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Performance area reviews: Operations and Logistics

As we have seen earlier in the report effective CRO is about bringing the whole of the organisation and the whole of a company’s operations on board to ensure the process is as smooth as possible across the business.

Operational cohesiveness is key and, as examined in the report earlier, relies on companies leading CRO operations from the top.

At tiles retailer Walls and Floors web development manager Tom Murrell says it’s a key element of his business. “We’ve involved more people and more departments to raise awareness about CRO.” He says it’s important people in the business see the impact of everything that they do on conversion rate.

“For example, if a sample order arrives late, that impacts conversion rate – that involves the warehouse, sample and transport teams. It’s led to optimisation happening throughout the business,” he says.

Similar is true at Majestic Wine where online optimisation manager Stephen Green says that making the concept of optimisation accessible to colleagues means that people in other parts of the business can also adopt the same mind-set. “This is increasingly important within multi-channel businesses as we see internal structures change to offer customers the highest flexibility and service possible. Whilst structures vary greatly from business to business, it has never been easier to coordinate and work with colleagues across the business. With business systems and analytics tools spanning departments now is the time to start looking at optimisation holistically,” he says.

At NotOnTheHighStreet the company set up a dedicated optimisation lead at the beginning of 2014 to ensure CRO was top of mind throughout the organisation. “The key role of this was to increase our test and learn activities across all our devices and maximise the spend on our optimisation toolset,” says Ollie Scheers, optimisation manager at the retailer. “We have an optimisation roadmap that covers a variety of tests that answer specific business questions from different teams across the business,” he says.

Beyond the organisational structure of a company there are two further bugbears that can hinder conversion and affect the stickiness of a conversion that can be the hardest of all. Retailers cite the fact that there are some barriers to sales conversion that can be real deal breakers such as delivery costs and the returns proposition.

At heritage clothing retailer Country marketing director Jenny Parker says the company recognised early on the importance of delivery costs as a potential barrier to conversion and scrapped them as a result. “One of the primary things we considered way back in 2005 was shipping costs. We made the decision to be one of the first offering free worldwide shipping to our customers because we felt there were bigger benefits from offering that as a service. It’s expensive acquiring traffic so we want to ensure we maximise each user visit to its maximum and that was a quick user win for us,” she says.

Our Top 500 research showed that customers abandon shopping journeys when delivery costs aren’t stated at the outset but equally it seems that they aren’t willing to understand the challenges that retailers face surrounding delivery.

Rob Wood, online trading manager at The Entertainer, says that when the company introduced click and collect it tried to aid the customer journey – and therefore boost conversion – by being able to tell the customer upfront if a product was in stock in their local store simply be obtaining their postcode earlier in the customer journey.

The reality of customer’s behaviour however was a lot different to what was expected. “We found that our customers weren’t happy to do that journey – they wanted to look at products and then tell you the postcode because they expect goods to be where they are and you have to have a good way of explaining it to them if it’s not where they think it is,” he says.

Nevertheless click and collect is an area that many retailers – including the likes of Paperchase – are investing heavily in to boost conversion. In the Top500 report footwear retailer Schuh led the Elite category in this group thanks to the numerous delivery options that it offers – including its own click and collect within an hour process. It is something that many retailers are embracing.

And, in the final part of the logistics journey is returns – since a conversion means nothing if it simply leads to higher returns and a good returns process is crucial to a customer coming back in the future. Since the aim is to retain a lifelong customer rather than simply achieve a one-off sale retailers must work hard to ensure they optimise every step of their operational and logistical process – with customer service agents who can track deliveries and the ability to take advantage of a multitude of convenient delivery options – from tracked or timeslot deliveries to easy, hassle free returns.

At Danish retailer Stylepit former CMO Simon Saneback said the company has tested a rather novel approach of reducing the impact of returns and ensuring they convert instead back into a sale. It is a process than even instore retailers often overlook since the assistant is more intent on managing a fast, easy return rather than necessarily encouraging another sale. “In certain countries we are testing online returns where we are trying to keep customers’ money by advising customers of similar products in similar sizes and giving them a credit,” he says. And in some cases this goes beyond the norm. “If we see it’s a trustworthy customer in some markets we will send a new item before they have returned the old one. You would get as positive a customer as ever. I would rather have lower conversion rate but lower returns rate and a higher order value as it’s a higher ROI,” he says.

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