Over the past 10 years, the growth of the internet, and online shopping specifically, has steadily increased. The chart to the right (Web Sales in thousands) shows double-digit growth in Web Sales in 9 of the past 11 years with no signs of sCapturelowing down in the future.
Consumers have been increasingly looking to ecommerce as a way to shop smarter, with more options and lower costs. Companies such as Amazon, Wal-Mart, and The Home Depot are making it easier than ever to order something online and have it ready to pick up at your nearest store on the way home. Amazon is now offering same day delivery for free for Amazon Prime Members who are located near their distribution facilities. With this ever-increasing expectation from consumers for product to be delivered quickly, cheaply and wherever they want, it is ever more important for companies to reevaluate their supply chain and ensure they are setup to efficiently operate in the new E-Commerce space. Here are a few ways that customer expectations could be affecting your Supply Chain.
Customers expect to have multiple delivery options available at a low cost
A variety of delivery options has become the standard for E-Commerce businesses. For certain products, such as perishables, a customer may want them delivered same day to their front door, but for other products such as clothing a customer may be okay simply picking up the product the next time they are at the brick and mortar store. The ability to offer these multiple delivery options takes coordination from all different supply chain systems including order management systems, warehouse management systems, transportation systems and in store point of sales systems. The coordination of these systems is commonly referred to as omni-channel.
Omni-channel systems can have an enormously positive impact on a company from both a public perception standpoint as well as financially. The ability to source orders intelligently from a facility, whether it be a distribution center or a retail store, helps decrease transportation costs, which are often the highest cost in a supply chain. It also allows for positive publicity as a customer is able to choose how quickly or cheaply or conveniently they want to receive their order. Giving a customer options is often the easiest way to make a customer happy.
Customers expect for their product to be delivered on time
In this digital age where consumers seek up to minute information from free services for sports and networking, is it not reasonable to expect the same for updates around a product or service for which you are paying? When a customer selects 2 Day delivery when placing an order online, they expect that order to be at their front door within 48-hours. Failing to meet customer expectations can be devastating in today’s world. Bad publicity can become newsworthy so quickly with just a few bad reviews on Yelp or a series of negative tweets letting other consumers know how poorly a business is at following through on promises. In another light, if a company promises 3-5 day delivery and the product shows up within 2-3 days, the customer would be ecstatic and be more willing to give you return business since you over-delivered on your promise. It is beneficial to keep the following thoughts in mind when setting up your potential delivery options:
- Do everything possible to hit your promised delivery date, especially on Next Day and 2 Day shipping options
- Set up your warehouse management system to prioritize customer orders that have an earlier promised delivery date
- Under Promise and Over Deliver – Customers most likely won’t mind if you tell them delivery will take 5-7 days for “Standard Shipping”, but they most definitely will notice when the product shows up in 4 days, exceeding their expectations
- Customers expect for the returns process to be hassle free
As we transform into a more E-Commerce focused economy, consumers are buying more items without seeing them physically, which inevitably leads to a higher returns rate. Consumers are also often buying multiple sizes of the same item with the plan of returning at least one of the items. In an effort to make your company stand out from others, make your returns process simple, hassle-free and cost-effective. If a consumer has a bad experience with your returns process, it may drive them to another competitor for their next purchase.
It is worthwhile to make the customer believe you care about them, by providing services such as customized, prepaid return labels along with the shipment. This allows a customer to simply mark the item they are returning and place the box in any mailbox, this is the definition of hassle-free returns. A company can also take measure to ensure order accuracy, which will lead to a decrease in a number of returns as well. Implementing smart audit policies such as high audit percentages for new users and low audit percentages for experienced users to allow for high accuracy but also high volume . Finally, vendor compliance measures allow a company to hold their vendors to a higher standard of quality, resulting in fewer returns due to poor quality of product. Creating vendor scorecards and holding vendors accountable to your standards not only drives greater productivity from your workforce but increases the satisfaction of your customers from the quality of your product.
As you can tell, customer expectations have a major impact on how a company shapes their E-Commerce business. Without proper planning and tools, working to meet customer expectations can cause financial strain if a company is not adequately prepared. Be sure to plan ahead and have the right processes and systems in place to be prepared to meet customer expectations, especially with the holiday season around the corner.