Challenger Brands Are Failing On Online Delivery – Things Must Change
The outbreak of Covid-19 has turned the online sales ecosystem upside down, with a monumental upturn in sales. Ecommerce today is booming, catapulting online stores to new heights. E-retail revenues are set to reach $6.54 trillion by 2022, as more and more retailers and entrepreneurs start moving online.
In our research, we found that 65% of consumers will be buying online more frequently over the next 12 months, with 20% telling us they’re expected to only buy online within 5 years. There’s clearly a massive opportunity here for challenger brands – especially those in the DTC space – to capitalise on the huge increase in online custom, especially as shoppers – as much as 81% of them – want to buy products from brands directly.
Unfortunately, while most brands are aware of everything they need to do on the front-end in the race to attract direct sales, few seek to address the operational complexities that lie beyond the buy button. That means that when it comes to delivery – many online brands are failing.
Let me add context here – since the start of the pandemic 61% of consumers have experienced some problems buying from brands online – with a quarter of shoppers having been let down by an online order since the crisis started.
It’s not a stretch to say that today’s ecommerce market is fraught with fulfilment issues, and these widespread errors and delays mean shoppers are missing out on vital deliveries, leading to greater levels of disappointment and mistrust in online shopping.
Online Demand Is Causing Costly Errors
As consumers move online, vendors must process increased demand of online orders more quickly – and that can lead to mistakes. If you’re running out of stock or shipping to the wrong addresses on a regular basis, these mishaps are often down to ineffective workflows or human error.
For online brands, these delivery mistakes will not win you any favor with customers – it will quickly erode their trust in your brand and you can count out any repeat business. Post-Covid, maximising customer lifetime value is going to become even more essential. Recently, we’ve seen data supporting the value of retention vs. acquisition like improving customer retention 5% increases profits by up to 95%.
Forrester also expects spending on customer loyalty and retention will increase by 30% over the next year, after acquiring plenty of new online customers during the 2020 ecommerce boom.
We know that post-purchase experiences, from delivery to returns, have a major influence on customer loyalty and retention – and it is these scenarios that should be being addressed over the next 12 months. To further that point, in a poll by Brightpearl, we found that 77% of all 1-star reviews were related to issues with deliveries, like delayed goods, or items being shipped to the wrong place.
With that in mind, optimized delivery strategies must be top of the agenda for fast growing brands. With online sales set to continue growing, revamping your eCommerce delivery strategy to make online deliveries faster, more reliable, and more flexible could provide that competitive edge that both attracts and retains customers over the long-term.
Brands that don’t improve their services, run the risk of missing out on one of the biggest digital opportunities in recent years.
Spilling The Secret Sauce
When it comes to online delivery, the top-performing retailers all have something in common. They consistently meet -or beat- customer delivery time expectations and react rapidly and seamlessly to changing consumer needs or spikes in demand.
These brands understand they’re competing with the big players in the yard. That means Amazon, and they are prioritizing fast, reliable delivery and fulfillment as being of the utmost importance.
The top performers are exceeding expectations and are able to remain competitive because they have an automated delivery strategy in place. While Amazon remains faster than every major competitor, these top retailers are closing the gap via fully automating sales orders, stock updates, distribution decisions and more. Thus avoiding human error and increasing the productivity of the operation as items are moved out of the door more quickly.
When it comes to shipping speed – automation can improve this exponentially, allowing a brand to present itself as a viable alternative to the giants with the speed, convenience, and consistency of service which ensures customers are happy and more likely to return for repeat purchases.
New Era – New Solutions Needed
COVID-19 has shone a spotlight on existing business and retail models and proved to be an extreme stress test. Fast delivery, guaranteed order fulfilment, and excellent customer experiences are now the bare minimum for online retailers. In my view heightened demand will not drop off and brands should fully expect that altered expectations and interest outside of traditional ‘peaks’ are the new normal – and businesses must be aware of their requirement to constantly evolve.
Understandably, many retailers have been struggling with the logistics of heightened demand and reduced operational capacity. For retailers to meet these challenges head-on, whilst delivering on their service promises, eCommerce firms must improve their digital retail infrastructure and streamline operational processes as much as possible. I would encourage companies to take the time to use feedback as a way of identifying weak points in the end-to-end customer journey and how the pandemic impacted their organization.
By taking the strategic steps to streamline operations, fast-growing firms can maximize the opportunities created by our current environment. I believe that superior DTC models based around agility, extensibility and speed are now emerging that will cut into market share and, with time, will become the new market leaders. But, have no doubt, their successful consumer-focused strategy and exceptional online delivery models will be built on top of strong foundations – and accelerated use of automated workflows.
Contributed by Derek O’Carroll, CEO, Brightpearl. Brightpearl is a retail operations platform for retailers and wholesalers with a clear mission to automate the back office so merchants can spend their time and money growing the business. Brightpearl’s complete back office solution includes financial management, inventory and sales order management, purchasing and supplier management, CRM, fulfillment, warehouse management and logistics.