Amid Supply Chain Disruptions, Consumers Are Maintaining Standards
If there has been one sweeping theme across the retail landscape in 2022 — and there has been — it’s supply chain. A new benchmarked study of 1,150 online consumers from Dotcom Distribution suggests several areas brands and retailers can tackle to shape the ideal customer experience, even during a period of uncertainty in the supply chain.
The study explores trends and patterns in purchase behavior, omnichannel, packaging, shipping, returns, and sustainability. Here are some actionable items from the data.
Avoid Passing Along Shipping Fees
Consumers are sympathetic to supply chain snags, yet despite their acknowledgment and tolerance of delays, they draw the line at paying for shipping. In fact, where 72 percent of respondents reported being more tolerant of shipping delays, only 25 percent said they're more tolerant of shipping costs. Thirteen percent of shoppers won’t even make a purchase if they’re required to pay for shipping. But the real turnoff? Unexpected shipping fees — as evidenced by the 79 percent of respondents who reported abandoning items in their cart after being presented with surprise shipping charges.
Free shipping has long been a primary motivator of consumers’ online purchase decisions, but it’s not just a persuasive factor anymore; today, most online purchase decisions are conditioned by shipping fees.
Tighten Up Your Omnichannel Strategy
The explosion of e-commerce activity combined with the emergence of scheduled, remote and contactless pickup options has created a retail landscape where maintaining a robust omnichannel presence is a prerequisite for success.
With consumers shopping across all sales channels, the implementation of a robust multichannel strategy is integral to a successful consumer experience. Proving this, nearly half of the online consumers who reported a change in their shopping behavior due to faulty supply chains (65 percent of respondents) now check websites for in-store product availability before going to a physical store. This, supported by other findings surrounding consumer expectations, emphasizes the urgency for retailers to deliver on flexibility, transparency and convenience at every touchpoint.
Explore Alternative Business Models
There’s a good reason subscription business models have been so widely adopted in recent years — done well, it boosts retention and generates recurring revenue. According to a study from leading subscription management platform provider Zuora, subscription businesses have grown 4.6 times faster than the S&P 500 over the last nine years. This growth is credited to an increase in consumer demand for the use of subscription services, and Dotcom’s research substantiates that notion. In 2021, 25 percent of online shoppers reported signing up for subscription services during the pandemic; that number grew to 35 percent in 2022.
With UBS forecasting 25 percent growth in the subscription economy from 2020–2025, exploring the viability of this business model isn't to be postponed.
Prioritize Top-Notch Returns Management
A company’s approach to return logistics management impacts how each customer views and does business with that company in the future. When Dotcom’s 2021 survey participants were asked whether they would shop with a company that doesn’t have a free return policy, 55 percent said no; that number increased to 59 percent in 2022.
Returnless refunds — a newer offer — are generating positive customer experiences and repeat purchases. More than half (51 percent) of 2022 study participants said the experience of a returnless refund makes them want to purchase from a brand again (+11 percent year-over-year), 34 percent said it makes them want to donate unwanted items (+11 percent YoY), and 33 percent said it makes them feel like the brand cares about the environment (+6 percent YoY).
This form of emotional branding creates a halo effect that contributes to positive brand perception and sentiment.
Sustainability isn’t just a buzzword. In 2021, 42 percent of study participants reported sustainable e-commerce packaging earns their repeat business. In 2022, 69 percent reported eco-friendly packaging as the feature most likely to make them shop with a brand again, beating out value-adds like free samples and gift-like packaging. Forty-five consumers also found sustainable packaging to be the most appealing feature, compared to factors such as ethical sourcing and fuel-efficient transportation. All of this emphasizes the power of sustainability in building a brand.
These new findings underscore just how integral certain features such as free shipping and sustainable packaging have become as a baseline expectation for consumers. To dive deeper into the research and determine how to deliver thoughtful, unique, desirable, convenient experiences to customers, download the full study HERE.
Maria Haggerty is CEO of Dotcom Distribution, a premier provider of B2C and B2B fulfillment and distribution services.
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Maria Haggerty is CEO and one of the original founders of Dotcom Distribution, a premier provider of B2C and B2B fulfillment and distribution services. She received her Bachelor of Business Administration from University of Houston, C.T. Bauer College of Business with a concentration in Accounting. Maria plays an integral role in developing and defining all aspects of the business, including sales and marketing, operations, finance and IT. As CEO, she is responsible for providing strategic leadership, establishing long range goals, and developing strategies for the senior leadership team. Maria has developed the systemic and procedural infrastructure necessary to provide timely and accurate analysis of budgets, financial reports and financial trends in order to assist the Board, senior executives and clients in performing their responsibilities while achieving favorable results. She works closely with the leadership team to enhance, develop, and enforce procedures that will improve the overall operation and effectiveness of the corporation. During her tenure at the Dotcom, Maria has developed an environment of continual improvement by supporting the Senior Leadership Team and their department managers on continuous process, space labor, automation, and financial best practices. Prior to founding Dotcom, Maria was a CPA at Arthur Andersen and was later the CFO of GoodTimes Home Video where she helped grow the company’s distribution business. When Maria is not in the office, she enjoys traveling around the world and practicing her photography skills.