Analysis

Opinion: 4 Steps to prime retail success

Amazon Prime has changed the way consumers shop and retailers deliver for good – but how can others emulate their success? Carl Hartmann, co-founder and CEO of Temando, shares his views.  

There’s no denying that Amazon Prime has revolutionised the way we shop thanks to its successful model of free premium delivery and highly anticipated members-only website and in-app sales events. As a result, consumer expectations of what constitutes a top rate online shopping experience have changed for good. This challenges even the very best retailers to re-think how, like Amazon, they can use shipping and fulfilment to their full advantage. Temando’s 2017 State of Shipping in Commerce report brings to light the various opportunities that these kind of high quality shipping and fulfilment practices can create. In this article, we consider four of them:

1.    Shipping to convert

According to our research, 45% of high-spending British shoppers state they prefer marketplaces like Amazon’s due to better delivery options – and the reason Prime in particular, has been so successful is that it promotes convenience above anything else. To compete with this, retailers need to be aware that different consumers have different delivery needs, so offering more shipping choices will have a large impact on conversion. According to our findings, 54% of shoppers will go straight to a competitor when a shipping option they seek is unavailable. As such, retailers need to think seriously about how to make deliveries as convenient as possible for customers to cut cart abandonment right back.

2.    Shipping as customer service

We have found that close to 80% of British shoppers feel shipping costs are too high. As a result, retailers must find a way to demonstrate the true value of shipping services to their customers. This is an opportunity for retailers to merge their creativity and technology and, in so doing, create a new benchmark for their own customer service. For instance, they could find a way to over-exceed customer’s expectations and get deliveries to customers sooner than they expect.

Keeping post-purchase communications up by providing tracking updates of deliveries via SMS, WhatsApp or Facebook Messenger updates will help manage customer expectations.  Empowering customers to track their own orders is a great way to cut down on calls or emails to customer service departments and a superb way to prevent frustration building up. However, our research suggests that just 15% of UK retailers offer text message updates and only 3% offer updates via Messenger.

Finally, retailers should take a look at their returns process and make sure that it is seamless and requires minimal customer effort. By providing these value-added services as part of the shipping experience, retailers showcase to customers the true value of shipping which will boost retention and encourage repeat purchases.

3.    Fulfilment as a cost saver

Over 30% of UK retailers surveyed for our report admit that shipping and fulfilment automation, as well as multiple carrier access, present challenges. While shipping is traditionally regarded as a loss leader, it doesn’t have to be this way. By leveraging shipping software, it is possible to take advantage of the strengths of various carriers based on the type and location of delivery will ensure that you’re getting the best service for your customer at the best price for your business.

4.    Shipping and fulfilment for growth

With the uncertainties that followed on from Brexit, the way in which UK retailers do business in Europe may alter, and changes may be afoot for EU retailers operating in the UK too. The report shows that while 60% of UK retailers look to expand into new markets with international shipping, a third struggle with the challenge. Before embarking on a cross border activity, think about how you can improve your domestic shipping and fulfilment processes so that you’ll be in a position to scale quickly as part of your global expansion. Having the ability to close the gap between retailer capabilities and evolving shopper expectations in an agile manner will set you up for success.

With 76% of shoppers stating they’ll shop with a retailer again should they experience great shipping, online retailers need to acknowledge and act on the fact that shipping and fulfilment is a linchpin to their business. While Prime deals can sway even your most loyal customers, there’s no reason you can’t combine your unique brand offering and innovative shipping and fulfilment as a point of differentiation against market disruptors like Amazon.

Download the State of Shipping in Commerce report to find out more about what shoppers want, and what retailers need to do in this fast-moving retail world.

Carl Hartmann, co-founder and CEO of Temando

Image credit: Temando and Fotolia