Today’s e-commerce consumers have high demands and their expectations are only going up. They want products fast, without hassle and at the lowest cost possible. And in a saturated market driven by social media and customer reviews, satisfying these expectations has never been more important.
Customer experience is projected to overtake price and product as the key brand differentiator by 2020. Customers expect seamless experiences when it comes to shopping online, which calls for convenience and personalization.
The fact is, the product journey is now the customer journey—putting shipping and fulfillment at the center of improving the customer experience. Differentiating your brand is critical and starts with logistics.
The Importance of Improving the Customer Experience.
With e-commerce sales up over 16% in 2017 it’s no secret that more and more customers are choosing to purchase items online. In fact everything about retail and manufacturing is accelerating—it’s an instant-everything world and customers want their deliveries ASAP!
Rising Customer Expectations.
Customer expectations are steadily on the rise in today’s omnichannel world. From free or same-day shipping, to express or ship-from-store, customers expect a solution that matches their needs right at that moment. And they’re quick to abandon their cart when they don’t see the shipping option they want.
The problem is, the gap between customer expectation and retailer and manufacturer capability is growing. The future belongs to companies who look at this as an opportunity and turn shipping and fulfillment into a competitive advantage. [How Amazon Does It]
Customer Expectations aren't being Met.
Most companies still don’t fully offer what customers want. Sometimes, the services that a percentage of customers are prepared to pay a premium for are higher than what they’re actually being offered. For example, 77% of consumers have used and would like to use guaranteed weekend or after hours shipping, and 42% of them would pay a premium for this—but only 34% of retailers offer it!
Sometimes customers are prepared to pay a high premium for the service they desire, yet the company still doesn’t offer it.
Higher Demands for Order Visibility.
Not only do customers expect a ton of shipping options, they also want visibility throughout the entire shipping process. From the moment an online order is placed, ownership is transferred to the customer and they expect to be kept in the loop. Additionally, 80% of customers want the ability to track their orders not only online, but on their mobile device. And of those 80%, 76% of them want SMS communication throughout the entire shipping process.
Customers like to be aware of their purchases and giving them a
choice at checkout is now less of a feature, and more of a necessity.
With 71% of all retailers giving their customers a choice, remaining
competitive starts here.
The 5 E-Commerce Customer Profiles
By carefully assessing your customer’s needs alongside your products and services, you’ll be able to narrow down the shipping options that give your e-commerce business the best chance at success.
Here are fOUR customer profiles and innovative shipping options that best match their needs:
Persona #1: Last Minute or Impulse Buyer “I need this now!”
Needs: The ultimate instant gratification, hyperlocal deliveries are made between one to three hours, and rely on a nimble fulfillment system and carrier network.
Suitable for: Perishables, gifts, highly anticipated product releases
34% of shoppers are willing to pay a premium for this service
Persona #2: Well-organized, Thrifty “I like to plan my day.”
Needs: Click & Collect, also known as ‘in-store pick-up’ or ‘buy online, pick-up in-store (BOPUS)’ - click and collect enables customers to pick-up their online orders in physical stores. It’s a great multichannel tactic to encourage customers to shop more, and is usually a free or nominally charged option. To avoid labor costs, many companies are now choosing parcel lockers.
Suitable for: Everyday essentials
31% of shoppers are willing to pay a premium for this service
Persona #3: Sales, Discount Hunter “I want the best deals.”
Needs: Super Saver enables multiple items in a single order to be grouped into as few shipments as possible. This method is a smart way to save on packaging and multiple carrier fees, and customers will receive their orders later – between five to eight business days.
Suitable for: Budget buys, sale items, post-holiday shopping
Persona #4: Time-poor Shopper “I’m never home.”
Needs: After hours delivery gives customers a chance to receive their online orders when they arrive home from work or over the weekend. This reduces the need for multiple re-delivery attempts, or for the customer to make time to travel to a depot or post office to pick up the item.
Suitable for: All items
38% of shoppers are willing to pay a premium for this service
Building Customer Loyalty with Gen Z.
Generation Z is defined as anyone born after 1995, a “digitally native” group that grew up not knowing life without cell phones or the internet. With up to $143 billion in buying power, as this generation grows older retailers need to make sure they keep the customer experience top of mind to keep Gen Z coming back.
The Gen Z Profile.
Compared to other generations, Gen Z is extremely brand loyal, and they prefer shopping for the best discounts. ProShip’s State of Shipping report found that Gen Z is also the most susceptible to increasing their basket size in order to qualify for free shipping (the average Gen Z basket size is $241!). But what will it take to secure them as customers?
Standing Out to a Digital Shopper.
