Bobby Shome, director of business development EMEA at Centiro, reveals the three things that shoppers really want when it comes to delivery.
At the turn of the century, the physical retail store reigned supreme and the idea of buying products online was still a fairly alien concept to the majority of shoppers. Fast-forward to today and the landscape is quite different, with online retail sales in the UK expected to reach £67.38bn this year, and Amazon CEO Jeff Bezos is now the third wealthiest individual on the planet. As the stakes have been raised and online retail has become ever more important, the level of customer expectation has increased alongside it. As such, retailers must now perform at the top of their game, at all times.
This importance of having slick online operations is drilled home by the findings from this year’s JDA/Centiro Customer Pulse report. One of the key findings of the survey of over 2,000 UK consumers, was that a poor online experience would lead more than three-quarters (78%) of UK adults to switch to an alternative retailer when next shopping for products online. Despite this, we still see many of the traditional retailers chasing their tails when it comes to perfecting the online experience. With the pressure mounting on retailers, what can they do to give customers what they want? Here are three home truths the report highlighted:
- Poor delivery experiences damage retail reputations
This year’s report found that more than half (56%) of UK adults had experienced a problem with an online order in the last 12 months, 42% of which cited late delivery as their greatest bug-bear. The report also found that more than half (55%) of adults believe that the retailer should be responsible for resolving any issues surrounding deliveries. This implies that consumers ultimately blame retailers for a poor service, not their carriers, meaning that a poor delivery experience reflects badly on the retailer itself and its reputation can be left in tatters as a result.
These statistics highlight the importance of deliveries to the consumer, and there is definitely a lesson to be learned here for retailers. Having a state-of-the-art omnichannel platform may make life easier for the customer, but if your deliveries let you down, the experience is tainted.
This is a problem that is often exacerbated during peak times, such as the Christmas sales period that now runs for a series of months from November, right the way through to February. It is crucial that retailers have the right carriers on board to handle the influx of deliveries during these busy periods. This is where agility and flexibility are key for retailers, and having a selection of carriers that can be onboarded quickly, is crucial to this. If one carrier is overwhelmed with orders, another can simply come in at short notice to fulfil them.
- Not all customers are the same
This year, 40% of consumers surveyed said that cost was the most important factor when it comes to home delivery, followed by convenience (22%). A significant number (75%) of shoppers also stated that they would be willing to exceed a minimum order value to qualify for free delivery. These figures suggest that UK consumers are not all the same; while some strive for cost, others want convenience.
To be successful in this environment, retailers must be able to offer a multitude of delivery options. An effective delivery management system is essential to this as it can provide retailers with the necessary visibility into their carrier networks, meaning they can offer the delivery options consumers demand without breaking their order promise.
- A new approach is needed for returns
For retailers, there is no getting away from product returns: the research revealed that a third (33%) of UK adults who shop online return up to two non-grocery items a year, with a quarter of them (25%) returning three or more. Indeed, it is now common for many customers to speculatively order several items with the intention of returning the ones they did not want (17% according to the study).
However, it is possible for retailers to actually make the returns process a positive step in the customer experience journey. UK retailers should look to Germany for inspiration. The German retail market ranks among the highest for returns, with the rate of return being around 50% of ordered goods. Berlin-based Zalando is a great example of a company taking advantage of what many people view as a hindrance: the retailer took almost 70 million orders last year, and has gained popularity from its dynamic, wide range of returns initiatives such as same-day return pick-ups, a courier collecting any returns within an hour time frame, and a 100-day returns policy. Zalando manages to recoup the losses of costly returns by building a base of loyal customers through great service. This is a model that retailers in other regions should look to emulate.
Giving customers what they want
Clearly the rise of e-commerce is posing fresh challenges to the traditional retail business model. However, the gap is not unassailable if retailers address the concerns of customers highlighted in this year’s Customer Pulse report. They must offer a more dynamic delivery service, give their customers the wide array of choices that they desire, and begin to approach returns as an opportunity instead of a costly nuisance. By heeding these three home truths, retailers will be in the perfect position to give customers exactly what they want, and therefore stand a greater chance of long-term success.
Bobby Shome is director of business development EMEA at Centiro.
Image credit: Centiro and Fotolia