make sense to blindly follow them. Retailers need to be devising delivery strategies within the context of their customers, capabilities, and commercial plan. A great delivery offering does not have to break the bank.
Retailers need not be restricted by what they can do in-house either. Enterprise carrier management experts can be of great assistance in these situations when taking it all on alone seems overwhelming or unachievable. These managed service experts can help retailers scale their business cost-effectively through delivery, so that they’re not being wasteful. Convenient delivery options that are supported by clear communication is the way forward for retailers.
GameStop rally builds after puzzling ice-cream cone tweet
By Aaron Saldanha
(Reuters) – GameStop Corp shares surged more than 50% in early deals on Thursday as amateur investors jumped back into the stock weeks after an unprecedented short squeeze triggered a 1,600% rally in the video game retailer.
The latest moves build on Wednesday’s rally in GameStop and other so-called “stonks” – an intentional misspelling of “stocks” – favored by retail traders on social media sites such as Reddit’s WallStreetBets.
The new frenzy puzzled analysts, who had ruled out another short squeeze of the stock which had battered some hedge funds, and fueled more hype after some Twitter users pointed out a cryptic tweet of an ice-cream cone photo from activist investor Ryan Cohen – a major shareholder in GameStop and a board member.
A short squeeze takes place when the price of a heavily-shorted stock rises sharply, forcing short-sellers who had bet against the stock to buy it at those prices to avoid further losses.
GameStop shares were up 54.5% in trading before the bell at $141.70 at 0630 ET. Headphone maker Koss Corp surged 57%, while cannabis company Sundial Growers rose 10%.
Shares of cinema operator AMC Entertainment, another stock caught up in last month’s rally, jumped 17% in pre-market trading on Thursday following an 18.1% rise on Wednesday.
Reddit discussion threads were buzzing again about GameStop on Thursday, with members exhorting others to pile into the stock as the rally gathers steam.
“Bought lots more #GME today, let’s keep fighting !!,” wrote one Reddit user Fundssqueezzer, while another user Responsible_Fun6255 said, “Rise of the planet of the ape: GME edition”.
Earlier on Thursday, GameStop’s Frankfurt-listed shares trebled at one point, overshooting its 100% surge on Wall Street overnight, as European retail traders joined in the fresh buying push.
The sharp moves surprised the market, which thought the excitement behind the recent Reddit-fueled rally had died down.
GameStop shares skyrocketed in January as retail investors, urged on by popular Reddit forum WallStreetBets, bought the stock as a way to punish hedge funds that had taken an outsized short bet against it.
The squeeze “personally humbled” Melvin Capital’s Gabriel Plotkin, whose firm was left needing a $2.75 billion dollar lifeline supplied by hedge fund Citadel LLC’s Kenneth Griffin and Point72 Asset Management’s Steven Cohen.
The risky trading strategies employed by some traders on Reddit have drawn the ire of investing legends such as Charlie Munger, long time business partner of Warren Buffett.
“It’s really stupid to have a culture which encourages as much gambling in stocks by people who have the mindset of racetrack bettors,” said Munger, Berkshire Hathaway’s vice chairman.
GameStop’s U.S.-listed shares soared nearly 104% on Wednesday. The volatility in GME, AMC Entertainment and other stocks led to outages on Reddit and periodic trading halts by the New York Stock Exchange.
Online brokerage Robinhood said in a tweet that the NYSE action would impact all brokerages, but that it had not paused trading on the shares.
“It’s a pretty risky play to try and buy now … what we might (see) at the open of the cash market is some people trying to get in,” said Oriano Lizza, premium sales trader at CMC Markets in Singapore, which does not offer pre- or post-market trade.
The latest surge comes after a couple of weeks that saw the shares move in relatively tighter ranges.
“It’s a marathon, not a sprint. Whatever happens resist the urge to sell. The longer we hold the higher it goes,” said @catchme1fyoucan, an Italy-based user of retail trading platform eToro, in a discussion on GameStop
(Reporting by Aaron Saldanha in Bengaluru, Tom Westbrook in Singapore and Danilo Masoni in Milan; Additional reporting by Sagarika Jaisinghani; Writing by Anirban Sen; Editing by Jason Neely and Bernard Orr)
GSK narrows focus on elderly in trial to treat pneumonia from COVID-19
By Ludwig Burger
FRANKFURT (Reuters) – GlaxoSmithKline will extend a trial testing an experimental rheumatoid arthritis drug on patients suffering from pneumonia related to COVID-19 to focus on the elderly as it seeks to firm up encouraging findings so far.
