The Best Online Retailers are Using Deliveries as a Sales Multiplier

By Andy Powell | 24 Jul 2014

Andy Powell explains the three barriers the best online retailers must overcome to sell their deliveries service offering.

No-one ever launched an online retail business or a new digital retail channel because they thought order fulfilment was sexy.

That being said, if I’ve learned anything from the recent Online Retailer Conference, it’s that those who are succeeding with order fulfilment are trying their hardest to make it one of the most attractive element of their customer service offering.

As Adam Jacobs, Managing Director and Co-founder of The Iconic said in his presentation on the topic: “Once a customer experiences our three-hour delivery service, they believe The Iconic can do anything”.

That thinking can also be extended to include The Iconic’s new returns depot, which makes good use of the ParcelPoint parcel network. These new retail concepts are beginning to sprout from many corners of our industry, and for that, the customer can rejoice.

Why Consumers Get ‘Turned On’ by Slick Fulfilment

Yesteryear’s school of thought (which may still be highly prevalent among the slow movers of today), was that fulfilment is necessary, but dull. It was simply something a retailer should do in order to meet customer demand. It was also something that was very much thought of as ‘after the fact’ in the purchasing process.

As a result, retailers concentrated on engaging content, great search and using merchandising to drive a rich digital experience. Under this paradigm we saw shipping and returns relegated – quite literally – to footnote status in the UI hierarchy.

Today’s connected consumer doesn’t see it that way however, and the very best retailers have latched onto that fact, selling fulfilment to boost sales.

These retailers address three basic potential fulfilment-related barriers to conversion. In doing so, they present a more compelling proposition, while augmenting their overall value proposition. This is what I would describe as the ‘sales multiplier’ effect that merchandised fulfilment brings to an already well-rounded offering.

The Barriers to Selling Fulfilment and Multiplying Sales:

1. Outcome uncertainty

70 percent of cart abandonment is fulfilment related. Up to 40 percent is related directly to lack of certainty over things such as item availability delivery cost, time, method, manner or ability to return.

The best retailers nail this fundamental issue, and they do this through:

  • Displaying delivery lead times for each product
  • Displaying all fulfilment options for each product in the product page
  • Confirming item availability status in the product page and the very best provide this by fulfilment channel
  • Creating easy links to additional important fulfilment related data

The key here is that fulfilment data must be regarded and managed as an item attribute, not an attribute of a cart or shipment. This is because consumers now consider this an integral part of item selection. Shipping and returns information must be presented as I search, evaluate and select – not only as part of the checkout process or at cart summary level. By this time, if I haven’t been able to see if how and when my purchase will arrive, you may well have lost me as a customer.

Who does this well? – Furniture retailer Zanui.

2. Lack of value context

Whether to charge for delivery is an old problem. For larger harder to deliver items or for remote deliveries the cost of delivery may be 40 to 50 percent of the item purchase price. Consumers see this cost as an additional element in the item price – part of a larger ‘cost to acquire’ evaluation in the purchase decision.

We all know free shipping is the secret sauce of the online value proposition. However, for many retailers, this just may not be an option, or may be something they use as a distinct promotional mechanism but not every day, so how do retailers create perception of value in the fulfilment experience beyond just ‘absence of cost’?

It appears customers consider a range of things as part of their purchase decision-making, many being fulfilment related. In providing well-crafted fulfilment-related service propositions and content, the best retailers are adding value and moving beyond price and cost dynamics to a broader definition of value delivered.

They do this by:

  • Offering additional fulfilment-related services such as insurance, installation, rubbish removal, after sales service or support (these don’t have to be free – just available)
  • Providing multiple fulfilment options and price points with clear differentiation between them so consumers can decide
  • Allowing consumers to self-serve and evaluate these options by integrating tools such as Temando which offer priced alternatives against a range of delivery service standards
  • Providing a bespoke fulfilment management service via live chat, call centre or email – effectively a concierge service so consumers to have their delivery tailored to their circumstances
  • Making returns as easy as it can possibly be and clearly articulating any costs involved, such as processing or re-slotting fees

Consumers are often willing to pay for these features, but regardless of whether they wanted to pay or not, they all see value in simply having the option.

Who does this well? – Woolworths-owned hardware retailer, Masters.

3. Unfriendly process

Online consumers make value judgements about the fulfilment related experience as much as they do about the quality of the search experience, utility and clarity of product information or ease of site navigation.

Successful online retailers really think through customers’ needs in the process and how they help them evaluate and organise fulfilment.

Features of the best include:

  • Easily signposted links to returns policy or other detailed data
  • Displaying all delivery options lead times and costs at cart level when confirming purchase (including any I have deselected – just so I can be happy with my choice)
  • Providing order status tracking as standard on all orders, via multiple communications methods
  • Wording any potentially boring but important information such as delivery routes and timetables or returns policies in a conversational and friendly tone
  • Use of video showing how product is picked, shipped and delivered (valuable in two ways – creating clarity about how I will receive it and in personalising the fulfilment process to create intimacy)

Who does this well? – Appliances pureplay Appliances Online is a standout example.

All good online and omnichannel retailers befriend their customers on the journey to purchase. They help them decide by making themselves easy to do business with and by providing features and functions which add value and promote purchase. The very best retailers invest the same effort in the area of fulfilment – making it a differentiator.

It may not be sexy, but if you sell fulfilment, you’ll sell more of everything.

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