Why are retailers breaking online delivery promises?

The Christmas period has seen a wave of UK retailers’ technology failing to meet the basic needs of customers

Customer fulfilment has long been one of the more difficult aspects of the retail experience to get right.

As online shopping continues to rise year on year thanks to the proliferation of mobile devices, consumers are becoming more confident in ordering goods on the internet. However, they also expect to receive their goods quicker and as cheap as possible.  

Online sales in November 2014 saw the largest increase in IMRG Capgemini’s 14-year history. And, according to a study from Accenture, free shipping and delivery is the number one priority for customers buying gifts online in the lead up to Christmas.

This is a huge opportunity for retailers to provide a slick online customer experience. But this Christmas period has seen a wave of UK retailers’ technology failing to meet the basic needs of customers – receiving the goods they have paid for by the promised delivery date.  

Website glitches

The latest mishap comes from Sainsbury’s and Waitrose, as a glitch on both of the retailers' websites resulted in the cancellation of Christmas deliveries for customers.

Sainsbury’s cancelled hundreds of Christmas online orders following a computer failure, and some customers were offered re-delivery dates for after the holiday season. Meanwhile, problems with the Waitrose online platform led to failed deliveries, with the retailer advising customers to go into the store to collect their orders or they would be cancelled.

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Customers have turned to Twitter to vent their frustration, with one Sainsbury’s customer tweeting their anger about having their online order cancelled, saying they were going to shop at competitor Asda instead.

Both retailers have said the temporary IT problems have been fixed, but customers have still been left in the lurch, which at this time of year is even more displeasing than usual.

A Sainsbury’s spokesperson said: “We solved the technical problems on our website quickly on Sunday night. Since then, we have contacted all affected customers and worked with them to resolve any outstanding issues.”

Sainsbury’s has seen around 10% growth over the past year in its online delivery arm, with the introduction of an online delivery pass in 2013 where customers pay an upfront fee for deliveries of £40 or more for a year.

And somewhat ironically, the retailer also recently launched a Christmas pre-ordering HTML5 responsive website, which allows customers to pre-order their holiday produce. 

Speaking to Computer Weekly, digital and technology director Jon Rudoe said the site had only taken Sainsbury’s a few months to develop and is an example of the retailer taking the reigns and developing some technologies in-house rather than going to a supplier.

“In some areas we will want to buy a system that already exists and do nothing more than plug it in,” Rudoe said earlier in December 2014. 

“But in this area there aren’t a lot of known solutions out there, so we’ve taken the approach that we want to be much more involved with the development of the product – which is why we want to build more of an in-house development capability.”

Further glitches

But Sainsbury’s and Waitrose are not the only retailers to suffer from IT glitches in the run up to Christmas. The BBC also reported that Asda has had a “handful of customers experience technical difficulties”, but it insisted its website had not crashed.

Earlier in December 2014, Marks & Spencer found its distribution centre couldn’t keep up with the high demand and had to delay its online deliveries by up to two weeks. 

Additionally, the UK’s second-largest delivery company, Yodel, had to stop collecting parcels from retailers as it struggled with the substantial increase in online orders following Black Friday.

It’s a matter of not planning for the capacity, and that’s no excuse – they knew this year was going to be massive

Miya Knights, IDC Retail Insights

In addition, traditional bricks-and-mortar retailers are having to play catch-up with online giants such as Amazon – a business built on delivering to the customer. 

But while some retailers are investing heavily into delivery options to suit customer needs – such as click and collect, 24-hour lockers at convenience shops and train stations, and same-day delivery – these are left redundant if retailers can’t provide a reliable online service.

IDC Retail Insights senior research analyst for Europe Miya Knights said the problem stems from retailers not being prepared for more people than ever being online.

“It’s a matter of not planning for the capacity, and that’s no excuse – they knew this year was going to be massive. And unfortunately they’ve been ill prepared,” she said. 

“Particularly with Black Friday and Cyber Monday – this is something they’ve chosen to adopt and market heavily, and not being able to meet that capacity and demand, from a customer perspective, is unacceptable.

“Consumers are more savvy in getting their orders in time for deliveries. And the deadline is never going to move – it’s 24 December.”

Joined-up systems

E-commerce company SLI Systems said getting goods to customers in a timely manner is one of the ways to stay competitive in online retail, and it believes this will continue to be a trend in 2015.

Everybody needs to improve their system and how people can check the availability of a product online

Nicolas Foulet, Quiksilver

Senior vice-president of global digital, sports brand and retailer Quiksilver Nicolas Foulet said one of the difficulties in honouring fulfilment is not having a full view of the entire retail ecosystem. 

According to Foulet, retailers can have a great e-commerce platform, but to expose inventory in store and do things like click and collect you need the right order management system and enterprise resource planning tool which can link to the in-store point-of-sale system.

“It’s an overall ecosystem which is pretty complex,” said Foulet, who is currently using Demandware’s cloud-based platform for Quiksilver in the US and Europe.  

For a company which has an online offering as well as standalone shops and partner stores, having a shared inventory in place is very important, especially in the run up to Christmas. 

At the moment, the inventory is not live and is updated between three and four times a day, which is why sometimes orders are cancelled, but the Quiksilver cancellation rate is only 1%.

“Everybody needs to improve their system and how people can check the availability of a product online,” said Foulet.

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