Owning the consumer relationship: Meeting the expectations and needs of Australian shoppers

2016 Blackbay Online Delivery Report

Author: Andrew Nowell, Global Head of Sales and Marketing

Australian retailers and transportation companies face daily challenges around how to survive in the face of increasing competition, challenging business overheads and increasingly complex operating environments that have seen many common delivery processes change over recent years to meet the needs of the online shopping environment. And as global ecommerce giants like Amazon penetrate ever further into new markets and the growth of Uber-like technology grows, consumers’ delivery expectations are only set to increase.

Blackbay and MeeMeep recently teamed up with RedPlanet to develop the Online Delivery report, which shows that 29 per cent of Australian online shoppers are making an online purchase at least every two weeks, and amongst 35-44 year olds this proportion is 37 per cent, with clothing and footwear being the most popular items sold.

Importantly for retailers, the Online Delivery Report highlighted some distinct deficiencies with local delivery processes, offering insights where operations can be improved to support customer satisfaction.

Australians have grown accustomed to mediocre

Blackbay’s research reveals that despite just 17 per cent of respondents indicating that parcel deliveries are made to their expectation (i.e. on time and undamaged), overall 89 per cent are ‘satisfied’ with their delivery experience.

This conflicting statistic highlights there is confusion as to what makes a good delivery experience and that Australians have come to accept mediocre delivery experience as the ’norm’. However, with the online retail sector predicted to grow strongly in the coming years, it will be those local retailers and delivery organisations who improve their delivery services that will not only survive but thrive going forward.

In the eyes of consumers, 90 per cent of parcels are delivered to expectations (on time and undamaged) most or all of the time. The most commonly mentioned delivery problems were that no-one was home when the delivery was attempted or that it wasn’t at the specified time.

Alarmingly for local delivery organisations, 70 per cent of shopper’s suspect that rough handling by couriers was the main reason why items arrive damaged. To further compound online shopping delivery / pick-up issues, over a third of shoppers have however reported having to travel more than an hour to pick up an item which failed delivery and 41 per cent have had to wait between 4 hours and a day for their item to be delivered.

The consumer home delivery dilemma

The many challenges facing the industry are not, though, entirely the domain of the retailer and carrier. One of the key delivery dilemmas faced by retailers and their carriers across the globe is that consumers’ top preference is for a home delivery with the ability to sign for parcels on receipt, but research repeatedly shows that consumers will often not be at home when the delivery is made. In this research 85 per cent of respondents nominated their home as a usual delivery location yet 32 per cent say they are not normally home to receive deliveries. This compared to 25 per cent of people nominating their work and 9 per cent nominating a safe place as their preferred delivery location.

Subsequently the primary contributor to failed deliveries directly relates to the availability and predictability of consumer receivers, who unlike their business counterparts are not bound to the office address with specific hours of operation.

How can transport and logistics (T&L) providers rise to the challenge?

In the face of consumer confusion and increasing demands, carriers have to find ways of increasing their delivery flexibility and options to rise to the demands of consumers and ensure their competitiveness in the online retail marketplace.

They need to improve their rates of first time delivery, by introducing flexible, accurate and convenient delivery options. Consumers also expect retailers to offer more options for delivery and this can be choice of carrier, delivery option, time or location (safe place) or unattended deliveries –with the flexibility to change their mind.

As a baseline, free delivery is a must for 80 per cent of shoppers and two in five are seeking free returns as well. And where delivery payment is required, the majority of shoppers are not willing to pay more than $10 for a standard delivery.

          

Delivery windows was an option that appealed to over half of shoppers, with 30 per cent preferring a one-hour window and 50 per cent happy with a two-hour window. Interestingly, given consumer delivery cost concerns, 43 per cent of shoppers would be prepared to pay extra for a delivery window option.

Many online shoppers (40 per cent) have used and expect Click & Collect or similar services and are familiar with collecting parcels from the post office or parcel locker. Not being home to receive the delivery was the most common reason for collecting parcels from these delivery locations.

When it comes to returns, the quicker returns are collected and refunds issued the quicker the goods are re-sold and the quicker a consumer can buy replacement goods. In order to prioritise returns by making it trouble free for consumers to return goods, Australian retailers must be sure that consumers have access to the same collection options as those offered for delivery. More than half of shoppers consider the ease of initiating returns as very important. Most prefer to return items via Australia Post/Parcel Locker although 21 per cent have no preference.

Being positioned to communicate with online consumers via their preferred platform is also important. Email is the most popular channel for receiving pre-delivery alerts. 34-44 year olds are the most likely to be interested in receiving pre-delivery alerts via a smartphone app (31 per cent).

Improving the Delivery experience

As e-commerce continues to grow, the need to manage consumer expectations for parcel delivery becomes more critical than ever. Consumers will no longer accept long waiting times, inaccurate information and failed delivery attempts.

They are demanding flexible, transparent, quick services – essentially they want control of their deliveries on their terms.

Carriers therefore, need to discover ways to own the relationship and enable consumer control, before they lose out to the plethora of rising alternative delivery services in the market. Understanding the unique requirements of this converging market and the complexity, in comparison to previous delivery models geared towards business-to-business (B2B) deliveries, is vital to meet this new world of delivery.

About the Research

Blackbay joined forces with MeeMeep and RedPlanet to develop a report that looks at the trends shaping the Australian Delivery Market. In April, Blackbay utilising the services of Red Planet, conducted a comprehensive online survey of 1212 respondents that have made one or more purchases online in the past year.

Read the Home Delivery Report for further information.

About Blackbay

Blackbay is the leading provider of mobility enabled-solutions for the Transport and Logistics Industry. The Company’s configurable end-to-end mobile workforce management solutions ensure first time, on time, every time delivery. Connecting the shipper, operations, management, the driver and crucially the customer with real-time data and automated workflows to create smarter Delivery Companies. Visit www.blackbay.com to find out more.

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