Mobile shopping is the most popular with Gen Z as opposed to other generations. Having a digital strategy is key to building customer loyalty. Retailers need to connect technical in-store innovations to highly personalized online experiences to attract them. They are the youngest group of consumers currently and have not had much time to grow their own disposable incomes, so affordability is also a huge deal to them. Free shipping is a great perk, but it is not the singular driver to shop online—price, on-demand, ability to access otherwise unavailable items, and better selection all weigh into this decision.
Demanding Online Expectations.
When it comes to ordering online and getting items shipped to their door, Gen Z has a very deliberate expectation: now. In fact, 98% of Gen Z reported that they would abandon their cart at checkout if the shipping option of their choice was unavailable – and if this happens, 44% of them reported they would opt to buy from a competing online brand.
To meet the increasing demands of Gen Z, retailers need to have the capability to flexibly control and curate a range of shipping options easily. Learn more about Gen Z in this new report.
Competing with Amazon.
Since Amazon began booming, more and more businesses are filing for bankruptcy. Not to mention that customers are moving from shopping at brick-and-mortar stores to shopping online. But with Amazon as the leading online retailer, how can others compete? The first step is understanding why customers prioritize Amazon above the rest.
Offer More Shipping Strategies.
According to Smarter HQ, 84% of shoppers demand fast and free shipping. This is something that Amazon offers its shoppers with a Prime membership. Without their iconic free, two-day shipping, Amazon would stand to lose 82% of their 100 million Prime members.
For many companies, free shipping doesn’t seem like a feasible option because of the high cost. However, many issues point back to the shipping system itself. Look at your current shipping solution. Are you utilizing carrier-specific shipping software provided by commercial carriers? When you use these systems to handle the bulk of your shipping, it’s more difficult for shippers to switch carriers seamlessly and access more favorable pricing.
Re-evaluating your shipping solution and using a carrier-agnostic multi-carrier shipping software can alleviate these pains and help you provide free-shipping. A 30% reduction in shipping costs is common with additional carrier options.
There are other shipping tactics as well. You don’t have to offer free shipping to everyone. Instead, only offer it to your highest spending customers or those with a high cart abandonment rate.
How Shipping Impacts the Customer Experience.
Today’s customers choose when and by what method they want their order delivered, and businesses are tasked with guaranteeing customer satisfaction. In fact, shipping-related reasons attribute to over 60% of cart abandonment. Essentially, companies are competing with e-commerce giants that offer more shipping options.
Having multiple shipping options such as weekend delivery, time slot delivery and 1-3 hour shipping will impress your customers and keep them happy while generating you more revenue. Without these changes, you will not be able to execute a truly customer-centric supply chain.
The Impact of a Negative Shipping Experience.
It happens all the time. A shipment is lost, delayed or arrives to the customer damaged. Although many companies have policies in place that give customers refunds or replacements, they often don't make up for the disappointment, or even embarrassment, a customer feels when the inevitable happens
The Product Journey is the Customer Journey.
Why Having More Shipping Options Will Increase Sales.
Customers have come to expect that speedy delivery will be available to them at checkout, and if it’s not, they’ll be looking elsewhere. It’s no surprise 86% of retailers say having more shipping options increase sales. Because of this, many companies are chasing their tail trying to find a balance between speed, cost and practicality.
Customers are Willing to Pay More for Premium Shipping.
A surprising 75% of online shoppers are willing to pay a premium for expedited shipping. In order to meet expectations, retailers are being pushed to offer premium shipping, which includes delivery options such as same-day, next-day and hyper-local. There are a variety of circumstances in which customers are willing to pay for these options. [How To: Last Mile Fulfillment]
Impress Customers During Peak Season.
Satisfying Customers with Fast Delivery.
Reportedly, 40% of online customers in the US rated e-commerce companies based solely on the delivery experience. Fast delivery resonates with customers of all ages; more customers than ever are using services such as Amazon’s same-day delivery to receive items just hours after ordering.
While customers enjoy convenient, online ordering and speedy delivery, many expect delivery to be free. Finding a balance between offering the convenience consumers demand while reducing costs marks a clear competitive advantage in today’s e-commerce industry.
As the demand for online shopping continues to accelerate, so do
customer expectations. Customers want to receive their order on the day
they expect it, making delivery a critical element of the total
e-commerce experience. But delivering on this expectation can be
Best Ways to Improve Your Delivery Performance.
Bring stores into your omnichannel strategy.
Ship from Store (SFS) is a fulfillment process where retailers use stock from their brick-and-mortar stores to fulfill orders. Fulfilling orders this way transforms the store itself into a virtual distribution hub. By utilizing an SFS delivery system, you can shrink delivery times to keep your customers coming back—increasing sales and improving your margins. In fact according to Forrester, Kohl’s was able to decrease shipping time per order by ½ day by bringing their stores into their omnichannel strategy.
