Interview with Yodel's Executive Chairman Dick Stead

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Dick Stead has been in the courier business for many years before he joined Yodel where he now serves as Executive Chairman. Since he took the helm at Yodel there is no doubt that many changes have taken place and we constantly hear good things from the retailers who use Yodel as their courier.

I caught up with Dick to ask him what matters most to consumers and what retailers need to be thinking about when putting together their delivery options in 2017. This is what he had to say:

What services are customers demanding and are they willing to pay for it?
IMRG’s delivery index has demonstrated a continued shift towards next day services. This is partly the result of consumer demand and expectation, but also the fact that retailers are using free next day delivery as a promotional tool.

While free delivery continues to be a deciding factor when making a purchase, with 82% of respondents to our own survey citing it as important (just behind tracking and free returns), we need to increase consumer understanding of why some deliveries may take longer, in order to increase cost effectiveness, and why some premium options may cost extra.

Will same day delivery take off or will it remain a niche offering?
Although the marketplace is growing for same day delivery, and consumers are very familiar with the concept for fast food, there is still a limited demand when it comes to mainstream retail.

Where it is required, 84% of consumers told us that they would be willing to pay a premium for same day delivery, with around a third saying that we pay up to £4 extra for the service. Interestingly this rises to 46% of respondents aged 18-24, and this is also the group for who late order cut off times are also important, so perhaps we can deduce from this research that convenience and instant gratification is fundamental to Generation Z, and that’s where the future lies.

For now, the key question is, can same day delivery be offered at a price that consumers are willing to pay? And the answer to that is it depends on the item. As a retailer, same day delivery may not be cost effective for a box of socks, but you might be able to offer it for distress or high-ticket purchases such as a printer or a gift.

If you can get your goods, your driver and your customer within reasonable proximity of one another, then you’ve got a really strong platform for same day delivery. Retailers are succeeding when they restrict same day delivery to locations such as city centres where they have a store and a customer base– so the process can be both timely and economical.

Do couriers need to start collaborating?
CollectPlus is a great example of collaboration. It was founded by Yodel in partnership with PayPoint, and it has given our clients’ customers far greater access and options, allowing them to collect or return their orders from over 6,000 counters nationwide.

The next step in its evolution is encouraging greater collaboration within the delivery industry itself, as we open up CollectPlus to other parcel companies via PayPoint. It’s an exciting time.

How long can retailers sustain ‘free delivery’?
Internet retailing boomed because marketers created free delivery to encourage customers to shop online and our research has consistently shown that the vast majority of consumers still consider it important.

However, the result has seen many carriers squeezed on price in order to keep delivery costs low enough to be absorbed by the retailer. Unfortunately, it’s not a sustainable model and we need to educate consumers on the range of services available and why there may be a charge for some of them.

What has changed since Christmas 2014 and what should all retailers be thinking about ahead of Q4 2017?
2014 saw carriers flooded with unprecedented volumes of parcels due to the Black Friday promotions. Since then, carriers and retailers are working more closely across c-suite level, to ensure that the delivery promises made to customers can be kept.

Retailers recognise that it costs a lot of money to scale up to meet the artificial demand created through events such as the Cyber Weekend, and last year we saw that by elongating their promotions many were able to spread that demand across a longer, more manageable, period.

Retailers offered services that could be delivered, and ultimately consumers were happy, which we saw reflected in our own customer satisfaction survey results, with both our customer and client net promoter scores increasingly significantly, compared to the same period in 2014.