Does your service match consumer expectations? Did you know a third of online shoppers bail if next day delivery isn’t on offer? Luke Condon talks turkey about delivery best practices and how to maximise your partnerships with logistics providers.
What the customer wants, they usually get. And if they don’t get, they move on. Equals lost customer, lost revenue, lost opportunity. When it comes to online shopping, and specifically the delivery experience customers want, the same principle holds true. So let’s look at what retailers can do to encourage consumers to reach the online checkout page and hit, ‘I agree’.
Give the people options
The recent PayPal mCommerce Index Report says just one third of Australian businesses offer next day delivery, while over half of Australian businesses either don’t offer, or have no plans to offer, next day delivery. This is in the context of 35% of online shoppers indicating they drop out of the purchase process because next day delivery is not offered.
Potentially, there is a simple solution/opportunity: consider giving consumers options. For example:
- Standard (or no-cost) delivery is 4-7 days
- Premium (this costs extra) is next day delivery in capital cities
In the short term at least, this is a differentiation tactic for the retailer. In the long term, once all retailers offer this arguably inevitable option, the differentiation is lost, but perhaps by then the reputation is so strong it won’t matter (especially in the context of social sharing of positive consumer reactions).
Embed the cost of delivery
We don’t need research to tell us price is king when it comes to shopping. So it seems logical that we can expect the price of delivery, or whether there is a cost for delivery at all, to massively impact on consumers’ willingness to consummate their purchase desire.
The solution, once again, is potentially simple. Retailers – like many other industries such as hospitality – could embed costs such as credit card transaction fees into the price of products and services:
- Option 1#: embed the cost of standard 4-7 day delivery into the product price. In the consumer’s eyes, this is free delivery. It’s differentiation
- Option 2#: premium, next day delivery, is an additional cost
- Option 3#: Your research will tell you this, but if you are selling a premium product, then of course you will be offering a premium experience. Shouldn’t that include free next day delivery, the price of which will of course be embedded into your product price?
- Option 4#: whether it is a premium or regular product, when a sale is worth over a certain benchmarked amount (let’s say, $300), then free next day delivery is once again embedded and, hence, offered
- Option 5#: another option, as much as we know consumers want their purchases delivered direct to their front door, is offering an alternative delivery point (e.g. depot, shopfront, service station etc). In many cases, this will help guarantee next day delivery – to a delivery point say within two kilometres of their home – which is ‘free’ to the consumer. As eCommerce evolves, consumers will probably learn to adapt to this option, but at the moment it is still very much an education piece for the retail and logistics industries to prosecute
An argument against this approach will be if we need to lift our prices because we are embedding all these delivery costs, then our products will be more expensive than our competitors. That’s a logical and fair point.
But let me remind you of this: you are currently losing 35% of your customers as they go through your online purchase process. 35%!
Perhaps it’s worth making a leap to retain those 35%, because I would imagine that equals a fair amount of revenue you would rather have your hands on. So it’s an issue worth considering in your approach to marketing.
It’s also worth noting its standard for many retailers to embed elements of the supply chain into a product’s cost, but often the logistical piece is not included. Why, I wonder, and isn’t this an opportunity?
If you’re not sure, you could trial the approaches outlined above, possibly for specific product lines to start with, trying different mixes and matches, and analyse what works best. Then you can apply your learnings to devise offers more likely to match the needs and wants of your customers.
Delivery partners: transparency is key
Clearly, when delivering to consumers, you need to have a logistics partner that can make good on your promises. And, equally clearly, both the retailer and the logistics partner are looking for a reasonable return on their investments.
What this means to the retailer is transparency between the two parties is critical. Where are the profits or potential losses for both coming from? What is the best way the retailer and logistics company can address the opportunities and challenges – together?
The two are symbiotic. Both will have their expertise, their capabilities and their insights. Working together – transparently, cooperatively – is imperative. If your logistics partner is not willing to ‘fess up to how they work, both financially and operationally, then perhaps you might reconsider the value that relationship really offers you.
Operational insights and POD
One value-add any good logistics company will offer is advice on how to execute the back-end operations, to ensure promises to the consumer can be fulfilled from a delivery perspective, next day delivery or not. With next day, of course, the pressure is on to get the process 100% right. There is no wriggle room.
This comes back to the partnership and relationship. The two partners need to work hand in glove, or the outcomes will inevitably be less than outstanding.
Can your logistics partner help you with your business? Wouldn’t you expect any good partner to do just that – truly partner?