Customer retention is a bigger issue now than ever before for retailers, as consumers have an increasing amount of variety and choice when it comes to where they make their purchases – particularly online. It is estimated that globally there are a total of 26 million ecommerce stores – a figure that grows by the day, as sites continue to be set up. While competition is fierce, a key area has been identified as to what makes a customer loyal – their delivery experience.
Many shoppers have opted for the permanent switch to ecommerce rather than physical shopping since the beginning of the pandemic, and a key reason behind this is the convenience associated with delivery. Rather than making the journey to the high streets or the nearest shopping centre, the idea that the desired products will be brought straight to the customer’s door is appealing – but only when done correctly.
The decision to order a product online rather than having it in hand at the time of purchase is built on a foundation of trust between the customer and the retailer. This trust is based on the premise that their purchase will arrive to them in a manner that is timely, secure and accurate. If the customer does not believe that the retailer can fulfil this promise as set out, they will either return to physical stores or look elsewhere for a retailer that can fulfil their delivery expectations.
Recent studies from the US have shown that 39% of customers will not return to a retailer if they have had a negative delivery experience. The main contributors to this result were said to be poor communication and delays in the delivery service. In Europe, results were even more concerning for retailers. A huge 85% of shoppers would discontinue their loyalty to a store that gave them a poor delivery experience, based on a study conducted by Ipsos and Octopia. with thousands of European consumers. Other statistics show that 94% of shoppers blame the retailer when a delivery doesn’t go to plan, 77% of negative online reviews are about bad post-purchase service.
In the not so distant past, it was standard for retailers to only offer one delivery option, be that up to a week for your parcel to arrive. However, things have changed and with demands shifting, retailers have had to adapt. From the get-go, retailers should be offering delivery options and choices for their customers that will fit with their needs and expectations best, limiting disappointment at the end of the experience. It is crucial to have a safe amount of choices – not so many that it will overwhelm the customer and cause them to switch tabs, but not so few that they will abandon their cart due to their desired option not being available.
On average in the UK, three delivery options are available, which is seen to be the ideal number for many. The three main delivery options available tend to be standard, next-day delivery, or the increasingly popular click and collect. As things return to normal and shoppers return to the office and are out and about a bit more, the flexibility to order something online and then collect it in store, without the concern that this will be dropped off to the wrong address or lost in transit, has become very suitable for consumers. Retailers should utilise this flexible model.
Not only should there be a variety of options, it is even important that these align with the values of your company. For businesses that are pushing to be viewed as sustainable and green, the offering of next-day delivery may not be suitable, due to the environmental impact this has when compared to standard delivery. If it is available, it could be worth noting the environmental trade-off on your offerings to encourage consumers to select the option that better aligns with the beliefs of the business.
Now more so than ever, due to the unfortunate and unpredictable issues occurring in supply chains both globally and within the UK, delays are inevitable. While delays may be out of the retailer’s control, how the delays are dealt with and communicated to the customer is where you can lose or retain the buyer. Transparency is key, utilising the tools one has to relay this message, such as SMS or email, should be done in a manner that is clear. Recent research from the UK finds that retailers who offer online discount codes for delayed orders have a 30% higher chance of that customer returning compared to stores who do not offer apology incentives.
There is tech and processes on hand for retailers to use in order to make sure efficiencies are smooth, timely, and relevant. Data can play a huge role at all stages of the delivery experience, from telling you exactly what the customer wants for delivery, how much contact and communication is most effective, and what improvement steps you should take to increase customer satisfaction. This can all be achieved through the collection of customer feedback, post-purchase and post-delivery.
Real-time visibility from the moment the order is placed, packaged and delivered is crucial. It creates a sense of security for the customer and the transparency that is desired in the delivery process. The journey should be seamless for buyer, seller, courier, and all other stakeholders – and tech aids in ensuring this.
It all comes down to a mix of communication and data because knowing what your customer base wants and needs, as well as the ability to react if something goes awry, is essential. Large numbers of consumers will turn their back on a retailer after just one bad experience, so it is important to know the risks, but also how to combat them.
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Fergal O’Carroll is the chief revenue officer at delivery management company, Scurri, with responsibility for sales strategy and execution.
His prior roles include EMEA vice-president for commercial sales with Teradata for eight years; prior to that, he was managing director of business intelligence solutions with Avnet Client Solutions for 13 years.
Fergal holds a BA in Business Studies from the University of West London and is a native of Dublin, Ireland.
