The pandemic has impacted ecommerce in multiple ways. It has accelerated ecommerce growth by years and changed consumer buying behaviour—in many cases, permanently. Yet, it also constrained delivery capacity and, most importantly, impacted ecommerce delivery performance.
In mid-January 2022, Descartes, in conjunction with SAPIO Research, conducted a study of 8,000 consumers across ten countries in Europe and North America to understand their perception of online buying and home delivery. The study shows that, while consumers may be buying more, they’re not thrilled with today’s inconsistent ecommerce delivery performance and a significant number are ready to punish poor performing retailers, as Chris Jones – EVP Industry and Services, Descartes Systems Group, explores.
Consumer Commitment
Consumers bought more online during the pandemic. Descartes’ study shows that the proportion of all purchases made online and delivered increased from 35% pre-pandemic to 46% in early 2022. This trend looks set to continue as respondents indicated they intend to increase their percentage of online purchase and home delivery to 48%, even as COVID-related restrictions ease.
While the increase in online buying and delivery is good news for online sellers, the bad news is that only 34% of respondents cited that delivery processes have improved. Given the very uneven ecommerce delivery performance during the early stages of the pandemic, this shows that many retailers have not made any significant progress in this important part of the overall customer experience. “The last mile is the last word” for consumers—and what they remember.
Mixed Ecommerce Delivery Performance
If every retailer’s goal is to delight customers, it’s not happening in home delivery. Overall consumer satisfaction with delivery performance was mediocre, with white goods receiving the highest “extremely satisfied” rating (52%), closely followed by clothing and footwear (51%). At the bottom of the satisfaction ratings were medicines (40%) and furniture (33%).
What’s interesting about how consumers rated delivery service satisfaction is that the previously mentioned goods have common delivery methods (e.g., white glove and parcel), but a wide disparity in performance. This points to all delivery modes having issues; yet some segments of the market have better recognition of the importance of home delivery performance and, hence, results.
The elements of the delivery process that matter most to consumers are cost and security (74% quite/extremely important), which tied for the top response. Ease of ordering and booking the delivery and cost and ease of handling returns closely followed and were tied (69% quite/extremely important). Tracking delivery progress was also close (68% quite/extremely important).
Satisfaction with specific delivery elements was slightly different. Receiving proof of delivery (POD) and ease of ordering and booking delivery were tied for elements of the delivery process with the most satisfaction (74% quite/extremely important). Tracking delivery progress was third (73% quite/extremely important). Environmental performance of the delivery was next (71% quite/extremely important). Cost and COVID safety of delivery followed and were tied (70% quite/extremely important). While retailers have made significant progress in electronically engaging customers, there is a lot of disparity in retailer capability. Consumer expectations are growing in this area so retailers who can improve electronic engagement stand a good chance of improving consumer perception of their brand and loyalty.
The most compelling evidence of the delivery performance challenges retailers are facing lies in consumer responses to the delivery problems they experienced over the last three months of 2021. Almost three-quarters (73%) of respondents indicated that they experienced a delivery problem in that timeframe (see Figure 1). The top three problems were all related to timeliness. Retailers need to not only assess their ecommerce delivery performance, but also the expectations they set for customers in terms of delivery speed and precision.
Figure 1: Consumer Delivery Experience the Last 3 Months of 2021
Source: Descartes and SAPIO Research
Consumer Fatigue
Consumers are fatigued and a fair number of them are taking action. For respondents who indicated they had a bad outcome from a delivery issue, their top response was losing trust in the delivery company (24%). Retailer-related negative effects were second, with the result being that consumers did not order from the retailer again (23%) and third, with lost trust in the retailer (21%).
Retailers were also impacted by delivery company reputation, with consumers citing they would avoid retailers that used a problem delivery company (18%). Moreover, the loss of future business and reputational damage can go well beyond the individual actions of respondents who told friends/family to avoid the retailer (16%). While it is a lower number, the potential for individuals to negatively influence many more people, especially through social media, makes the consequences of poor delivery more damaging. Since the cost of customer acquisition online is so high, a premium should be placed on consistent ecommerce delivery performance to keep customers for life.
Conclusion
Retailers and their delivery partners cannot afford to ignore, even underestimate, the importance of home delivery as a critical factor underpinning continued ecommerce success. They need to improve performance or risk losing customers to competitors who do. Rather than seeing this as another challenge for the business, retailers and logistics companies should use it as an opportunity to capture market share and more ecommerce business as consumers continue to increase their online purchases and deliveries.
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.
