The data gathered from numerous independent studies is clear: online consumers will always tend to reward a positive delivery experience with loyalty to a brand.
This shouldn’t be overly surprising to anyone. In the early 1800s, shopping became a leisure pursuit through mail order catalogues and department stores. From location to decor and merchandising, through rigorous product knowledge training and consistently favourable return policies, merchants have since sought to differentiate their products by infusing them with experiential brand elements. In many ways, modern retail is just the creation of a sense memory designed to influence future purchasing habits.
A large part of that ever-important sense memory is tied to fulfillment, getting the right product into the right customers hands. When rural customers at the turn of the last century sent their money orders to Sears Roebuck Inc., they were usually impressed when their merchandise arrived within a few weeks. Since then, fulfillment expectations have evolved in step with the technology that supports them. Today, the number of customers who want same-day shipping is approaching 80%. More than three quarters of those have a preference for one to three hour delivery.
Knowing What Customers Want
Understanding customers’ delivery expectations has never been more critical to a brand’s ability to compete in the online marketplace. Depending on phrasing, up to 95% of survey respondents say that they would shop with a retailer again following a positive delivery experience. Amazon would have us believe that speed is the one thing that makes customers happy. In a study by UK-based delivery management provider, Metapack, the data shows that customer experience is much more subtle than that. The key findings include choice, environmental concerns and loyalty:
- 75% of consumers have purchased more items to take advantage of a minimum spend ‘free delivery’ option
- 49% of shoppers would prioritize shopping with one online provider over another if it offered a loyalty program featuring free next day delivery
- 44% of consumers would try new delivery options such as collection from a local pick-up point
- 54% now say that it is somewhat, or very important, they’re able to choose which carrier delivers their online purchases
- 77% of consumers are conscious of, or care deeply about the environment when thinking about how they receive their deliveries
Delivery Choices Drive Sales
Another factor that contributes to overall customer experience is delivery transparency (or visibility). According to customer engagement specialists MyCustomer.com, 81% of customers will track their order status two or more times during the fulfillment process. Further, Metapack’s 2017 State of Ecommerce reveals that two-thirds of consumers say they buy more – and buy more frequently – from ecommerce sites that offer a faster, easier, fault-free and utterly transparent delivery experience.
Delivery choice also plays an important role. In the same report, MyCustomer.com, cites that two-thirds of shoppers bought goods from one retailer in preference to another because of more appealing delivery services. “What’s more,” the article continues, “a massive 51% said they had failed to complete an online order because of poor delivery choices.”
Finally, there is the dreaded return – something that retailers (especially in certain high-exchange product categories) are finding to be more complex than planned. Customer expectations for returns and exchanges are essentially the same in terms of speed and convenience as the original purchase. Social brand advocate, Yotpo, cites the number as just over half (51%) for customers who will avoid buying from a particular business with poor return policies.
Sophisticated Expectations Demand Sophisticated Solutions
So, we have the numbers to help us determine what constitutes a positive delivery and we know that creating one is important to building loyalty for a brand. What is somewhat surprising is the gap that still exists between service expectations and service capabilities. Finding the right mix of shipping price, customization, speed, returns management and follow-up (and doing it all at a cost that makes it worth it) is a complex process, requiring understanding of many different technologies.
This is where a third-party logistics partner (3PL) adds value that can really change the game for retailers. In Infosys’s 2019 Third Party Logistics Study, The State of Logistics Outsourcing, researchers found that the overwhelming majority of shippers (91%) describe their relationships with their 3PLs as generally successful. Perhaps more importantly, 89% of shippers agree that the use of a 3PL has contributed to improving services to the ultimate consumers.
Partnering to Exceed Evolving Expectations
This is due in large part to 3PLs ability to specialize, including when it comes to technology and the corresponding investment. The study states that “shippers are increasingly aware that if they do not have the technological capabilities to accomplish their goals, they should partner with those that do.” To compete in the omni-channel, investment in integrated technologies is indispensable. Warehouse Management Systems (WMS), Transport Management Systems (TMS), Supply Chain Visibility and Mobile Applications are just some of the technologies that are in a constant state of evaluation and improvement, giving 3PLs the advantage in terms of offering a delivery experience that meets or exceeds evolving fulfillment expectations.
“Last mile” logistics, once a challenge associated with remote consumers, is fast becoming the battleground of urban consumer fulfillment. With shrinking accessibility and increased home delivery expectations, the future of direct-to-consumer fulfillment is innovation in the form of pick up points, crowd-sourced delivery and GPS-based data mining. By partnering with a good 3PL, online merchants gain a single point of access to the services of an expanding group of last mile innovators.