Retailers Not Meeting Customers’ Shipping Demands
Accessibility to the internet and the insatiable mobility of commerce have inspired a new generation of shoppers, one that's united by its collective desire to experience the world on its own terms. In response to this brave new world, retailers are slowly aligning their offerings and services around people's lifestyles and shopping habits. However, according to the data in Temando’s 2016 State of Shipping in Commerce report, there's still a long way to go for many retailers. The tips below can help retailers meet consumers’ delivery expectations.
Offer Multiple Shipping Options
Consumers, young and old, are quickly becoming conditioned to the on-demand economy. According to the survey, almost 90 percent of U.S. consumers now expect to see multiple shipping options in the shopping cart and have the ability to select the service that fits their lifestyle and budget. Most shoppers also want their orders delivered faster, with 80 percent wanting retailers to offer a same-day shipping option. Just 53 percent currently are. Consumers also expect online delivery to fit in with their schedules, including 77 percent who want guaranteed weekend or after-hours shipping.
Seventy-six percent of U.S. consumers want a specified time slot for delivery, but only 43 percent of retailers offer this service. In competitive retail categories, time slot delivery services are a huge opportunity for true differentiation. Retailers offering their customers multiple shipping options can expect to see an increase in sales, reduction in cart abandonment and a greater ability to inject operational efficiencies into their businesses. Eighty-six percent of retailers believe that by offering multiple shipping options, they're better served to meet customer expectations, a major concern especially for midsize and enterprise retailers.
The instant gratification needs of today’s consumers have lead directly to an increased desire for personalized communication. Seventy-six percent of consumers expect text/SMS communication throughout the entire shipping process. However, only 42 percent of retailers are providing this service. Retailers need to understand that the product’s journey through the fulfillment process is the customer’s journey. Shipping and fulfillment are now an integral part of the customer-centric paradigm.
Embrace an Omnichannel Strategy
The survey found the gap between consumer expectations and retailer capability to deliver on those expectations is growing. The want-it-now generation is fueled by on-demand services, such as food delivery, Uber and the increase in hyperlocal delivery experiences provided by large retailers. The expectations have been set, and the challenge for retailers of all sizes is keeping pace and being agile enough to adapt to the market.
The research highlighted a key barrier in closing the consumer expectation gap. Surprisingly, the majority of midsize and enterprise retailers are still reliant on centralized distribution center (DC) models to fulfill and ship online orders. Although the fulfillment model of choice for many high-volume shippers includes multiple stores or warehouse locations, the decentralized fulfillment model sets the foundation for hyperlocal shipping and the ability to meet the demands of today’s consumers.
The benefits of an omnichannel approach to shipping cannot be understated, with 95 percent of consumers saying they would use a home delivery service while shopping in-store, especially when goods are heavy or too inconvenient to carry. Fifty-four percent of consumers would have goods shipped to their home if not in stock, but only 35 percent of U.S. retailers offer this service.
The research survey highlights the need for retailers to adapt to changing customer expectations by offering a range of shipping options at the point of sale. To provide these shipping options to customers, retailers need to consider augmenting their existing fulfillment models to accommodate stores and maximize the proximity of their inventory to consumers. The benefits of doing so not only lead to increased operational efficiency, but a chance for genuine competitive advantage and another important way to build customer loyalty.
Hamish Grant is head of marketing operations at Temando, a shipping and fulfillment software platform.