A Kink in the Chain

Posted by Temando on Tuesday, November 25, 2014 with No comments

In the bold new world of retail, surprisingly few retailers are closing the loop on the multi-channel consumer. Recent supply chain research published by Telstra has reported on the huge gaps between what customers want and what they are being given by retailers. Telstra’s paper shines a light on the current state of the industry in Australia but also highlights a massive opportunity for those retailers looking to cut through and differentiate themselves in a commoditised world.

What do modern consumers want?

In a word: Choice.

One of the biggest draw cards of online shopping is that it’s available anywhere at any time. This seamless experience is how consumers expect their delivery to be as well. These options can be as simple as enabling Authority to Leave (ATL) on deliveries and offering both standard and express services; or could involve more customised options such as allowing delivery to parcel lockers.

If customers are increasingly using mobiles to make purchases on the go how can we assume that they will always be home to accept a delivery? In the same way that retailers have adopted responsive design within websites, they now need to factor increasingly mobile customers into their fulfilment process and offer delivery options accordingly.

Why it matters

Retailers no longer compete with the companies directly around them, they’re competing with businesses all around the world. Customers have access to more choice for their purchases than ever before which makes holding onto customers extremely important. The average cost of retaining an existing customer is approximately 5 times less than capturing a new one. However, you won’t have much chance of keeping your customers if they have a poor experience.

Telstra’s research shows that 50% of Australian online shoppers have had a problem with delivery and our own data shows that of customers who have a poor delivery experience, i.e the carrier didn’t deliver on time, 79% will not return to that merchant within the following 6 months. With a whole world of retailers competing for your customers, it’s more important than ever to provide them with a hassle free shipping experience.

Catching up with Consumers

By sticking to the status quo there are no winners. Our current, rigid processes penalises customers for not conforming to them, resulting in more work for delivery drivers and costing retailers in both redelivery fees and lost customers. The logistics industry is by no means straightforward and requires an industry lead ecosystem approach to solving these challenges.

To craft shipping experiences that truly surprise and delight customers would be almost impossible for most retailers to achieve alone. Just as they might engage with marketing agencies and external advisors to craft their brand and products, they must also forge relationships with technology partners and logistics providers that will allow them to meet the ever-changing service requirements of their customers.

For more insights into changing customer expectations around delivery, read Telstra’s Personal Supply Chain White Paper which includes a contribution from our CEO Carl Hartmann.