Bobbie Ttooulis, group marketing director, GFS looks at how 2022 has lived up to its promise of being a challenging year for delivery operations. Instead of waiting for the winding tunnel of complexities to end, what can ecommerce businesses do to sharpen and get ‘creative’ with delivery management in today’s climate?
Swallowing the pill of perils
The current economic and political landscape is riddled with challenges that take a straight hit at delivery and logistics. The year started with a rollover from the post-pandemic impact, and while the boom in eCommerce sales that came through during Covid-19 brought good news, the supply chain gaps and, operational complexities only continued to grow. Then came the war in Ukraine that continues to have a severely destabilising effect on the UK’s supply chain and logistics.
Other factors that continue to take a hit are the significant rise in operational costs across domestic and international road freight rates. And while costs of shipping containerised freight from China have come down recently, they remain significantly high. The index which amounted to about 1,100 points in January 2019, reached a value of almost 4,000 points in September 2022.1 And despite elevated costs, shipments are unreliable with increased lead times.
Other glaring factors that have catalysed the challenges are the long-standing issue of labour shortage since Brexit, increased fuel surcharges, and overall “deflated” consumer confidence from the cost-of-living crisis that have all collectively inflated the operational cost base.
Breaking the barricade
As the challenges continue stacking up for ecommerce businesses, how can they protect costs, create resilience, and build the agility to pivot shipping operations, at the same time enhancing customer experience?
Planning for contingency
The ongoing crisis does make it seem impossible to forecast, and bombshells like postal strikes can have a paralysing impact on businesses reliant on one single delivery service. The key is a rock-solid contingency plan charted out jointly with a carrier partner that knocks down issues as soon as they surface.
Operations expert and industry thought leader Steve Davies says, “I’ve worked with many couriers in my career, they all do a fantastic job but when you work with someone like GFS who’s a multi-carrier solution, they have a different mindset. They’re looking at what’s out there on the market from a more tactical and strategic point. What I found with GFS is that it’s a very different relationship that isn’t based on trying to keep you within a courier but actually trying to deliver the right service.”
Communication and clarity
Most ecommerce giants are in a race to beat competitors to the customer’s doorstep, but many miss the point — these customers expect clarity. The minute a purchase is made, a buyer expects visibility on the parcel status, so proactively offering them that trackability is always critical — not just during delays and disruptions. According to the Ipsos-Octopia study in 2022, 85% of online shoppers say that a poor delivery experience would prevent them from ordering from that online retailer again.
The power of ‘smart’ choice
If creatively executed, offering choice to customers at checkout can be a win-win. When Hampers.com found their operational costs rising, they worked with GFS to switch from a premium carrier to an economic carrier for their free delivery service. At the same time, they introduced a pricing model that still offers premium delivery service at a cost.
Offering a wide choice of delivery options means you can satisfy the diverse preferences and profiles of your customers. The rise of the ‘eco-conscious buyer’ cannot be ignored, but retailers can start simple — click and collect, parcel lockers, carrier partners with electric vans for final-mile delivery. These are easily accessible solutions that ‘won’t cost the earth’.
On the one hand, making ‘smart’ choices in your delivery mix allows you to pass choice of delivery option and cost to customers and, offset spiralling costs on the other – it’s a win, win.
Resetting from bad patterns
Ecommerce merchants need to reset expectations and get smarter around returns. Big players in apparel and fashion have pulled the plug on free returns, and surprisingly (or not) digital buyers aren’t pinching their pockets on this. In fact, 50% of UK adults are of the opinion that it’s the customer’s responsibility to pay for shipping charges while making online returns2. We need to give shoppers more credit when it comes to their willingness to pay and share the burden of cost with the consumer.
While many might laugh off growth in a recession-bound market, the fact is a lower GBP makes UK exports more attractive. This is probably the best time to put to the floor any plans for international expansion and establishing online marketplace presence. But this could fall flat unless backed with the partnership of a robust delivery partner with strong local knowledge, multi-carrier connection in international lanes, and well-established marketplace integrations.
Driving delivery through disruption
If the past 2+ years have taught us anything it’s that 1. eCommerce delivery can no longer rely on a single-carrier approach. Working with a single multi-carrier partner brings to the table agility and contingency to that is the need of the hour (and for a long time to come) to offer flexibility, visibility and choice that protects the customer’s delivery experience without putting a big dent on bottom lines. 2. There’s no escaping automation technology. It is imperative that manual processes be automated by leveraging eCommerce technology to reduce reliance on labour and contain operational costs. Ultimately, keeping the dialogue open to approach delivery differently is what will protect the customer experience and drive delivery despite disruption.
“GFS has helped transform our delivery strategy and drive 50% growth in online revenues by enabling us to increase operational efficiencies and give customers the choice and service they expect from us, every time.” – Wilko
“Sales volume forecasting is almost impossible for us, but with the flexibility of GFS’ solution, we can satisfy demand even during our busiest periods.” – Hampers.com
“GFS gives us the tools, delivery services and prices we need to offer customers the widest choice of delivery options at the checkout and quickly add, remove or change them as we need. As a result, we’ve seen cart abandonment rates dramatically reduce and customer satisfaction scores go up.” – Mamas & Papas
1 and 2 Statista
Bobbie Ttooulis, Group Marketing Director, GFS