The rise in ecommerce exceeded all pre-pandemic predictions. Yet while consumer shopping behaviour has changed for good, the quality of the online customer experience is far from satisfactory.
Research conducted by Descartes revealed that two-thirds of consumers experienced a problem with home delivery in a three month period. Retailers urgently need a customer experience delivery check: okay is simply no longer good enough in the new battle for ecommerce spend.
As Andrew Tavener, Head of Marketing, Descartes, explores, the quality of the experience today is multi-faceted and complex – and retailers need to rapidly understand how to respond.
No Going Back
Customer behaviour has changed for good. While many retailers have been expecting a dip in online activity as individuals gain confidence to return to shopping malls and high streets, internationally, the data suggests otherwise: customers actually plan to increase their ecommerce spend.
According to the U.S. Census Bureau statistics, ecommerce sales as a per cent of overall retail sales have been steadily increasing and are expected to continue to do so. Similarly, in the UK, it is predicted that ecommerce revenue is set to grow at a CAGR of 3.47% between 2021-2025.
This shift in behaviour has significant ramifications for corporate strategy and customer engagement.
Compromised Customer Experience Promises
With ecommerce now dominating retail sales and competition for consumer spend at an all-time high, it is vital that retailers are able to identify and address any issues or concerns that may prevent consumer purchase. Indeed, research conducted by Descartes in the summer of 2021 revealed that over two thirds (68%) had experienced an issue with delivery in a three month period – and, as a result, 24% lost trust in a delivery company and 24% lost trust in the retailer.
This is compounded by recent data from RetailX, which found that many of the UK’s Top500 retailers significantly reduced their delivery promises during the pandemic as a result of both supply chain and driver shortage issues. Fewer than half (46%) of Top500 retailers now offer next-day delivery – nine percentage points (pp) lower than the previous year. Fewer still offer nominated day (-3pp to 9%). Moreover, in the run-up to Christmas 2021, delivery promises were reined in even more, with final order dates earlier than previous years and next-day delivery even more restricted or removed completely.
With Descartes’ research highlighting that timing is the biggest issue for consumers when it comes to the home delivery experience, a failure to meet expectations will have a long-lasting impact on customer perception and loyalty.
Increasing Complexity
Yes, it is impossible to ignore the capacity issues in the carrier market that are creating huge challenges. However, the additional complexity is that customer expectations of the experience continue to rise – and that the criteria for a good experience are increasingly variable.
While home delivery timing is a critical factor, it is far from the only one. Cost of delivery; security; ease of ordering; the cost and ease of handling returns; and delivery tracking all play a role in the delivery experience. And these priorities vary depending on the type and value of goods on order.
Finally, retailers must take into account the changing perception about the environmental impact of home delivery. As Descartes’ research found, 71% of European consumers consider the environment when making an online order and almost a third are interested in bulking all orders to one weekly delivery in a bid for sustainability.
Customer Experience: From Challenge to Opportunity
The challenge for retailers is to regain and retain control over the experience. All retailers need to consider what customers now expect as standard and then build on that delivery experience to meet specific needs.
Retailers can also benefit from a mindset shift: understanding the importance of the various factors that constitute a good delivery experience is not a customer service burden. On the contrary, it presents a real opportunity. Proof of delivery can be used to minimise disputes, while best in class retailers are now using tracking communication to build greater customer engagement, adding product recommendations that are complementary to the current order to drive up cross- and upselling opportunities.
Consumers’ growing green expectations are also a chance for retailers to excel. Most will already have a sustainability strategy – but how well is that message shared with customers? Does it incorporate the delivery model?
Offering customers environmentally friendly delivery options, with the ability to nudge customers in that direction with enticing pricing – such as a free delivery slot if the driver will already be in that street or area – can now readily be achieved using effective scheduling and routing. Moreover, this enables retailers to both meet customer expectations and optimise the delivery process in a way that actually drives down costs.
Conclusion
Retailers cannot afford to downgrade delivery. It is now a fundamental component of the complete, end to end ecommerce experience. It can make or break customer perception and customer loyalty.
Embracing a more nuanced approach, offering customers a range of delivery choices that reflect their preferences – cost, convenience, timing or environmental factors – provides a very definite opportunity to positively differentiate the customer experience and take the high ground in the new ecommerce frontier.
Andrew is Head of Marketing at Descartes Systems UK Ltd and has over twenty years’ business-to-business senior marketing management experience with high technology solutions (hardware, software and services) in complex business-to-business markets that includes logistics and transport with organisations such as Intel, Securicor, Unipart Technology Logistics and Orange.
