Seventy percent of Australian online shoppers say they would likely switch to an alternative retailer if they had a poor experience with shopping for an item online, according to a new report from JDA Software Group.
This is a rather alarming figure at a time when most retailers are consolidating their bricks and mortar stores and continuing to invest in their online presence.
Of those who responded to the JDA/Centiro Customer Pulse 2017 Report. who had experienced a problem when making a purchase online in the last 12 months, 50% of respondents had experienced late delivery, 41% had missed a delivery despite being at home, 28% never received an item, while 23% received incorrect items.
This was the second highest level of intolerance from the various country-specific surveys JDA has conducted, with only the UK (78%) having less tolerant shoppers. Consumers are clearly most sensitive to online experiences, which suggests this is an area that retailers need to give specific attention to as they develop new ways to engage with the customer.
Click-and-collect on an upward curve
The maturity of the Australian online market has fuelled a high level of click-and-collect usage, with 47% of shoppers who have made a purchase online in the last 12 months, having used this service. The increased adoption by shoppers reflects their growing appetite for convenience and cost-efficient online buying. The survey shows the key drivers for click-and-collect use are avoiding delivery charges (45%), convenience (37%), while 26% indicated it gave them greater confidence of receiving items compared with home delivery.
However, with such a focus on click-and-collect, it’s disappointing that as many as 68% of Australian click-and-collect shoppers have encountered an issue over the past year. For those Australians who have encountered a problem, some of the major issues were long waiting times, in-store staff being unable to locate items, and no dedicated click-and-collect area in-store.
As the data shows, Australian retailers are facing several challenges when it comes to online customer experiences. Fulfilment and last mile issues continue to hinder retailers efforts at a time when consumers are becoming increasingly intolerant of poor service.
With retailers competing more aggressively than ever before for sales and offering an increasing array of fulfillment options, delivering high service levels efficiently and profitably remains a challenge for many retailers, yet is expected by todays shoppers, across all channels.
“Retailers that fail to keep up with demand put themselves in serious danger of being left behind,” according to Patrick Viney, vice president of industry strategy and retail of APAC at JDA. ”However, encouragingly for retailers, it does appear their continuing investments in click-and-collect are starting to pay off.”
“Adding to that, 41 percent of shoppers expect the shop to be their most popular channel, so it is clear that stores are not going to be disappearing any time soon. The physical store in Australia remains vitally important to domestic retailers that are fighting the challenge presented by overseas online retailers.”
The growth in click-and-collect for retailers does require a re-think in the fulfilment methods currently used in-store and alternative methods to pick online orders more efficiently and accurately. Picking and packing is only part of the solution.
Capturing and delivering accurate and timely information to customers is important when providing a memorable shopping experience. Retailers need to build flexibility and resilience in their e-commerce model, incorporating intuitive technologies that allow their staff to easily deal with higher order volumes, accurate order picks, packed, placed, and ready for convenient pick-up.
There will also be challenges managing product returns due to exchanges and damaged goods. Existing technology developments and exciting new picking technologies will help enhance their customers online experience, according to Honeywell.
Acceptance for minimum order thresholds
An overwhelming majority (83%) of respondents indicated they would be happy to exceed minimum order values in order to ensure they can enjoy free delivery.
As online retail continues to be competitive, the winners will be those retailers that can offer a reliable and convenient fulfilment service to consumers, rather than simply focusing on speed and price. At the same time, escalating costs, as well as mounting competition is putting pressure on retailers already squeezed margins.
“Retailers must think hard about the configuration of their supply chains, and will need to become much smarter about how they use their key assets of staff, stores and inventory to fulfil customer requests intelligently. They need to think smart finding the perfect balance between cost-effectiveness and a great customer experience,” added Viney.
The survey was commissioned by JDA. Total sample sizes in Australia were 1,044 adults. Fieldwork was undertaken between December 2016 and March 2017. The survey was carried out online. The figures have been weighted and are representative of all adults in each market (aged 18+). While this is the first survey for Australia, JDA is in its third year for customer pulse surveys commissioned for UK, France, Germany, Sweden, China, and Japan.