This year has upended e-commerce in ways that are almost unthinkable. Since March, e-commerce volumes have grown exponentially, reaching peak-like levels, and with this unexpected growth came delivery delays. Looking ahead to the “real” peak season, volumes are predicted to hit unprecedented levels and carriers are already anticipating capacity crunches, meaning delays could continue.
Here are three tips to get e-commerce delivery right and keep customers satisfied in the days ahead:
1. Accurately Set Delivery Expectations
The good news is that most e-commerce shoppers understand the pandemic has slowed delivery times. The one- or two-day delivery turnarounds shoppers previously enjoyed simply aren’t possible in a shipping landscape where volumes are high, and capacity is tight. But where many retailers have gone wrong, is in their communication to customers about delivery events and delays. One recent report found that 42 percent of online shoppers want to receive real-time updates on their packages. To underscore the importance of this statistic: this is roughly the same percentage of shoppers who want free shipping.
Therefore, as we head into peak season, retailers should make sure they have a clear communication strategy to accurately set delivery expectations – and the right technology to execute. Retailers who have implemented a cloud TMS for parcel shipping benefit from Control Tower functionality, which means they can provide shoppers with the transparency they value. 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.
With a cloud TMS for parcel shipping, customers can even track and trace shipments on a retailer’s website without the need to visit carrier sites, reducing inbound calls about shipment status to customer service and increasing customers’ browsing behavior on the retailer’s website – which (fingers crossed!) could lead to additional purchases. Consider too that tracking delivery exception events enables retailers to capture accurate carrier performance data – improving carrier service measurement and better informing carrier selection from the onset.
2. Have an Omnichannel Distribution Strategy
If we’ve learned anything during the pandemic, it’s that retailers that take advantage of their physical presence are the ones to gain a competitive edge. Having the ability to pull multiple e-commerce order fulfillment levers such as deliver from store, buy online pickup in store (BOPIS), and delivery drop-offs in lockers is a critical differentiator over retailers that execute e-commerce fulfillment from warehouses and distribution centers only.
A recent study reported deliver from store is the most popular e-commerce order fulfillment method because it’s the optimal way for retailers to meet consumer demand and stay on par with Amazon’s one-day delivery. Studies also report that by delivering orders from store, retailers enjoy six times more order volume and a 169% increase in conversion rates, offsetting order fulfillment costs and increasing consumer satisfaction. Furthermore, 61% of shoppers prefer a one- to three-hour delivery window, which is usually only achievable by delivering from the store closest to the customer.
But customers’ demands don’t stop there. Eighty-six percent have requested products be sent to a store or locker and approximately 50% factor in the availability of BOPIS when making a purchasing decision. This is actually good news for retailers, as BOPIS is a win-win. With BOPIS, retailers reduce the cost of delivery and increase in-store sales, and consumers get their products faster and avoid a shipping charge.
Therefore, smart retailers are ensuring their e-commerce platform includes information about product availability and allows customers to choose from a variety of delivery options. And just as before, retailers need a cloud TMS for parcel shipping on the back end, which seamlessly integrates with a retailer’s system of record to automate high volume, multi-carrier, omnichannel shipping. Regardless of which delivery option the customer chooses, the system automatically selects the right carrier service for each order according to parcel origin, parcel destination, carrier contracts, and business rules; and creates or acquires the tracking, labels, and documents. Retailers can thus satisfy customers’ delivery requirements and drive down the cost of shipping–transforming logistics into a profit center within the business.
A cloud TMS for parcel also ensures retailers have the right mix of carrier services in their transportation strategy to achieve omnichannel fulfillment. The software will include a Business Intelligence platform to help retailers understand how factors such as distance, speed to delivery, package size, and density affect spend within their transportation carrier landscape. For instance, if a retailer is implementing changes in fulfillment to increase ship-from-store or locate a new DC, understanding how these changes impact zone and carrier service-level downgrade options is critical.
3. Prioritize the Last Mile
Although retailers understand the importance of e-commerce, they often fail to prioritize the last mile, treating it as the carrier’s problem, not theirs. But this is a mistake. Last mile delivery is expensive – the most expensive portion of the end-to-end delivery equation. According to BI Intelligence, the total cost of shipping for the last mile is 53% of the total delivery cost. And with the ubiquity of “free shipping,” customers are unwilling to pay a delivery fee, forcing retailers to absorb the cost.
To overcome challenges in the last mile, retailers should utilize an omnichannel inventory approach, maximizing their number of inventory sources, including distribution centers, warehouses, and stores, so they are closer to the customer. And a key component to this approach will again be – you guessed it – a cloud TMS for parcel shipping.
A cloud TMS for parcel shipping will allow retailers to access and rate shop within an extensive network of carriers, including last mile carriers such as OnTrac, LaserShip, and Speedy Delivery, which usually offer next-day ground delivery within 400 miles of a shipment’s origin and without the surcharges national carriers assess. Gaining in popularity among retailers of all sizes, last mile carriers can be the key to avoiding the national carriers’ holiday surcharges this year and to achieving faster, cheaper delivery in the last mile.