omnichanel last mile | a last mile benchmark series ... · express delivery, which is in line with...

Omnichanel Last MileA last mile benchmark series — Russian retail marketElectronics & Telecom industrySeptember 2018

of 26© 2018 Deloitte Consulting LLC Omnichanel Last Mile

A last mile benchmark series — Russian retail market. Electronics & Telecom industry

Content

Omnichannel Visibility

02Delivery Terms

03

Return Terms

04

Methodology

05Executive Summary

01

Executive Summary


Delivery Terms

Return Terms

Methodology

Omnichanel Last MileA last mile benchmark series — Russian retail market. Electronics & Telecom industry

© 2018 Deloitte Consulting LLC

Slide 3 of 26

Executive Summary



Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 4 of 26

Introduction

Executive summary

The last mile benchmark seriesThe report on Electronics & Telecom is the first publication in the «Last mile benchmark series», where 170 retailers are compared in in delivery & return services.

MethodologyIndustry segments are compared to Best-in-Class segments in Moscow and cross-retail average, resulting in a scoring model per service categoryBased on the scoring model, the companies were rated as follows:

Least Performing Lagging On par Leading Best-in-Class

Lowest cross-retail score

Less than cross-retail average

Similar to cross-retail average

Higher than cross-retail average

Highest cross-retail score

Electronics & Telecom

Food & Beverage

Home Fashion & Apparel

Beauty & Care

Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 5 of 26

Key findings

Executive summary

Return locations

Return time window

Card payment on delivery

Store stock visibility

Lead times

Delivery costs

Free deliverythreshold

Premium delivery

Delivery locationsReturn

costs

Executive Summary


Delivery Terms

Return Terms

Methodology

Key performance

indicatorsfor the

industry

Strong lead time offerings

Electronics & Telecom scoresLeading and Best-in-class in delivery lead time and delivery options choice.

Low delivery costs

Average Electronics & Telecom delivery costs are below cross-retail average.

Short return time

Average Electronics & Telecom return time window is significantly shorter than in other industries.

Industry strengthOn par capabilityImprovement opportunity



Slide 6 of 26

Three things electronics & telecom could do to bring last mile services to the next level

Executive summary

Increase service levels when returning goods

Implement the return of goods for the creation of new business opportunities and customer acquisition

There are opportunities for enhancing this service through increasing the return window of quality goods, as well as using returns from courier services as a way to replenish POS inventories. Further advancement of return services is key to industry success.

Maintain leadership on delivery

Use advantages stemming from well-known and high demand goods in order to maintain high delivery standards

Short lead time for high tech and high demand goods is a competitive advantage for Electronics & Telecom.

Industry players lead in terms of delivery lead time and choice of delivery options (courier delivery, self collection, pickup points, parcel lockers).

Provide delivery-related, value-added premium services

Maximize benefits through offering value-added services

In addition to leadership in offering premium delivery services (including unconditional free delivery and premium same-day delivery), there are many revenue generating opportunities such as fine tuning of devices, installation of applications in relation to courier delivery, sale of consumables by subscription, pre-ordering goods and release day delivery.

Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 7 of 26

Omnichannel visibility



Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 8 of 26

Omnichannel visibility | Store Stock Visibility

14% 15%28%

86% 85%72%

AverageElectronics & Telecom

Store stock visibility

No visibility

%of co

mpanies

% showing store stock to consumers

Best-in-Class1

1 Home goods

-14%

Only 14% of Electronics & Telecom retailers provide stock visibility online Executive Summary


Delivery Terms

Return Terms

Methodology

On par

14% of Electronics & Telecom retailers provide precise and current store stock visibility, which is 1% below the cross-retail average.

Meanwhile, the industry has significant potential for improvement as it lags behind Home industry (Best-in-Class in terms of providing stock visibility) by almost twofold (14% compared to 28%)

Moreover, companies of all industries are well positioned to develop their store stock visibility provision capabilities.

-1%

1 Home



Slide 9 of 26

Delivery terms

Executive Summary


Delivery Terms

Return Terms

Methodology

Last mile deliveryA last mile benchmark series — Russian retail market Electronics & telecom retailers




Slide 10 of 26

Delivery terms | Delivery Times

% o

f co

mpanies

5%

62%

24%

5% 5% 0%13%

49%

21%

7% 4% 7%

< 1 дня 1-2 дня 2-3 дня 3-4 дня 4-5 дней > 5 дней

27hours

Average Best-in-Class2

1 Moscow 2 Food & beverage

The average Electronics & Telecom lead time1 is 42 hours, which is below cross-retail average

Leading

Electronics & Telecom retailers demonstrate high delivery standards. On average, consumers receive goods within 42 hours after ordering, faster than the cross-retail average (47 hours).

90% of Electronics & Telecom retailers deliver goods within 3 days. At the same time, lead time of all Electronics & Telecom retailers does not exceed 5 days.