A trial started in May last year has shown that the drug known as otilimab helps patients over 70 with severe COVID-19 get off mechanical ventilation or high-flow oxygen support faster, the British drugmaker said on Thursday.
The benefit for younger trial participants was not clear enough to merit further investigation, prompting the re-focus on the elderly in a follow-up trial with a targeted 350 participants.
After 28 days of treatment, 65.1% of elderly patients on otilimab plus standard of care were alive and free of intensive respiratory support, compared to 45.9% of patients who received the standard of care alone, according to the trial results.
Effective COVID-19 treatments are still in high demand as vaccination campaigns are only ramping up gradually and as new variants of the coronavirus spread rapidly.
“Given the profound impact this pandemic is having on the elderly and the encouraging data we are sharing today, we are hopeful this finding will be replicated in the additional cohort,” said Christopher Corsico, GSK Senior Vice President Development.
GSK, which acquired rights to otilimab from German biotech firm Morphosys in 2013, said it expects first results of the extended trial in the third quarter of this year, to be followed by talks with regulators if the initial findings are confirmed.
Many patients with severe COVID-19 suffer from an over-reaction of the immune system known as cytokine storm and GSK aims to reaffirm that the drug, originally designed to fight an autoimmune disease, can help.
Attempts to repurpose existing drugs to rein in an overactive immune system in COVID-19 patients have had mixed results.
AstraZeneca’s blood cancer drug Calquence failed to help severely ill COVID-19 patients. Roche’s arthritis drug Actemra, in turn, was shown to cut the risk of death among patients hospitalised with severe COVID-19.
GSK, and other drugmakers, are also working on antibody-based drugs that block the virus directly.
GSK has also brought to bear its knowledge on adjuvants, which are efficacy boosters used in many vaccines, working with partners including France’s Sanofi.
In addition, it is collaborating with CureVac on a next generation of vaccines that protect against new coronavirus variants.
(Reporting by Ludwig Burger; editing by Emelia Sithole-Matarise)
Daimler Trucks says zero-emission vehicles will cost thousands of jobs
BERLIN (Reuters) – Daimler Trucks’ shift to zero-emission vehicles will lead to thousands of job losses at the company’s German powertrain plants by 2033, its chairman said on Thursday, adding cuts would be gradual and achieved via retirements and voluntary packages.
“This is no revolution coming over night, this is an evolution,” Martin Daum told journalists on a conference call.
Electric vehicles have far fewer moving parts than traditional combustion engine models and as automakers shift production their engine and powertrain plants are expected to employ far fewer people over time.
When asked what consequences European Union CO2 emission reduction targets would have for Daimler Trucks’ German powertrain plants, Daum said they would have thousands fewer workers by 2033.
Daum would not say precisely how many jobs would be affected, but Daimler Trucks’ powertrain plants in Germany currently employ around 14,000 people.
“But this is no catastrophe,” Daum said. “We can use demographic changes and voluntary (severance) agreements. We will have no forced layoffs.”
Daum said a deal announced earlier this week with Cummins Inc, where the U.S. engine maker will develop and produce medium-duty engines for Daimler, would bring significant savings starting in 2025 or 2026.
“We will save a lot,” Daum said. “There will be a positive contribution to results – not tomorrow but … by 2025, 2026 there will be significant savings.”
Daum said he expected more such deals between manufacturers and suppliers so that truck makers don’t have to bear all the costs of developing a full range of commercial trucks.
Daimler said on Thursday its truck business saw a recovery in the fourth quarter, especially in North America and Europe, selling 121,000 units, almost double the figure in the second quarter, when sales were hit by the coronavirus pandemic.
For 2021, Daimler Truck sees significantly higher revenue than in 2020 and an increase in adjusted return on sales to 6-7% versus 2% in 2020.
(Reporting by Ilona Wissenbach, Nick Carey and Emma Thomasson. Editing by Caroline Copley and Mark Potter)
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