Use software to automate manual processes.
Last mile delivery is defined as ‘the movement of goods from a transportation hub to the final delivery destination’ – typically a personal residence. The differentiator in this field will be technology. Shipping software will manage workflows, direct the customer experience and provide visibility to all parties. The end consumer will see the difference in the form of a package on their front step, days, even hours, after ordering. You’ll see the difference in the form of increased speed, efficiency and revenue.
What Keeps Customers Coming Back.
To meet the expectations of today's customers, businesses have a unique opportunity to re-imagine their supply chain and create meaningful, cost-effective customer experiences. By focusing on how you ship your products, how many options you give your customers and how much visibility you allow them, you can improve the customer experience and reap all the benefits.
Improving the Return Process.
The best way to increase conversion rate is to offer a seamless returns process. In fact, 43% of shoppers would actually shop online more frequently if returns were free and easy. On top of that, 72% of shoppers want free shipping when returning their items.
Easy Returns Encourage Sales and Customer Loyalty.
Returns capabilities impact shopping behavior. Making returns easy eliminates consumer hesitation at checkout. Returns policies should be displayed prominently—make it another point of difference. By providing an outstanding online and in-store returns experience you will gain a competitive advantage.
4 Tips to Prepare for Peak Season Returns
1. Offer free shipping.
Free shipping for returns is often noted as the most important part of a consumer’s best returns experience.
2. Offer a “no-questions asked” return policy.
Often times, many customer don’t even bother to return an item because they don’t want to “argue” with a company over their return reasoning.
3. Offer an automatic credit/debit card refund.
When a customer returns an item, they prefer to receive their money back right away, as if they were returning an item in a store.
4. Include a prepaid return label right in the box.
Providing a prepaid return label allows the customer to return their item with ease.
Ways to Reduce the Cost of Returns.
Providing free returns is not an option for some businesses, but there are other opportunities. For example, Best Buy gives special return deals to those who are part of their loyalty program. Implementing programs such as this allows you to give special return discounts to your best customers. Another option is to give discounts if shoppers choose to “opt out” of returns. An example of this is Jet.com, where if a customer opts out of their return policy, they get their item at a lower price.
Finding the Right Multi-Carrier Shipping Solution.
The ultimate goal of companies is to reduce shipping costs while still providing the fastest delivery times and tracking capabilities that customers expect. Optimizing your shipping process can change everything including transforming your shipping function from a cost center into a profit center.
Delivering cost-effectively and on-time—while meeting carrier compliance—is critical. In today’s e-commerce environment, every shipment counts.
The Benefits of Multi-carrier Shipping Software.
Delivering cost-effectively and on-time—while meeting carrier compliance—is critical. In today’s e-commerce environment, every shipment counts.
Multi-carrier shipping software provides automated rate shopping from a company’s negotiated rates with major carriers worldwide. The result? The best shipping option for every order.
Shipping software can also print carrier-compliant labels and offer live parcel status and delivery updates for end-to-end tracking. It will even archive a shipment history for both your company and customers, and provide predictive shipping analytics to monitor shipping costs and operations.
Software tools optimize service and efficiency, control costs and ensure orders get on the right truck faster. And that keeps customers coming back.
Shipping Software Checklist
1. Rate shopping
Present the best cost and carrier to customers immediately at checkout based on lowest cost, fastest transit, cost-plus time in transit or advanced date shopping. A 30% reduction in shipping costs is common.
2. Parcel Consolidation
Deep relationships with all major carriers and regional services ensure the best cost for any given parcel. Let the system shop between parcel, rail, freight forwarders, LTL and hyperlocal carriers.
3. Faster shipment processing
Get fast, real-time processing of complex business rules and rating logic. With built-in reporting and analytics you can isolate cost centers, monitor trends, and identify unnecessary usage of premium services.
4. Track & trace technology
Provide automatic customer notifications with real-time parcel status, delivery updates and e-notifications for end-to-end tracking to reduce customer service calls and increase customer satisfaction and loyalty.
5. Carrier compliance
Generate carrier-compliant labels, manifests and other required documentation automatically at fulfillment to leverage multiple carriers instantly. Avoid additional fees, delays and returned deliveries, and manage complex import tariffs, packaging specs, custom rules and regulations for international markets.
6. Same-day carrier services
Give customers access to the fastest and most cost-effective same-day delivery option to reduce cart abandonment from high shipping costs.
Learn More Start competing today.
To compete smarter, faster and serve customers better, you need flexible and scalable shipping software that will lead you there. Start delivering a seamless delivery experience that leads to customer satisfaction, brand loyalty and invaluable brand advocacy.
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