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How to drive online retail loyalty through shipping and fulfilment

By: Darko Atijas

 

Retail is at a point of great inflection, driven by innovative cloud technologies with record-breaking speed and scale.

In such a rapidly shifting environment, retailers need to keep up to date with the developments in ecommerce offering and customer expectations, and of course to remember the fundamentals of delivery and customer service.

This article examines the findings of The State of Shipping report, and what they tell retailers about how to drive online retail loyalty through shipping and fulfilment.

 

Digital commerce companies have succeeded in taking businesses online, and the advancements made within the last five years in online merchandising, security, and payments is a testament to this exciting era.

An area which remained resistant to change is the supply chain; until an ambitious company in 1995 named Amazon gained first-mover advantage and re-invented the supply chain as a supercharged route to success. And change we did see.

It’s no surprise, then, that our 2017 State of Shipping report is all about change.

Harnessing survey data from 275 retailers and 1298 shoppers in the United Kingdom, we identified areas of change that impact everything from revenue to customer experience. For some, these shifts indicate a step in the right direction, and for change-resistors it takes on a more ominous tone. Whatever that means for you and your business, remember that the changing tide waits for no one.

In the times of Brexit and other uncertainties, it’s easy to lose sight or get distracted - so I hope this report provides a slice of clarity to your world. With UK 2017 ecommerce sales valued at over £67 billion, it’s time to give yourself an edge with innovative shipping.

Package by a door

So what do retailers need to know to hone in on winning shipping strategies?

As a shipping technology company, we’re often asked how to reduce carrier costs and if it’s even realistic to offer shoppers the delivery options they demand. But if you want to be ahead of the game the answer, without a doubt, is yes.

After introducing shipping options at checkout, 32% of retailers saw improved customer experience, according to Temando’s State of Shipping in Commerce report for the UK market. And 37% of enterprise retailers reduced cart abandonment with better shipping choice. So if customer satisfaction is at the top of your list, shipping should be as well. At the end of the day, most shoppers don’t discern who they buy from, as long as their shopping experience is great. But to achieve this, retailers must learn to treat shoppers like friends.

“I don’t want to drag you down.”

Don’t let shipping be the weak link in building relationships with shoppers. Limiting them to one standard delivery service is not great, especially when they can easily jump to your competitor’s store to get the same products more quickly. Up to 58% of shoppers will abandon cart if shipping options are unsuitable, and buy from a competitor. Elevate their experience with relevant delivery options that cater to their individual needs. For example, did you know Gen Z shoppers are the biggest fans of hyper-local (1-3 hours) and same-day delivery, while Baby Boomers tend to favour click and collect?

“I’ve got something special for you.”

Hands with gift

Gifting shoppers with shipping promotions shows that you care. 24% of retailers don’t use shipping promotions, despite 37% of shoppers stating they’ll abandoned cart when there’s no free shipping. While free shipping is a strong motivator for conversion, it’s crucial for this tactic to be considered only in an environment that prevents it from cannibalizing profit margins.

“I won’t leave you hanging.”

You expect your friends to confirm that they’re coming to brunch or let you know if they’re running late, so why should it be any different with online order deliveries? Leaving customers second-guessing when their package will arrive or expecting them to contact you for status updates shows that you don’t respect their time.

Delivery date estimate at checkout is a tracking feature almost every shopper wants, but UK retailers lag behind US retailers in offering this alongside a range of other in demand requests. Anticipate their needs by providing tracking information that they can easily access on their devices, so they know you’re dependable.

“It’s OK to change your mind.”

Things go wrong, but life goes on. While this approach may apply to many things that are out of our control, it shouldn’t be the case when it comes to how customers feel about orders they no longer want. By holding them hostage with a complicated returns process, it’s unlikely they’ll choose to shop with you again in the future – and we know acquisition is far costlier than retention. Give customers the freedom to shop with confidence by offering an easy returns process with returns shipping options on a customised portal, and use this extra touchpoint as an opportunity to build brand loyalty.

While free returns shipping is important mostly to low spenders, high spenders are more interested in instant gratification through instore drop offs - the latter behaviour opens up the opportunity for multichannel retailers to encourage more spend in their physical stores.

So before you leave, here are ...

5 take-aways

1. Poor shipping will drag you down.

British shoppers expect seamless shopping experiences that address cost, speed, and convenience so friction such as clunky delivery and returns processes is not tolerated; resulting in cart abandonment and negative reviews.

2. Get competitive on the shipping front.

Shipping and fulfillment today have to be agile enough to flex to their customers’ needs which are influenced not only by other shopping experiences, but also by advancements in technology.

3. Price sensitivity affect both retailers and shoppers.

So innovate your shipping and fulfillment practices to ensure that your operational inefficiencies doesn’t cripple your growth.

4. Shoppers want options.

While ‘free shipping’ remains popular, presenting alternative delivery options backed up with great tracking and returns will ensure peak conversion and open you up to a wider customer base.

5. Shipping is a profit-making tool.

Retailers who successfully use shipping as a sustainable marketing tactic reap rewards to take them to the next stage of growth such as increased sales, improved CX, and reduced carrier costs.

 

By: Darko Atijas, Head of Sales and Marketing Europe at Neopost Shipping

 

Explore how shipping improvements can work for you by downloading The State of Shipping in Ecommerce 2017:

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