Online delivery for retail
What is online delivery?
With both cost and convenience impacting whether customers shop in-store or online, delivery is one of the most important parts of the ecommerce experience.
When we talk about online delivery, we refer to purchases made online from traditional high street retailers, such as Majestic Wine, as well as from web only online retailers such as Amazon or Graze.
According to leading data analysts, Statista, in 2017, an estimated 1.66 billion people worldwide purchased goods online. During the same year, global eretail sales amounted to 2.3 trillion U.S. dollars. In Asia Pacific, ecommerce sales accounted for 12.1 percent of retail sales but only for 1.8 percent of retail sales in the Middle East and Africa.
The landscape of online shopping is ever changing with customers increasingly using their mobile devices for various online shopping activities. During their most recent survey, Statista found that 11 percent of online shoppers stated that they shopped online via smartphone on a weekly basis.
The provision of well-priced and timely delivery will impact a customer’s decision to purchase. Delivering on the expectations that are set through the checkout process will become crucial to customer experience and their decision to buy again.
What do we mean by On Time Delivery?
On time delivery (OTD) is the measurement used to review a businesses ability to fulfill orders over a period promised to their customers. Different organisations measure OTD in different ways. In basic terms it’s a calculation of the amount of orders delivered on time to customers in relation to the total number of orders placed. If the number is below the benchmark, it likely means there are issues within the ordering and delivery process which should addressed.
Your customers and online delivery
Improving online delivery customer experience
In recent times, and during the festive season in particular, you’ll find considerable media coverage relating to online delivery issues and the many customers reporting a less than satisfactory service in the run up to Christmas.
Retailers must continue to review and evolve their way of thinking when it comes to fulfillment, opening trading opportunities, expanding available delivery options and critiquing the end to end order and delivery experience to meet the requirements of today's customers.
Whilst physical deliveries, including the timeliness and quality, are critical, the overall delivery experience begins during the original online purchase decision and checkout process.
eCommerce retailers should commence their thinking around online delivery from the first time a customer is exposed to the opportunity to purchase. Are delivery options visible? Are restrictions (geographical, weight or timescale) shown clearly? Many consumers buying online will be time poor and won’t be prepared to look or click for the information they need. If delivery advice and costs are not readily available, they will be quick to abandon their baskets and go elsewhere.
Once a retailer has successfully persuaded a customer to reach the checkout, they need to be mindful of the customers’ continuing need for simplicity and ease; looking to input little data and complete few fields as possible.
eCommerce retailers shouldn’t underestimate the importance of having intuitive, accurate address verification systems. More difficult and lengthy solutions will be quick to drive customers to abandon their cart and turn to competitors. Providing quick ways for customers to enter their address details at checkout will improve usability across both web and mobile, reducing cart abandonment rates. Removing this friction from the checkout process will also alleviate failed deliveries later – to the benefit of both retailer and customer.
Remember too that customers do not realise the importance of data quality, for example with address checking from a postal code or zip code, and that providing incorrect details can lead to further problems at a later stage. Many retailers would benefit from rethinking their address checker provision in order to start the relationship with quality data.
How are delivery options changing the shopping experience?
Increasingly, consumers expect a range of online delivery options from ecommerce retailers, from home delivery, timed services, and a growing number of click and collect options. According to a report from GlobalData, click and collect continues to rise rapidly in the UK, outpacing growth in the online retail channel, with click & collect sales forecast to account for 13.9% of total online spend by 2022. But, with click and collect user satisfaction falling by 11.2% in the last 12 months, ecommerce retailers must embrace change and consider including collection locations where their customers socialise, travel and gather.
In terms of physical deliveries, research increasingly suggests that shoppers prefer free over fast delivery, in contrast with many retailers who focus their energies providing fast delivery services above anything else. Free delivery can act as an excellent incentive to tip customers purchase decision in the right direction. However, many retailers admit that they don’t use free shipping as a promotional tool.
Retailers should test delivery options, establishing if it’s fast or free that matters most to their customer base. Including options for free delivery over a certain spend value can maximise commercial gain.
And, once the hurdle of a successful ecommerce transaction is complete, the retailer’s logistics arms move into action and the targets move to a focus on successful delivery to the customer.
Your retail business and online delivery
The cost of failed online deliveries
Delivery of products can be something of an afterthought, just part of the process that logistics departments or customer services teams should worry about. However, according to research by MetaPack, convenient and efficient delivery options are a highly influential part of the buying process for consumers.
