Consider the last time you, as a shopper, used your mobile device to order something—a ride, food or stream a movie. Chances are that interaction only took a matter of minutes—maybe even just seconds. As fast as you can tap a finger on a Buy button, any item can now be yours. Shoppers’ definition of “fast” is rapidly changing. We now live in a mobile, one-click world where shoppers expect immediacy, great service, fast delivery, responsiveness and transparency.
The rise of these experiences has conditioned shoppers to expect instant gratification, and nowhere has this expectation reached its peak more than in the delivery world. In the past year alone, Amazon trail-blazed through delivery expectations, setting the norm for shoppers to grow more accustomed to two-day delivery. This has left shoppers less and less impressed by shipments that take any longer to arrive on their doorsteps. In fact, according to a recent consumer survey byDeloitte, just 42 percent of consumers characterize three- to four-day shipping as “fast”—down 21 percentage points in just one year.
Instant gratification may be the new expectation, but most retailers are struggling to keep up. The reality is the challenge to sustainably satisfy these demands is only getting more difficult. The business impact of not addressing these expectations head on is immense as millennials and centennials, whose demand for speed is even higher, move into their prime buying years.
Peak Volume and the Impact on the Customer Experience
There are tens of millions of packages in transit today across parcel, LTL and white glove. Based on Convey’s analysis, approximately 10 percent of those packages are in some form of distress at any given time. This distress most often comes in the form of package delays, damages, address issues or missed delivery attempts. The fact that a shipment is in distress is mostly unknown to both the retailer and customer. That’s multiple millions of shipments, per day, that are leading to poor customer experiences and churn for the retailer.
The 2016 holiday season demonstrated how a steep increase in e-commerce orders can lead to retailers and carriers scrambling to fulfill these orders within guaranteed timeframes, most of which were not even as short as two days.
Starting with Thanksgiving, we’ve seen the percentage of shipments with carrier-reported issues steadily creep up from 7.6 percent the week of Thanksgiving to a peak of 12.5 percent on December 11th. As of December 22nd, on-time rates hit an all-season low, with only 74.3% of parcel shipments being delivered on time (meaning delivery occurs either on or before the carrier-provided estimated delivery date) with only a few days to go before Christmas. Based on carrier data missed delivery attempts were the largest contributor to this spike followed by delays, both weather-related and otherwise.
An increase in negative delivery feedback only validates that these missed expectations are indeed disappointing shoppers and affecting loyalty. In fact, the number one customer complaint, representing 40% of all negative feedback in the final week before Christmas, was delays.
Despite the rise of on-demand delivery couriers and the prospect of drone deliveries, adoption of “instant” delivery options is still relatively low. So, the most important thing retailers can do to appease speed-hungry shoppers is to ensure they set the right delivery time expectations and offer a variety of delivery options.
Retailers Must Be Better Communicators
As consumers, one of the reasons we are drawn to instant services like Uber, is the ability to track how close our ride is to arriving. This non-verbal communication sets the stage for our expectations about when our package will arrive. We are excited if we see a package will be early and likewise are disappointed when it looks late, even more so if we paid for it to arrive on time.
Providing an easy, real-time tracking experience is absolutely table stakes today. However, a tracking experience in and of itself is insufficient. The data and information that gets communicated to shoppers via carrier tracking pages or skinned versions of a carrier’s tracking API are often difficult to understand, incomplete and imbued with shipping industry jargon.
Below are four keys to effective delivery communication that will help retailers set the right expectations to keep shoppers happy:
1. Know what is going on in your carrier network. If you are experiencing lower than normal on-time rates, make an effort to communicate pre-purchase that current shipping estimates may be longer than normal.
2. Use the best data. If your tracking page is merely a branded version of the carriers’ page, you are missing the data required to actually improve the experience. Deeper integration beyond the tracking API is required to truly understand what is going on, how this changes over time, and what actions can be taken to improve the experience.
3. Understand the psychological impact of tracking communication. If pre-purchase you committed to deliver a package by Friday and the shopper opens a tracking page to see an estimated delivery date of Thursday, delivery expectations have been reset. If the shopper doesn’t get their item until Friday, while technically still on time, the perception is a failure to meet the delivery commitment. This is an important nuance to understand as estimated delivery date can and does change, often without being flagged as a delay.
Understanding and communicating the difference between the committed date at checkout and the estimated arrival date allows the retailer to take credit for the wins (early arrivals) rather than just the losses (delays). Retailer’s can do this by reiterating the committed delivery date (communicated at checkout) alongside the estimated delivery date and communicate changes to the estimated date in real time via the tracking page, SMS subscriptions, or other channels such as email or Facebook Messenger.
4. Be proactive. If a shipment is already in transit the most important thing a retailer can do is to keep the shopper as up to date as possible about the progress. Retailers should be prepared to offer solutions without a customer having to ask for it. An example of this would be expediting a package or offering a refund of shipping costs, if delays seem inevitable.
There may come a day when drones and 3D printers rule the world, and as soon as a purchase is made, our packages will instantly appear at our door. Until this day arrives, retailers must work with carriers to commit to doing everything in their control to meet their commitments to shoppers.
Convey provides technology that enables online retailers to manage deliveries across carriers.