Average lead times

42hours

Average Electronics & Telecom

47hours

Cross-retail average


Average

<1 day 1-2 days 2-3 days 3-4 days 4-5 days >5 days

Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 11 of 26

19%14%

48%

19%

0%

13%

44%

32%

8%2%

RUB <150

RUB 150-300

RUB 300-500

RUB 500-1000

RUB >1000

14%

2%

1 Beauty & care

Delivery terms | Delivery costs

Average delivery costs for Electronics & Telecom is RUB 381, on par with cross-retail average

On par

The average delivery price for Electronics & Telecom is RUB 381, which is only 6% below the average delivery price for all industries (404 RUB).

At the same time, 14% of Electronics & Telecom retailers offer free delivery irrespective of the good price, which is the highest share in the retail industry.

% offering free delivery Average delivery costs in case of paid delivery

%of co

mpanies


Average

RUB 381


RUB 240


RUB 404


Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 12 of 26

91%

43%

73%

13%

38% 38%

0%

13%12%

44%

26%

8% 9%

RU

B <

1000

RU

B 1

001-

3000

RU

B 3

001-

5000

RU

B 5

001-

10000

RU

B >

10001

1 Beauty & care%

of co

mpanies


Delivery terms | Free Delivery Threshold

Only 43% of Electronics & Telecom retailers set thresholds for free delivery, which is the ‘worst’ level in the industry

Least Performing

Electronics & Telecom retailers with free delivery thresholds account for 43%, which is significantly ‘worse’ than the cross-retail average for other industries (73%).

The average Electronics & Telecom free delivery threshold exceeds cross-retail average by 20% amounting to RUB 6,156 per purchase.

% offering free delivery above a

threshold

Average threshold for free delivery


AverageBest-in-Class

RUB 3,077


RUB 6,156


RUB 5,105


Executive Summary


Delivery Terms

Return Terms

Methodology



Electronics & Telecom retailers ensure fast delivery to clients

Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 14 of 26

19% 19%36%

81% 81%64%

Electronics &telecom

Cross-retailaverage

Best-in-Class

0.0

0.5

1.0

1.5

2.0

2.5

0 300 600 900

Additional costs, RUB

Lead tim

e reduct

ion, days

1 Home

1



Delivery terms | Premium Delivery

Nearly 20% of Electronics & Telecom retailers offer express delivery

On par

Almost 20% of Electronics & Telecom retailers offer express delivery, which is in line with cross-retail average. At the same time, the price that consumers pay for the reduction in delivery time is the highest for the industry and amounts to RUB 185 per each saved day.

% offering express delivery

Cost of express delivery versus lead time benefit

Express delivery

No express delivery

-17%


Average

Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 15 of 26

38%

98%

57%

24%

100%

100%

Pick-uppoint

Store

Home

%of co

mpanies

1 Best-in-class per delivery location type

0%

76%

24%24%

59%

17%

Delivery terms | Delivery Locations

Electronics & Telecom retailers are Best-in-Class by the number of offered delivery location types

Best-in-class1

All reviewed Electronics & Telecom retailers offer at least two delivery location types.

The number of Electronics & Telecom retailers offering store delivery exceeds the cross-retail average by 23% (ranking second after Home industry).

Electronics

Average

1 2 3

Average number of location types

% offering location types

1.9


2.2

Average Electronics & Telecom (Best-in-

Class)1

# of location types

Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 16 of 26

Leading

The percentage of Electronics & Telecom retailers offering a card payment on delivery option for home delivery (71%) is bellow cross-retail average.

In the Leading segment (Home industry) 76% of retailers offer such option.

Card payment for home delivery option

71% 66%76%

29% 34% 24%

Electronics &

Telecom

Cross-retail

average

Best-in-Class

1 Home

% o

f co

mpanies

1

Delivery terms | Card payment on delivery

71% of Electronics & Telecom retailers provide an option of paying by card for home delivery

-5%

-5%

Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 17 of 26

Return terms



Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 18 of 26

5%-

9%5%

17%13%

Return terms | Return time window

48%

33%

14%

23%

40%

23%

38%

29%

4%

<7 days 7-14 days 15 -30 days

% o

f co

mpanies

1 Excluding food & beverage as well as beauty & care

2 Home

31-180 days >180 days

…

Electronics & Telecom retailers significantly lag behind in terms of the return time window with respect to quality goods

Electronics & Telecom has the shortest average return time window (15 days) among the reviewed industries, excluding the Food & Beverage as well as the Beauty & Care segments where the return of goods is subject to legal restrictions.

An average time of 15 days is due to the fact that the return time window for 19% of Electronics & Telecom retailers equals or exceeds 15 days.

Least Performing

Return time window for quality goods


Average1 Best-in-class

15 days


38 days

Cross-retail average1

72 days


Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 19 of 26

38%45%

56%

62%55%

44%

Electronics &Telecom

Cross-retailaverage

Best-in-Class1

Return terms | Return point selection option

38% of Electronics & Telecom retailers allow consumers to decide where to return

Least performing

38% of Electronics & Telecom retailers allow consumers to decide where to return, which is 7% bellow cross-retail average

Electronics & Telecom industry is far behind Fashion & Apparel (Best-in-Class) in terms of return point selection option, but still is 6% above Home industry.