Failed deliveries cost retailers in a variety of ways. In fact, when we spoke to over 300 retailers in the U.S., U.K. and Germany, 65% of them said that failed or late deliveries are a significant cost to their business. In fact, 5% of all online orders fail to reach the customer first time.
After a failed delivery, 54% will refund the delivery charges to the customer, 54% will pay additional costs for redelivery, and 38% will offer the customer a discount as an apology. It’s not hard to see how these costs quickly add up, or how they impact business performance. UK businesses, in particular, pay the price for orders not arriving to their intended recipient the first time around, with 5.6% of orders not getting to their destination, and at an average cost to the retailer per failed delivery of £14.35
Of course, these monetary costs do nothing to account for the damage to the retailer’s brand reputation that poor delivery will cause. The loss of existing customers and failure to acquire new ones could hit retailers even harder further down the line.
Reduce failed deliveries with improved data quality
Independent research conducted in November 2017 by Loudhouse, an independent research consultancy, revealed that 19% of failed deliveries were due to poor quality customer data.
To mitigate against address issues, retailers must provide a robust verification solution which allows customers to provide as accurate data as possible.
This is where address verification can improve on-time delivery rates through better data quality. Accurate address data entered into an appropriate data quality system at the point of entry will reduce the need to clean the data once it’s in your database, speed up data entry and avoid typos.
Our online calculator could help you find out how much your retail business could save.
Global online delivery, the challenges and opportunities
If you're looking to grow your ecommerce business, delivering internationally may well be part of your growth plan. When you move to global deliveries you’ll need to figure out how to ship internationally.
International delivery will require a strategy that is tailored to your business. You’ll need to understand the available options, international address formats and a process to capture that data correctly.
Once you have this in place your ecommerce retail business will be ready to meet the needs of customers everywhere.
According to global tech company Pitney Bowes, in 2017 70% of online shoppers shop internationally. That same Pitney Bowes report states nearly 93% of online retailers either already offer, or plan to offer, international shipping by 2019. Statista has also reported an average order value of an international sale at $147 USD, 17% higher than an average domestic sale.
Online shoppers have come to expect international shipping, and ecommerce businesses are increasingly meeting that expectation.
With over 130 different address formats in the world, thousands of languages and innumerable accents, it’s easy to see why poor international data management continues to be an issue even for big business. Serving international customers involves providing for the uniqueness of worldwide addresses in order to capture accurate customer data and deliver the best possible user experience and avoid costly failures.
With a plethora of address formats in use across the world Loqate have developed an address checker tool to help develop your understanding of formats across the world.
The future of online delivery
Online delivery trends
With consumer attitudes and behaviour changing in line with technology, the ecommerce retail industry will need to continue evolving at pace in coming years. The worlds of data, logistics and delivery will need to be ready to change to keep up with these changes.
Online purchasing will need to be able to offer multi-channel experiences including voice control. Emerging technology like augmented reality and Smart home technology such as Smart key are set to offer new opportunities for the sector. eCommerce retailers must consider delivery choices as much as price and be capable of simultaneously holding a local and global outlook.
With retailers such as Argos and Walmart following Amazon with same day delivery options, other ecommerce retailers will soon need to respond to this customer expectation.
Retailers will need products to be available locally; have a real-time view of their inventories and develop speedy finding and packing solutions. Most importantly, logistics providers need to be able to pick up and deliver orders ad hoc or multiple times throughout the day. Quality of delivery data will become increasingly important. With same day deliveries it will be harder to manage a successful re-delivery attempt within the expected delivery window.
Communications agency Walker Sands recently polled over 1,600 consumers and found that 19% had already made a purchase using a voice-controlled device in the past 12 months. The poll results also suggested that voice search was even more popular with millennials, with 37% saying “they always or often shop online via voice-controlled devices”, and 43% have made a purchase using voice in the past year.
If consumers are making purchases via voice search, they’ll expect the rest of their experience with the retailer to offer a voice search option. Retailers will need to optimise delivery updates and returns processing to integrate this technology. If a consumer wants to know where their order is, they should be able to enquire via voice.
Despite the broadening expectations of consumers, it remains the case that what they value most is accuracy, data quality and the ability of a retailer to deliver against the promises they make.