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If there’s one thing the Amazon Prime model of business has taught us, it’s that convenience matters.
People don’t buy from Amazon just for the product mix; often sector specific or local marketplaces can offer more choice and competitive prices. What drives people back is the ability to get hold of a product within days or even hours of purchasing it.
Plus, they know exactly when the delivery is coming and can plan their day around it. Amazon keeps customers in the loop every step of the way. They can track the location of their package; from the number of drops before the driver reaches them to the van’s current location.
It is ultimate efficiency and transparency in delivery, and it works. Customers come back again, and again. No wonder then that Amazon’s shares have skyrocketed since lockdown measures came into effect, with a sudden surge in e-commerce sales.
Just as the quality of experience in a physical store is a huge part of customer satisfaction and can be a defining factor in brand preference, the quality of online delivery experience is just as important. Critically, this chance to differentiate is no longer the preserve of the big names; it is now within the grasp of all online retailers.
Online retailers have experienced rapid growth in the space of just three months as individuals of every generation turned to e-commerce in response to the challenges of the Coronavirus.
Companies have scrambled to meet the explosion in customer demand while having to manage disrupted supply chains and carriers unable to cope with the high spike in deliveries.
It has become clear, however, that while customers were initially patient during the peak of the pandemic crisis, the quality of the delivery experience has become an absolute paramount when it comes to repeat business and customer engagement.
The subscription-model pioneered by Amazon with Prime and now offered by growing numbers of larger retailers, such as ASOS with its Premier Delivery, has set a high bar – while also reinforcing the perception that consumers are still incentivised by free shipping.
As a result, cost remains an important consideration – 61% of British consumers abandon a shopping cart if they perceive the displayed delivery costs are too high.
How many online retailers, however, realise that there is far more to consider? Slow delivery, lack of delivery methods and a bad experience with a delivery company will also have an impact on conversion rates.
With new market entrants, including those taking bricks and mortar stores online in a bid to recoup lost high street sales, markets are becoming crowded. The quality of the customer experience is set to play an ever more important role in competitive differentiation.
Free delivery continues to drive conversions – and retailers will be pleased to discover that the majority of customers are willing to add more products to reach a minimum spend threshold to get free delivery.
The majority also want choice, including the option to pay for faster delivery and a specific time slot. 42% of UK customers are willing to pay more for next day delivery, yet nominated day delivery is only offered by a tiny proportion of online retailers, with just 20% of retailers offering expected delivery times at checkout.
One of the biggest barriers to providing this information to customers is the technical complexity of integrating carrier solutions into e-commerce platforms.
The majority of companies haven’t achieved this level of integration with a single carrier that is required to offer dynamic delivery pricing – only a handful are in a position to offer customers a choice of carriers.
Yet as the survey reveals, many customers have a preferred delivery company and the decision to purchase is strongly influenced by the carriers being used. Providing customers with a range of carriers to choose improves the range of delivery options available and improves customer engagement and loyalty.
Using the latest generation of all-in-one shipping platforms completely changes the model by providing retailers with optimised checkout, flexible delivery, fully automated order and returns processes and branded tracking.
To maximise the quality of the customer experience, delivery options can be changed dynamically, with pricing matched to the popularity of specific time slots. In addition, retailers can change the carrier options by product, in response to the carrier’s performance record if required, and even to the customer’s preference of delivery service.
Customer feedback is also important. As the Amazon Prime model has proved, customers love being kept in the loop. They want to know when a parcel has been shipped, they want to track its progress, and they want early warning if a delay is likely.
A simple text, email or WhatsApp message providing up to date delivery information increases engagement and satisfaction and drives repeat purchases. Following up after delivery with an automated tracking email asking the customer to rate the carrier’s performance is also a great way to ensure the retailer understands the customer experience at every stage of the process.
The information provided by this real-time tracking technology is transforming the way customers can control the delivery experience, and proactively contacting customers who have been or are likely to be affected by delivery problems is becoming a vital component of online customer service.
Real-time delivery communication increases the chance that the consumer is at home during the first delivery attempt. This is of course better for the environment, with the parcel delivery taking less transportation (so less CO2), increases customer satisfaction and is more efficient for the carrier.
In addition to providing flexibility for customers who cannot be at the delivery address as expected, live rerouting is a powerful tool for companies enduring delivery problems. Being able to apologise for the delay and offer customers their preferred alternative reinforces the quality of experience and avoids the negative perception associated with a delivery issue.
While customer expectation will compel online retailers to subsidise delivery, it is also important to recognise that customers are hugely influenced by choice, the quality of the delivery experience and the timeliness of communication.
For those online retailers still choosing their carrier partners based on price it is time to consider the true impact of the delivery experience. From initial conversion through engagement to repeat sales, the ability to offer multiple carrier options, diverse timings and real-time tracking is fast becoming a serious point of differentiation in a hugely crowded market.
Rob van den Heuvel, CEO at Sendcloud