The results of an unpublished study on home deliveries conducted by SDA Bocconi and commissioned by CEVA Logistics have been presented. The research was carried out on a panel of Italian companies from various product sectors: evolution of Home Delivery services, new consumer approaches, impact on business and the role of logistics
Milan, 28 May 2008 - How have e-commerce and home deliveries influenced the company-consumer relationship? What are the implications for the various distribution channels? Which evolution? Which future? What about added value? Which role for logistics?
The first research of SDA Bocconi on Home Deliveries commissioned by CEVA Logistics, one of the leading supply chain companies in the world, answered these questions and others.
The survey is divided into three main areas: the number of Italian companies using home delivery methods, development prospects and principal critical areas perceived by companies that offer customers this service or that intend to offer it in the future, and the role of logistics operators.
Through online questionnaire, many companies has been involved in the study and divided into three categories:
- companies that only make home deliveries
- companies that also make home deliveries
- companies that do not yet make home deliveries
The e-commerce boom has opened the way for a new form of distribution: direct home delivery. The halt suffered by e-commerce, sector analysts expected would beat out traditional commerce, has been partly due to the insufficiencies linked to logistics services performance and to underrated home delivery management processes. However, this halt has left an important legacy in terms of the innovation of distribution channels and the potential linked to the producer-consumer relationship. Therefore, e-commerce is increasingly integrated in Home Deliveries, having become a legacy of logistics operators. For some time, the more far-sighted logistics operators have begun to invest in the development of this type of service, enriching it and turning it from a means of delivery into an instrument to connect and facilitate direct interaction with the end consumer.
For example, looking at the more "evolved" companies or those that offer both home delivery and traditional services, 50% of products sold on the web are not home delivered, according to SDA Bocconi's research on behalf of CEVA Logistics.
Furthermore, approximately half of these companies forecast a growth trend in the percentage of turnover arising from home deliveries over the next three years.
It is becoming increasingly clear that home delivery will play an ever-bigger role in companies' growth strategies and in their ability to integrate it with existing distribution choices and exploit the relational and service potential that this channel offers.
In this sense, the "bottom-up" approach, which starts by observing growing customer needs and is based on the ability to respond to these with suitable solutions is fundamental. 4 out of 5 companies that offer dual delivery methods believe that customers place great significance on being given the option to use Home Delivery services.
Therefore, the high added value of Home Delivery services is now well-known, but in order to provide the expected value, companies must provide committed and accurate management: almost all the companies interviewed entrust a specialised logistics operator with their home deliveries.
High performance Home Deliveries mean high customer satisfaction directly with the producer, making it possible to increase loyalty and ultimately transform the end consumer from a "consumer" into a true "advocate" of the product. This is why 2/3 companies that use Home Delivery as their sole means of delivery declare that business development is decisively linked to home delivery performance, while they all deem that at least a link exists between these two elements.
"These results are very important to us as they are evident testimony to the decisive role that logistics plays in conquering the consumer," stated Gianfranco Sgro, COO of CEVA Logistics SEMEA.
It is interesting to note that approximately 1/3 companies that do not make home deliveries believe that offering a Home Delivery service can have a significant impact on:
- Customer services
- Positive image and perception of stakeholders
- Possibility of having direct information on deliveries
The same percentage of these companies (1/3) is considering the possibility of offering customers a home delivery service.
The tendency toward future growth of Home Delivery responds to a need consumers have clearly manifested, and that is the possibility of purchasing and using consumer goods more quickly and directly, with the guarantee of having a series of assistance services that simplify access to these products along with straightforward and transparent payment methods.
From this perspective, the more innovative logistics operators have developed an avant-garde, ad hoc Home Delivery service. A series of services have been implemented that have rendered Home Delivery a true instrument of direct contact with the end consumer, thanks to services such as: a dedicated web portal, call centres, possibility of supplying timely feedback on deliveries and assistance services.
For many companies involved in the research by SDA Bocconi for CEVA Logistics, irrespective of which of the three groups they fall into, it is highly important to have the possibility of collaborating with a logistics operator capable of integrating itself with the business information system.
Approximately 1/3 of all companies surveyed tell a significant interest in collaborating with a logistics operator able of offering an integrated service to manage sales and home deliveries through an appropriate site or portal.
Today, only around 20% of the interviews companies do not have any interest in this delivery option.
More than half of the companies that only carry out home deliveries state that the most relevant aspects of the home delivery service are:
- Track & Trace
- Punctual, fast and reliable delivery
- Cost-effectiveness
The most critical aspects for the companies that combine the two delivery methods are:
- Punctual, fast and reliable delivery
- Regional coverage
- Track and Trace
The companies that do not use Home Delivery believe that if they were to offer a service of this kind, the principal critical aspects would concern:
- Punctual, fast and reliable delivery
- Regional coverage
- Cost-effectiveness
As predicted, these latter companies have a level of sensitivity to and understanding of this issue that is less than that of the other two categories of companies observed in the research.
"From the analysis of risks perceived by companies with an inadequate logistics service, it is also evident that logistics management cannot be improvised and that a complex added value service like this requires extensively consolidated skills and know-how", continued Gianfranco Sgro. "In other words, there is no alternative to excellence as it is a necessary condition for avoiding the risk of transforming home deliveries into a boomerang for companies whose products are delivered or for distribution companies that take this route."
Sara Faravelli
Marketing & Communication Manager
+39 02 89230270
sara.faravelli@cevalogistics.com
Laura Poggio
Burson-Marsteller
+39 02 72143527
+39 340 5505096
laura.poggio@bm.com