Almost half of online shoppers abandon their carts due to lack of delivery flexibility
Making sure you invest enough in the back end to support the front end
Author: Jeff Taylor, Regional Director UK & Ireland, Honeywell Sensing and Productivity
One of the most important factors for today’s online consumer is the ability to understand exactly the delivery progress of their shopping order and a precise time that they will receive it. People are no longer willing to spend all day at home waiting for a delivery.
Consumers want accurate status reports online that can track their delivery down to within a 15-minute window.
This shift in consumer expectations is a major challenge for both retailers and transport and logistics (T&L) operators. It is driving change in terms of the need for real-time data availability at all stages of the delivery process, being able to give customers access to this information and ensuring that realistic time frames are set for delivery and that they are always met.
This is of little surprise considering a survey recently conducted by Honeywell Sensing and Productivity Solutions showed that 77 per cent of online shoppers were influenced by their delivery experience. Additionally, it was revealed that 48 per cent of online shoppers abandon their carts due to poor delivery options.
So what are some of the ways that retailers and T&L companies are ensuring they meet customer expectations and encourage loyalty?
Achieving a successful first time delivery
One bad customer review on social media can potentially result in 30 lost customers. You don’t have to search very hard to find complaints about retailers and the delivery service they offered. This means the stakes are high in making sure consumer expectations around receiving the right product at the right time are met during the first delivery.
Many companies are now using route optimisation tools that can predict the time of delivery to the customer within a one hour timeframe. This kind of technology helps to map out stop sequences and calculates the estimated time of arrival for all pick-ups and deliveries on a route. This information can then be shared with customers for accurate status reports.
Technologies such as this that reduce the need for re-delivery not only better meet consumer demands for real-time information, but also save retailers’ money, with some businesses reporting that just a one per cent improvement in achieving first time deliveries saving them around $100 million per annum.
Keeping up with the Jones’
There is currently huge competition between all e-commerce providers, ranging from the big retailers right through to the start-ups. They know that a customer’s decision making is firstly about price, but secondly how easy and flexible shipping is. If they are not offering the latest and full range of delivery options – click n collect, parcel shops, pre-delivery shops, drop boxes etc. – it’s clear that consumers will choose to shop elsewhere.
While many of the bigger retailers have their own delivery infrastructure in place, smaller businesses have to outsource delivery to 3PLs. 3PLs rely on this business and they are also very motivated to offer the same or a better service than their competitors.
For instance, in the UK, which is the most mature online shopping market in the world, Hermes became the first retailer to offer delivery on Sundays. Within three to four weeks all of the big retailers and 3PLs were offering Sunday delivery as well. Although this was a massive operational change, which took away the one down day of the week that had long been used for IT maintenance, the motivation to keep up with others in the market was strong enough to make it happen.
Owning the supply chain from end-to-end
One big challenge for retailers is how to control the quality of the delivery process from end-to-end. eCommerce has opened up the globe and retailers now rely on postal and courier companies in multiple countries to successfully deliver their products to the end customer. This poses many issues in terms of ensuring on-time deliveries and data about the delivery process accurately and safely being supplied to the consumer.
The importance of being able to control the quality of the delivery experience is reflected in Asian retailer, Alibaba, becoming the first retailer to own a national postal service – Singapore Post. Singapore is a gateway into the western world and supports Alibaba’s aggressive push into high growth markets such as Europe.
Another example is Amazon, which is currently building their own supply chain from the ground up in order to take full control of their delivery process.
Two-way customer communication
Many 3PLs that are contracted by retailers to make their customer deliveries are now investing in mobile computing technology that has the ability to arm their workers with a wealth of information and the ability to communicate directly with the end customer they are delivering to.
Where in the past delivery companies had no direct access to the customer, today they need to be able to access customer’s details so that they can communicate directly with them about the status of their delivery and the expected delivery time. This also opens the way for consumers to communicate directly with the delivery company to make changes regarding where they want their parcel delivered or the time-frame in which it will be delivered, to make it more convenient for them.
People live very busy lives and any way in which retailers and delivery companies can include consumers in the delivery process and give them more control over this will make them happier.
Consumer control is the retail trend that is here to stay and rising expectations around delivery flexibility and timeliness show no sign of slowing up. It is therefore more important than ever before that retailers and T&L companies remain competitive by ensuring they are offering the same level or higher of delivery options and turnaround as other retailers across the borderless global marketplace.
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