John Lewis Partnership
“Descartes Reservations™ and Route Planner™ solutions were integral to our strategy of offering a more extensive, but unified delivery service. The advanced optimisation capabilities and architecture of the Descartes solutions were critical, bringing new delivery service options to our customers in an economically feasible way. ”
Andrew Gay - Systems Manager
Fulfilment costs reduced £1.8m
Increased delivery productivity 35%
Delivery windows provided at POS
John Lewis & Retail Delivery
John Lewis & Partners is one of the United Kingdom’s most successful retailers.
Its product line of over 350,000 items includes a range of categories, including some - such as furniture and appliances - that require delivery and in many cases installation and other services. The retailer is known for creating a superior customer experience and service – from the time they engage the customer, to the product is in their hands is paramount for the organisation.
In the early 2000s, virtually every multichannel or omnichannel retailer worldwide - John Lewis included - had a delivery scheduling system that offered the customer no options, that took a very long time - often days - to complete, and that failed to offer the customer additional - and profitable - services.
John Lewis saw this challenge as an opportunity and decided that it was time to innovate their logistics with a long-term initiative, called Programme Q.
Innovating Customer Experience in Retail Delivery
“Personalised” and “customer-centric” are parts of the mantra of omnichannel retailing. Those characteristics are ubiquitous at the point of sale. Customers can purchase a product from physical, online and mobile points of sale, selecting just the right size, colour and so on. Providing this to customers through a well-integrated supply chain is a critical, common imperative for retailers of every size, and for their customers.
When it comes to home delivery, that same level of personalisation and customer-centricity is conspicuously absent.
Home delivery still operates on the premise of “any colour as long as it’s black.” Customers generally have only minimal control over when and how a home delivery takes place. They are usually unable to confirm the exact delivery window at the point of sale. They have to wait for a call back (that’s often automated so there’s no chance to respond) that comes sometimes hours—or even days—after their purchase, to know what their actual delivery time will be. Should the order require separate services, those have to be scheduled separately. If there are other orders already scheduled for the address, they will come separately.
Improving The Retail Delivery Experience
When it came to creating customer-centric fulfilment, John Lewis + Partners set a goal that scheduling a product for delivery had to be as easy, as fast, and as flexible for the customer as buying the product was. It had to be profitable for John Lewis + Partners as well.
To satisfy that mandate, John Lewis + Partners provides a delivery scheduling system that lets the thousands of customers who schedule deliveries each day choose and schedule - at the point of sale - the delivery date. There are no delays between placing an order and scheduling the delivery. The customer has a range of choices so that the delivery is scheduled for their convenience. They bundle in any required services (like electrical, installation or takeaway) at the same time.
Just as importantly, John Lewis + Partners did this in a way that lowered its delivery costs by millions of pounds and directly contributed tens of millions of pounds to its top line.
Fuel Savings & Carbon Emissions Calculator
Creating a Retail Delivery Solution with Descartes
John Lewis + Partners combined its own innovative thinking with Descartes Home Delivery Solution to create a fulfilment process that delivers perfectly on the promise of customer-centric delivery.
To do that they needed to take advantage of the unique capabilities Descartes’ solution offered.
Implementing Dynamic Delivery Appointment Scheduling
Success starts during the ordering process where there is the greatest opportunity to influence the customer to take delivery appointment options that benefit John Lewis + Partners.
Every delivery appointment booking is unique and depends not only on the customer’s order but also on all of the existing orders. Providing delivery options to fit the delivery personas is critical to creating a differentiated customer experience and increasing revenue. There is no reason, however, that the options presented cannot also benefit the retailer, reducing costs and maximising delivery capacity.
Dynamic delivery appointment scheduling provides multiple options simultaneously and allows the retailer to present these during the buying process.
Each delivery option is scored for best delivery performance for the retailer, so the retailer can determine in real-time which options to present to the customer. Because the options are dynamically generated, they can be unique to the customer type, size of the sale, etc. and the retailer can display the options that potentially meet the customer’s need and are the most economical for the retailer—hence the concept of profitable choice.
Another benefit of dynamic delivery appointment scheduling is that it eliminates unscheduled or infeasible deliveries because the customer is only presented with viable options to select. To produce the most productive options, dynamic delivery appointment scheduling requires real-time optimisation technology that considers the road network, vehicle type and capacity, operational rules, customer preference and existing orders.
All this happens instantly after the “Delivery Options” button is clicked, a calendar view of available time slots is presented to the customer or in-store partner. Only those windows that are profitable are presented, and there are multiple options across the time horizon. There are different time window durations offered – all day, 4-hour and 2-hour with different delivery prices. In addition, John Lewis + Partners highlights “eco” delivery options where they will already be in the “area” of the customer and have the least carbon footprint impact – they are also the lowest cost delivery options for John Lewis + Partners.
Continuous Route Optimisation
Instead of handling route optimisation in batch form, John Lewis + Partners now updates and optimises its route plan continually— in the same way, retailers everywhere handle their product inventory.
The optimisation engine continually looks at new orders and changes as they come in, keeping the promised delivery day and time, but looking for new combinations that lower delivery costs and free up delivery capacity. Continuous optimisation works in combination with dynamic delivery appointment scheduling to maximise the customer experience and delivery slot availability while minimising delivery costs.
The Impact of Optimising Retail Delivery for Customer Experience
Providing customers with the same experience, scheduling deliveries as they have when buying products has significantly strengthened the John Lewis + Partners brand, its reputation as an innovative omnichannel retailer, and its customer loyalty.
You can’t go wrong by profitably offering the customer choice and convenience. The solution delivered a substantial return on investment for John Lewis + Partners—in terms of both cost savings and increased revenue.
- They cut logistics costs by reducing their fulfilment costs by £1.8m.
- Cut an average of 1 mile off every delivery route, decreasing logistics costs by millions of pounds and reducing carbon emissions.
- Created new revenue streams for both premium deliveries and services.
- Increased revenues by tens of millions of pounds, due to increased service orders and increased purchases of premium delivery windows.
- Increased on time and completed orders.
- Increased delivery capacity by 35% without increasing resources.
Overall, the solution gives the customer choice and convenience whilst delivering a substantial return on investment in terms of both the significant cost savings achieved and increased revenue from the sale of value-added services.
Going into the Future
John Lewis + Partners is looking ahead not just at ways to further improve customer choice for deliveries but to envision how it will evolve as the omnichannel evolves.
Since the original omnichannel modernisation program John Lewis + Partners has implemented the Descartes Mobile solution to provide a truly seamless delivery experience and better manage the fleet during delivery execution.