Companies offering a return point selection option

1 Fashion & apparel

%of co

mpanies

Return point selection is available

Return point selection is not available

-7%

-18%

Executive Summary


Delivery Terms

Return Terms

Methodology



Electronics & Telecom significantly lags behind other industries in terms of the return time window for quality goods

Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 21 of 26

MethodologyOmnichanel Last Mile

A last mile benchmark series — Russian retail market. Electronics & Telecom industry© 2018 Deloitte Consulting LLC

Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 22 of 26

25 Companies

Sub industries

• Furniture

• Out-of-town Leisure and Gardening

• Tools and other equipment

• Decoration

Benchmarked industries

Methodology

Last mile performance of 170 retailers is benchmarked

48 Companies

Sub industries

• Groceries

• Food

• Beverage

43 Companies

Sub industries

• Apparel

• Footwear

• Sports

• Accessories

33 Companies

Sub industries

• Cosmetics

• Beauty and Health

• Care

21 Companies

Sub industries

• Consumer Electronics

• Telecommunications Companies


Food & Beverage

Home Fashion & Apparel

Beauty & Care

Executive Summary


Delivery Terms

Return Terms

Methodology



Slide 23 of 26

Benchmarked companies

Methodology

0 calories

101 Tea Sorts

220 Volt

Azbuka Vkusa

AKSON

Alyonka

Ambassador manufactura

Auchan

Beeline

Vernost kachestvu

VkusVill

Voskresnaya Yarmarka

Vse instrumenty

Cosmetics Gallery

Delikateska

Yves Rocher

Italyanskiye Traditsii

Kantata

Karusel

Key

Kofael

Kofemanych

Kupi orekh

Kupi oreshki

Lavka Coffey-Chay

Lenta

Letoile

M.Video

Marinel chay

MegaFon

Miratorg

More ryby

Moskhoztorg

MTS

Muzhik i myaso

Myasnoy No.1

Nastoyaschiy Syr

Perekrestok

Petrovich

Pirozhenka

Planeta chaya

Podruzhka

Pult

RAYT

Regard

Remit

Rive Gauche

Rybnyokean

Ryboedov

Salonnayakosmetika

Santekhnikaonline

SaturnStroyMarket

Sakhalinsky ikornydom

Svyaznoy

Severnyemoreprodukty

Semferm

Semchashek

Snow Queen

Sozvezdiye Krasoty

Sportmaster

Stolplit

StroitelnyDvor

SyrnyBoutique

SyrnySommelier

SyryMira

TvoyDom

Tekhnopark

Untsiya (Ounce)

Utkonos

Funduchok

Kholodilnik

TSUM

Chip and Dip

Chef Orekh

Pobeda Chocolate Plant

Eldorado

Yulmart

003.Ru

1001parfums.ru

Adidas

Agent Provocateur

Articoli

Askona

Beauty boutique

Beauty Discount Center

Beauty Home

Bershka

Bobbi Brown

BONPRIX

Butik.ru

Calvin Klein

Calzedonia

Castorama

Chicberry

Citilink

Clarins

Clinique

Columbia

Converse

Crocs

Decathlon

Deoshop.ru

DNS

Ecco

ePool.ru

Estee lauder

Expert Professoinal

Farfetch

French Kiss

H&M

Henderson

Hoff

HolySkin

Homеme

Ikea

Ile de Beaute

Incanto

Inglot

Intimissimi

Isolux.ru

Kiehl's

KikoMilano

KupiVip.ru

Kuvalda.ru

Lamoda

Leroy Merlin

L'Occitane

Lush

MAC

Makeup

MANGO

Marks&Spencer

Mascotte

Massimo Dutti

mebelvia.ru

Meb-Online.ru

Media Markt

Metro Cash & Carry

mnogomeb.ru

NEXT

Nike

NYX

OBI

Onlinetrade

Orexland

Oriflame

Ostin

Oysho

Ozon.ru

Pazolini

PUDRA

Pull&Bear

Quelle

Re store

Reebok

roskosmetika

Samsung

Sony

Stradivarius

Tasty Coffee

Tezenis

The Body Shop

TJ collection

Tom Tailor

TVOE

United colors of Benetton

Wildberries

ZARA

Zarina

Executive Summary


Delivery Terms

Return Terms

Methodology



Contacts

Methodology

Research participants

• Diana Kuzmicheva

• Dmitrii Ermolaev

• Elizaveta Shramkova

Irina Biryukova

Andrey Semenov

Stanislav Kim

Vladislav Chechetkin

Vardan Gasparyan

Executive Summary


Delivery Terms

Return Terms

Methodology



Become the best-in-class retailer, Today

Thank you.

Executive Summary


Delivery Terms

Return Terms

Methodology

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omnichanel last mile | a last mile benchmark series ... · express delivery, which is in line with...

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