The rise of e-commerce has created many opportunities – and many challenges – for retailers and manufacturers. The good news: shippers can access new revenue streams and expand their product footprint globally. The bad news: many companies are still employing a traditional approach to order fulfillment, and while traditional supply chain models certainly yield benefits in a “simple” shipping environment, they fall remarkably short when it comes to tackling the complexities of e-commerce shipping.
One such challenge? Transparency. Today’s consumers don’t just expect free shipping (thank you, Amazon) they also expect fast delivery (thank you again, Amazon) as well as transparency throughout the delivery process. In fact, according to PwC’s 10th Annual Global Consumer Insights Survey, 88% of consumers surveyed now place such a premium on same-day/next day delivery options, they’re actually willing to forego free shipping. And Logistyx partner project 44 reported that 74% of consumers surveyed shared when a package isn’t delivered when expected, it negatively impacts their impression of the company.
With this in mind, e-commerce shippers might want to consider offering a same-day/next-day option for shipping – at a price – and focus on other key ingredients in the customer experience, such as transparency. This means providing real-time shipment data and package tracking capabilities, along with positioning customer service teams to monitor and proactively address problems to deliver exceptional customer service.
But First, Visibility
Unfortunately, shippers can’t provide customers with delivery event transparency if they don’t have visibility into parcel movements once the shipment leaves the warehouse, distribution center, or store. In many cases, a customer service representative has to take several steps before they can tell a customer when their package will be delivered, none of which provide the personalized, proactive buying experience customers are seeking. For example, the rep may tell the customer to call the carrier’s customer service number for an update… or they may provide the customer with a tracking number and send them a link to the carrier’s website… or they might submit a ticket in the carrier’s system and ask the carrier to contact the customer with an update. This kind of manual process may take hours (heaven forbid days), even for a fairly standard request, and it means the shipper is playing defense.
And poor visibility in parcel shipping creates problems beyond transparency. In fact, reduced visibility is often a byproduct of either low – or no – investment in transportation management technology, and the costs organizations incur when they don’t invest in this technology can be steep:
- Higher parcel shipping spend. Shippers without the ability to track carriers’ on-time-delivery rates risk increasing their transportation spend. They lack the necessary data to truly evaluate carrier performance, and therefore carrier selection and negotiations are uninformed. Furthermore, without the ability to match carrier invoices against actual performance, shippers may pay for an on-time delivery, when in fact the delivery was late. And in many organizations, higher parcel shipping spend leads to higher product price points – ultimately pushing customers toward competitive offers or toward a “no buy” decision.
- Increase in refunds. Poor visibility means the shipper has no way of communicating transportation updates to the customer – including delays – and uninformed customers are often unhappy customers, demanding a full refund for shipping costs or even a full refund for the purchase price. Perhaps even worse: according to a study from OSM Worldwide, two-thirds of online shoppers will express frustration to friends and family when a package doesn’t arrive as expected.
- Lost customers. According to a report from project44, 85% of marketers claimed delivery is moderately to very important to their customer experience and brand. This means for retail shippers, working on the customer experience post-checkout is essential for repeat purchases. An unfortunate byproduct of the poor customer communication described in #2 above: when a customer is disappointed, his or her loyalty to the shipper will also decline — leading them to consider competitors’ products.
The Sure Path to Transparency
There are myriad ways to increase transparency for customers, but to go on offense, shippers need to leverage data and connect the end-to-end transportation chain with a TMS for parcel shipping.
A TMS for parcel shipping will provide full visibility into customer deliveries, including a complete picture of what’s happening with each shipment, so shippers can monitor carrier performance and respond rapidly to any issue or disruption. The system will send early warning signs when there are parcel delivery issues or “exception events,” empowering customer service teams to proactively trouble-shoot the exception event and communicate delivery updates to the customer in real time. For example, perhaps the product can be sent from a different distribution center to arrive on time. Or perhaps the customer is willing to retrieve the product from a nearby store or locker.
A TMS for parcel shipping even makes it possible for organizations to provide customers with the ability to track and trace shipments on their own (not the carrier’s) website – reducing inbound calls about shipment status to customer service and increasing the customers’ browsing behavior while on the website, which (fingers crossed!) could lead to additional purchases.
Consider too that tracking delivery exception events enables shippers to capture accurate carrier performance data – improving carrier service measurement and better informing carrier contract negotiations.
Improve Transparency in Parcel Shipping with a Best-of-Breed TMS
It is possible to improve transparency in parcel shipping by rethinking distribution and fulfillment strategies and gaining more visibility in day-to-day delivery operations. Implementing a TMS for parcel shipping will ensure you’re capturing delivery event data at each milestone and pro-actively providing information to your customer about their product’s whereabouts during the shipping process. It’s an absolute must for dynamic shipping teams in the e-commerce age, and it’s just a click away.