After a turbulent period, recent ONS data shows that online sales are growing steadily in the longer term hitting 30% of the UK’s total retail figures again in the UK in November 2022.
That’s not to say e-commerce retailers can rest on their laurels; the impact of the cost-of-living crisis and continued high inflation means consumers are even more cautious when it comes to spending. However, with experts also predicting that online sales will grow by a further 10.4% in 2023, there’s opportunity for the taking where retail brands can focus on building customer loyalty and adding value to the consumer experience to encourage repeat purchasing in a competitive marketplace.
Here, Andrew Turner, Chief Sales Officer at international fulfilment services provider, fulfilmentcrowd, explores the e-commerce landscape and how retailers can seize the opportunities presented by the current market conditions.
Meeting consumer expectations
The ‘Amazon effect’ refers to the disruption to conventional physical retail caused by the increase in online shopping. One of the major factors of the movement in recent years has been the impact on consumer expectations.
Shoppers can buy an item and receive it within hours. They can track their purchase from payment to delivery and receive instant updates about the status of an order and its delivery journey. As a result, they expect an intuitive, interactive and seamless experience – shopping items globally from the palm of their hand, paying with the touch of a fingerprint and, most importantly, receiving products in good time.
To ensure these expectations are met, e-commerce brands must deliver a seamless customer experience. This includes everything from offering different shipping and payment options, as well as multi-platform hassle-free checkout processes and simple returns processes that are cohesive across all sales channels.
Increasing customer loyalty
According to CommerceNext’s 2022 report, around two thirds of direct-to-consumer businesses cited increasing customer acquisition costs as their greatest challenge in 2022. When you consider that more than a quarter of shoppers ditched a brand for a competitor in the past year, losing customers is getting ever more costly.
Expensive customer acquisition and increased potential churn highlights the importance of customer loyalty. Loyal customers don’t just buy regularly, they recommend brands to others and by delivering a customer experience that keeps shoppers engaged, retailers can automatically reduce customer acquisition costs by building a group of advocates who’ll do some of the acquiring for them.
There are multiple ways to boost loyalty – great customer service, loyalty programmes or affiliating with a good cause are just a starting point. And put simply, the easier you make it for a customer to purchase and receive your products, the more likely they are to return and point others in your direction.
Retailers should also look to increase efforts to customise the consumer journey, which we’ve seen first-hand at fulfilmentcrowd contributes considerably to building brand loyalty and repeat purchasing.
For example, brands are opting to invest in custom packaging to ensure a premium experience for end consumers. Deploying an increased budget to already engaged customers is proving a lucrative move, especially for e-commerce businesses that have a built a strong brand and established audiences.
Achieving international growth
Cross-border trade presents businesses with fresh opportunities to scale by expanding into previously untapped markets. However, faced with rising fuel costs, increasing carrier charges and the complexities of Brexit, many independent e-commerce retailers have ruled out the possibility of overseas growth, yet this needn’t be the case.
From 2018 to date, fulfilmentcrowd has seen a 77% reduction in cross border consignments being shipped from the UK to the EU, which suggests that brands are locating more stock in-country. Savvy e-commerce retailers are now exploring alternative routes to market, such as leveraging third-party sales channels like Amazon and their FBA programme or eliminating Brexit red tape by splitting their inventory across multiple counties to service a strong network of end-market locations across the UK and EU, as well as further afield.
There are many different routes to starting or returning to trading internationally. With a smart fulfilment strategy that includes ease of trade and more cost-effective shipping rates, businesses can split their inventory and operate with a network of international warehouses instead of a single distribution centre. The right fulfilment partner can streamline shipments, reduce the risk of lost merchandise and lower costs, driving long term revenue and growth for retailers.
Another key expectation of the consumer in 2023 is to be able to shop their favourite brands across multitude of platforms. The retail landscape is becoming a ‘multi-everything’ world, with the lines between traditional bricks mortar retail and e-commerce becoming increasingly blurred.
Digital-first brands are starting to diversify their reach into bricks and mortar with pop-up shops, seasonal ranges in third party stockists and entry level ranges in established retail chains becoming more even more prevalent in recent months.
In contrast, traditional high street chains are investing heavily in their e-commerce channels, selling direct to consumer and creating third party selling platforms for stocked and emerging brands.
By committing to an omnichannel strategy, brands can diversify reach and expand their presence across different channels – communicating with audiences they may have previously failed to resonate with and penetrating new markets by utilising the footprint of already established partners to drive brand awareness and consumer buy-in.
Consumers should not only be able to shop across different channels but do so seamlessly, without experiencing technical hiccups or inconsistencies in service, product availability, pricing and shipping options. Complex technical integrations are key and retailers hoping to maximise on the omnichannel should seek a fulfilment partner that plugs straight into apps such as Shopify, TikTok and Amazon.
Insider Intelligence data tells us that 20.8% of retail purchases are expected to take place online this year and the global e-commerce market is expected to total $6.3 trillion. By exploring the opportunities available to them and investing in growth channels now, retailers can not only capitalise on the remainder of 2023 but future-proof operations for a successful 2024 and beyond.
To find out more about fulfimentcrowd’s services, visit the team at stand WL1253 at this year’s White Label Expo in London (28 February – 1 March 2023).