Showpo operations manager Paul Waddy spoke to Josh McDonnell about the company's focus on speed of delivery and the important role this plays with the evolving customer.
What was the driver behind adopting faster delivery services?
Look, it's fast - Showpo is in fast fashion. We get our products to the market very, very quickly so we understand that when our customers order it they should also get their parcel very, very quickly. It's just about improving the user experience right up until the point of delivery rather than just kind of worrying about user experience online.
The user experience around logistics is super important. We want to get the parcel to the customer as quickly as possible so that they can wear it on a Friday night or wear it for the weekend. We understand that that's the way online is moving. It's all about on-demand and that's the way Showpo is headed as well.
Have you always had this service?
We've always had it. That's become our norm. What we are trying to do now is go even further than that so something that I'm looking at now is same day delivery and Saturday delivery. With the same day delivery, it's a twilight service so you can have it delivered when you get home from work between 6pm and 9pm.
We are launching click-and-collect soon so you can order your parcel and pick it up from one of thirteen hundred locations around Australia at a time that is convenient to you. Express is really now our base service but we are looking to improve even further than that and become real leaders in getting the product to customers super fast.
Are there significant costs with taking these sorts of approaches? Is it expensive?
Yes, it is. You are looking around, for instance, same day delivery, costing about double express. It is double the price and we don't pass that entirely onto the customer so we do take a hit on that but, again, it comes back to the fact that the user experience around logistics is really important to us.
We hope that by offering these services, like same-day and after-hours and Saturday delivery, that people will come to Showpo and really it should have an impact on conversion.
Particularly on a Friday so, a Friday, you've got a lot of people who probably want an outfit for Friday night or for the weekend so if we can now get a delivery out to somebody on a Friday evening - or even on a Saturday - we feel like we can do a lot of business in that area.
What is the key demographic that would use that same day? Who are the people that are targeted by same day delivery?
Well, firstly we are launching it in Sydney only first so we are going to be targeting the Sydney metro area so all the most postcodes in Sydney.
We envisage that a lot of it will be eighteen to twenty-four-year-old girls who are needing something for the weekend or it could be somebody who is at work and might need an outfit for after work that they are going out on a Friday night and need something for after work. I think it will have pretty broad appeal but, at the moment, we are going to test it in Sydney and see how it goes in Sydney.
I really see the spike being on a Friday I think where people have realised that they are going to go out on a Friday night and they just don't have that outfit and they can order up until 3pm and still get it delivered that evening.
What are the key times that people order?
We are seeing a steady flow. We don't really see people coming in just before the cut-off so we get a steady flow throughout the day. It doesn't really peak at a certain time.
Next day delivery is essentially the first point of call for delivery for the company or is there still the base level of delivery as low as you want to?
No, we don't go below express. We want to set our sales as a leader in the delivery experience for online shoppers so our base model is the express option.
That's just where we want to head. We want to be fast and responsive so we've adopted express as our - where other people have economy we've got express - that's our slowest service if you like.
Where are the key areas of delivery?
It's again pretty split, so not all rural areas will get overnight delivery because that's just subject to Australia Post and their network but it's still a lot quicker than the standard services. We certainly do get a lot of customers in the areas like the Central Coast, New South Wales.
Obviously, a lot of metro areas but we have a really good spread of customers so that's one of the benefits of the Australia Post express network.
It's wide-ranging so, if we were to use some of the other courier options that are out there, they don't cover regional areas and often they will outsource the final mile to local couriers so you are getting double-handling on the shipment.
Whereas Australia Post reaches all corners of Australia so it is really the fastest and most wide-reaching delivery network out there.
What are the key opportunities same day delivery provides Showpo as a business?
I think it gives us the ability to capture more business prior to the weekend, particularly on Friday. Fashion can be an impulse purchase at times so you may not have planned to pick up an outfit but a customer might have decided last minute that they would like an outfit.
Previously, if you order on a Friday, you would have to wait until Monday delivery but now if you need that garment - that item, that outfit - for the weekend you can have it delivered on Friday.
I think that it's going to see a significant surge in Friday orders for people just gearing up for the weekend and that's pretty exciting.
Do you think you will see a surge in people also adding more items to a cart?
I think it will result in more frequent conversions. It could result in an increase basket size but I would like to think that it's people who otherwise are waiting until Monday or forgot to buy an outfit. I'd like to think that it's targeting those people across the line.
Previously that girl would have thought, "Oh, it's Friday midday, I want to go out tonight but I don't have an outfit to wear. I'm not going to go," or, "I might look elsewhere because Showpo can't deliver on a Friday, same day."
Now I think it's going to get that customer going, "Oh, hang on, Showpo is offering same day delivery. I'm going to make that purchase after all." I think it will increase conversions rather than basket size.
I suppose it will have an impact or it could have an impact on basket size as well but I think the volume ordered is what is going to change.