New research from Temando indicates that Australian retailers are technologically unprepared for the growing toll shipping is taking on their bottom line – as competition heats up between local retailers and the influx of international retailers like Amazon.
The State of Shipping in Commerce survey of 258 retailers and 1,279 online shoppers in Australia highlights how shipping has transformed from a “back end” issue to a front-and-centre selling point and key competitive advantage. But failure to innovate processes means retailers are falling behind growing demands for faster, cheaper and more seamless shipping experiences.
Carl Hartmann, co-founder and CEO of Temando, says that as the competition is heating up between local retailers and the coming of Amazon, there’s a golden opportunity to drive innovation faster on our shores.
“Smart retailers have their foot on the gas and are using the arrival as a huge opportunity to streamline their processes, optimise logistics and embrace digital transformation to put them in a prime position to not only survive, but thrive,” says Hartmann.
Consumer demand for seamless shipping to complete their online shopping experience is growing as up to 57% of shoppers will buy from competing stores when retailers fail to provide relevant shipping options to suit their needs.
“Shipping is sometimes overlooked in favour of marketing and packaging, but as we enter a post-Uber age, it isn’t just a “back end” issue anymore, but a front-and-centre priority to enrich customer experience and fuel growth,” says Hartmann.
Key findings include:
- 65% of consumers stated that they abandoned their cart due to the high cost of shipping, and 68% said they’ll shop more online for free shipping.
- A negative shipping experience is enough to put off 59% of customers from shopping with that retailer again, while 80% of shoppers will buy again if they enjoyed the shipping experience.
- In-demand shipping options that cater to convenience such as “specified time slot” (50%) and “weekend or after-hours” (44%), is currently offered by less than a quarter of retailers.
As the arrival Amazon promises to revolutionise the online market on a never-before-seen scale, smart retailers need to be embracing technologies that can help keep them in a position to survive and thrive.
- Over a third of retailers who expanded their shipping choices increased their sales
- 51% of retailers say technology platform compatibility is an issue, with 58% finding integrating carrier services into their systems a key challenge.
- 47% of retailers have challenges with shipping and fulfilment automation, yet only 29% are planning to invest in these issues in the next 12 months.
“We’ve found Australian shoppers react more strongly to shipping experiences compared to American shoppers. New alternatives to standard and express delivery has been largely unmet this year compared to 2016 which opens up enormous opportunity for retailers to re-imagine their retail operations and create meaningful, cost- effective customer experiences,” says Hartmann.
“Using smart technology to streamline processes will help to remove some of the key fulfilment challenges retailers are facing now and in the future. How businesses evolve with this changing landscape will influence how far their business grows, and how fast they scale.”
Rising consumer expectations linked to tech adoption
- The popularity of new food delivery services influenced 59% of high spenders who expect to have hyperlocal shipping as an option when shopping online.
- 23% of shoppers are using their mobile devices as their primary shopping tool, with Millennials being the highest adopters at 48%, while Gen Z sits at 29%.
- Access to a wide choice physical and online stores has given rise to two behaviours: webrooming (look online, buy in physical store) and showrooming (look in physical store, buy online) which is engaged by 65% and 51% of shoppers respectively.