Evri has become the high street’s greatest ally as fed-up online customers vote with their feet
Lockdown fed the digital boom but delivery and service problems show us why we shopped in person
Ronald Reagan used to say the nine most terrifying words in the English language were: “I’m from the government and I’m here to help.” But, then again, he never knew the icy dread which comes from a text message that reads: “Your parcel is now with your local Evri courier.”
First World problems? Sure. Nevertheless, it’s pretty astonishing how courier companies – aided and abetted by online retailers – have managed to turn the delivery of brown paper packages tied up with string (and similar) into one of modern life’s most grating minor irritants.
Seemingly everyone has their own horror stories of parcels being left in bins, thrown over walls or simply stolen. “Your local courier tried to deliver your parcel today but you weren’t in”, must now rank as one of the most commonly told lies in the UK.
Last week a DPD customer became so exasperated with the lack of assistance provided by a chatbot that he changed tack, got it to write haikus about how useless DPD was and posted them on social media. And this is the company that usually tops the customer satisfaction surveys in which Evri routinely comes last.
Whistleblowers have revealed how low pay, unvetted staff and depot failures are inevitably contributing to dire service. Insiders allege that a dearth of drivers has resulted in those who have been suspended for stealing being re-employed just days later.
What’s more, retailers know all this. Why else would so many refuse to tell shoppers which courier will be delivering their purchases until after the sale has been made?
After years of precipitous growth, the long boom in internet shopping appears to be levelling off. Online sales in all of Europe’s main markets were flat last year, according to Forrester Research. As we reach an inflection point, the ugly baby contest between “last mile” delivery providers both illustrates the issues the retail industry faces while providing a partial explanation for them.
During the pandemic, the share prices of online-only fashion retailers like Boohoo and Asos went stratospheric. At least part of the rationale for this was that many shoppers in the UK, which was already one of the most developed online markets, may never return to high streets and shopping centres.
Not so. If anything, lockdown appears to have reminded shoppers what they were missing. Meanwhile, the additional strain placed on online retail logistics and delivery networks showed up the flaws in the system. These have been exacerbated by post-pandemic snarl-ups in global supply chains.
Low barriers to entry mean there are always new pretenders to the fast fashion crown and, sure enough, yesterday’s disruptors are today being disrupted. Having dethroned H&M and Zara, the likes of Boohoo and Asos now find they are being usurped by super-slick Asian operators such as Temu and Shein.
At the same time, traditional bricks-and-mortar retailers have finally started to get their acts together. Shoppers can buy online, for example, but collect and return items at stores. Fresh life is also being breathed into the high street with small, but much needed, falls in rent and business rates.
Boohoo’s shares are now worth about a tenth of what they were at their peak and have slipped below what they listed for in 2014. Asos’s shares, which topped out at more than £76, are now trading at £3.60. But shares in fusty old Marks & Spencer, once a symbol of all that ailed the British high street, doubled last year and the company was readmitted into the FTSE 100.
Beset by problems, many online retailers have switched from chasing growth to focusing on profitability. While their shareholders may be breathing a temporary sigh of relief, this is ultimately likely to be more good news for the high street.
With sales growth slowing and competition ramping up, companies are facing increased costs for marketing at the same time as a price war eats into margins. Profitability will therefore most likely come from costs being cut elsewhere.
Some online retailers have already introduced fees for returns, negating one of the main benefits of online shopping. And many are outsourcing delivery to couriers chosen based on price alone. It is already patently obvious that this is a false economy.
Surveys show not only do shoppers have deeply visceral opinions about delivery companies (to put it mildly), they will also blame the retailer for any problems. Over four fifths say they will never return to a shop after just one poor delivery experience. This is how downward spirals begin.
Jeff Bezos must be laughing into his Stetson. Amazon didn’t make a profit until 2003, which was nine years after it was founded and seven years after going public. Much of the money Bezos made and raised early on went into building a logistics network.
This cost a fortune. But it means Amazon can now provide a far superior end-to-end service. And, as with Amazon Web Services, it’s now being offered to third parties. Bullish analysts have recently forecast that Amazon’s supply chain apparatus could soon be generating over $100bn (£78.7bn) of revenue a year.
Not every retailer can be Amazon. But those companies that are currently adopting the exact opposite approach might check if that’s entirely wise.
Analysts suspect online retail will continue to grow, albeit at a slower pace. However, the sector has become way too competitive for all to survive.
The winners from the coming shake-out will be those that realise that delivery can’t be an afterthought.
Meanwhile, whatever traditional high street retailers are paying the double agents they’ve embedded in the UK’S courier companies is clearly money very well spent.