The last few months in the e-retailing industry takes me back to an ancient Chinese proverb (or “curse” as some may refer to it) I use often, “May you always get what you wish for. May you live in interesting times”. For most in e-commerce this proved true overnight. Many websites crashed and some customers are still awaiting their deliveries 3 months later. What really happened? How could an opportunity to increase online business by 10 fold, be missed so easily?
The signs of e-retail growth was prophesied years ago, and although many companies were quick to embrace it, it wasn’t a priority until now. The blueprints were readily available, and global e-commerce giants such as Amazon and Alibaba were even teaching how to get there successfully. But when the customers were driven to your online store due to the recent pandemic, were you ready? Most weren’t.
The rules of online are truly simple; not easy, but simple. Customers have two moments of joy, the time they click the “Confirm” button and when they receive the package. Guiding them through this cycle is the challenge. Most e-retailers failed to focus on the second most important factor – delivery. 20% of the customers ranked on-time delivery as the second most important factor after price, which scored a mere 3% more. With the “Amazon effect” leading the way, the expectations of consumers are unprecedented. They want a seamless online shopping experience followed by a fast, accurate delivery. And this is no longer simply a desire—but a demand.
Customers now want multiple delivery options and the retailers who go beyond this expectation, will stand out among the competition. Most customers now select a retailer based on delivery choices offered and a positive delivery experience. Though e-retailing amounted to a fragmentation of the global retail industry, this is about to change. It is not too late to transform your business presence online.
Rethinking the way you deliver
Upon developing a great online experience, Amazon has now honed I their focus on delivery. From drone delivery to unmanned vehicles, the customer is now exposed to high level expectations. In China, Alibaba is evolving by acquiring multiple delivery services, and making physical shopping experiences seamless by introducing “click and buy”. These changes in the retail space are making customers demand delivery on convenience. They are no longer willing to stay at home for a package to arrive. Real time information on their delivery is important too. 47% of the customers have decided not to re-order online due to poor order transparency. In Asian markets Uber, Grab and FoodPanda give the status of your delivery order in real-time, and are now extending this service from food to retail. In a contactless world, embracing omni channel delivery is required to improve the customer’s experience.
The process can be streamlined by;
- Managing orders in a centralised system – online orders now come from multiple sources. Having a single system simplifies the execution of orders efficiently.
- Optimising tasks – review your operation from order picking, inventory management, packing and planning. Picking and deliveries should be done in well optimised routes, both internally and externally
- Scanning – this will give you visibility of your product from the point of inventory to the point of delivery to the customer. Providing the customer with order visibility will help them know the status of their order in real time, and reduce friction and calls to your customer care centre, as well as dissatisfaction on social media
- Providing proof of delivery – collecting a signature might not be sufficient anymore. Having proof of delivery can ensure that you are protected from delivery disputes, which can be significant for your business growth online
The challenges of retail
With the growing importance of impeccable delivery to gain customer loyalty, let’s look at some of the other challenges faced by retailers;
- Customer Service – implementing an efficient customer support software which can track your emails, calls and social media comments will ensure that you are in control of the experience. Have a clear customer service and return policy, coupled with strong data protection and privacy, which can help reduce the volume of unnecessary interaction, increase customer loyalty and reduce costs
- Loyalty – fighting for new customers is becoming more and more costly. Instead, offer customised loyalty based on habits and preferences by investing in data analytics. Exceptional service in your stores both online and offline is a must. For example, informing the delivery person that they will be giving a package to a VIP customer can help create a better customer experience. Keep in mind that loyal customers can account for more than half of your online purchases
- Make your touch points memorable! – As you are no longer serving your customers in a controlled store environment, it is important to ensure that the experience associated with your brand is provided remotely as well
Another big challenge in e-Retail is efficient cost management. A few simple changes, like the ones below, could see your business performing at a higher profit;
- Due to the growth of e-commerce, last mile delivery costs can escalate upto 30% as logistic companies need to scale up to cater to this new found demand. Future success will have to focus on brining the last mile delivery in-house partially at the very least
- Rethinking the cost structures from “retail to online” can be challenging. Increased demand for free delivery, coupled with escalating delivery costs, as well as investment in new technology require careful consideration and long term planning
- Increased space for order fulfilment – The physical space required for processing orders are much larger compared to over the counter sales. With the expansion of delivery, having region based delivery warehouses or logistic partners will play a key role in the speed of delivery, and can also help in the efficient management of product returns by customers.
To compete in today’s e-retailing era, it is vital to focus on a complete transformation from marketing, technology and frictionless customer experience, to efficiency in the total value chain. With the exponential growth of e-commerce in every area of retail—from gifts, luxury items, to groceries and beyond—giving your customers an exceptional shopping experience will make you stand out as a clear leader among your competition. Your customer should be at the heart of your operation. All optimisations should focus on bringing them a step closer to you, and ensuring they remain loyal in the long term.