How to optimise your
delivery proposition

Good Growth - New Look

New Look
The Challenge

New Look is one of the most successful multi-channel fashion retailers in the UK. But like everyone, they have faced numerous challenges as a result of the COVID Pandemic.

As buying behaviour shifted from stores to online, New Look had to adjust its delivery options and pricing to meet customers’ new expectations.

In March 2021, New Look engaged Good Growth to help reassess their delivery proposition and evaluate whether it was driving the best value for the customer and for their business.

New Look wanted to understand how changes to customer buying behaviour might influence their delivery choices, and whether a better mix of delivery options could drive higher customer acquisition and long-term customer loyalty.


By providing us with a better understanding of the role of delivery in driving customer acquisition and loyalty, Good Growth have given us the confidence to test and optimise our delivery mix.

Our new delivery offer remains one of the most competitive in the market and offers great value to our customers, but by optimising the mix we have also improved our profitability.”

Nick Ormerod Director of Ecommerce, New Look

The
Approach

customer centric culture

 

First, we set ourselves the task of answering some key questions:

  • What was the impact on commercial performance of the current delivery proposition?
  • What are the barriers to customers selecting different delivery options?
  • How should New Look use their delivery mix to increase profitability and life-time customer value?
  • Where are the opportunities to innovate upon delivery options in order to grow adoption by customers?
  • How do New Look segment their customers to attract and convert them to the most appropriate fulfilment option?

To do this we completed two sets of activities:

  • Customer Insight – we gathered and blended a variety of quantitative and qualitative customer insights, including voice of consumer surveying that helped us understand how the customer was experiencing the delivery proposition
  • Data Modelling – we designed a data-driven model to help New Look measure the impact of changes to the delivery mix. The model allowed us to input financial data and analyse the profitability of orders by delivery type, and to forecast the potential impact of changes to the delivery mix.

Armed with the insight and the modelling framework, we supported New Look in the execution of a series of tests on the delivery mix, using our model to forecast and report the impact of these changes in order to facilitate the progression towards a better delivery proposition.

infinity diagram

The
Findings

Our customer insight revealed several unexpected findings about the role of delivery mix on customer behaviour. With this newfound knowledge we were able to develop some hypotheses for testing.

New Look then commissioned Good Growth to run a series of tests to optimise free delivery thresholds and delivery pricing. By inputting a range of assumptions into our model prior to each test we were able to forecast the effect on profitability and customer acquisition. Once the test was running, we could observe the true impact and compare it with our baseline and forecast. Through this approach we were able to identify where our assumptions were accurate and where purchase behaviour varied in ways that we were not expecting.

THE RESULTS

With each successive test New Look have been able to optimise their delivery proposition to continue to offer great value to their customers whilst also protecting their margins.

New Look case Study

The
Conclusion

Multi-channel retailers face a challenging period ahead despite the re-opening of the high street. It is unknown how customers will respond to the long-term effects of the COVID pandemic and how any changes in behaviour will affect the commercial performance of high street shops as well as eCommerce.

Understanding changes in behaviour and responding to them in a way that provide the best possible customer experience, whilst also protecting commercial profitability, will require retailers to take an expansive approach to behavioural analytics to inform their commercial strategy.

Developing a delivery proposition that offers customers a competitive and comprehensive set of delivery options, and protects margins, will be an important factor in securing a stable future.

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