By Jeff Berman, Group News Editor · October 15, 2020
A new report issued this week by ShipStation, an Austin Texas, based provider of Web-based e-commerce shipping services took a long look at how the changes in consumer shopping habits and brand perception have changed in the last year.
Some of the main takeaways of the report, entitled “Last Touch, Lasting Impact: The 2020-2021 Edition,” which was based on survey results from more than 1,400 e-commerce customers across North America, noted how North American consumers indicated they have increased online shopping by 33% over the last year, with around two-thirds saying the majority of their shopping is handled online, due to the ongoing COVID-19 pandemic. Another finding observed that supply chain challenges, driven by increased online shopping activity, have added to the onus on consumers’ delivery experiences, with 84% of respondents saying it is what “stands out most in the e-commerce customer experience,” topping 2019’s 80% reading.
The report’s data on how the pandemic has impacted consumer shipping expectations drove home the importance of both cost and speed of shipping for them, with 97% of respondents saying shipping costs are important and 92% saying shipping speed is important when making a decision on an online purchase.
What’s more, the report also pointed out that there has been a temporary reset in how consumers view shipping speed because of the pandemic, with the window for which consumers expecting to receive online purchased rising to eight days compared to a five-day window in 2019. Taking that a step further, it found that while 79% of respondents accept slower shipping, given current circumstances, it came with the caveat that 60% said that lowered expectations and understanding related to longer shipping times are a short-term thing.
Consumers definitely have low expectations for the supply chain and delivery speeds right now—but that isn’t an excuse for retailers to slack on the customer experience,” Krish Iyer, Head of Industry Relations at ShipStation, told LM. “While some elements of the delivery experience can’t be controlled right now, what retailers can do is proactively communicate delivery updates to customers more than they did pre-COVID. Most retailers will only reach out to a customer when there has been a delivery delay, an inventory issue, or when sending that initial order confirmation email. Right now, to drive solid customer experiences and encourage repeat orders, retailers should communicate delivery information before the product is even bought. Consumers have come to terms with delays, but being able to simply promise a delivery timeline, even if it’s longer than normal, can do wonders for customer trust.”
Returns, or reverse logistics, were a key part of the report’s findings, with 54% of online shoppers indicating they are influenced by retailers’ return policies and free shipping being the top customer requirement. And 89% of respondents maintain that retailers should have a free returns policy, which was down from 94% last year. A touch less return policy was also preferred, with 85% requesting a self-service process that requires no contact with customer service, with 67% preferring mailbox drop-off and 66% preferring porch pick-up.
As to whether things like mailbox drop-off and porch pick-up could be viewed as potentially permanent, ShipStation’s Iyer said it goes back to necessity being the mother of invention.
“I believe some of these changes are permanent,” he said. “For many years, customers found the mail-in returns process to be awkward (they still do). Whether it is finding packaging, printing a label or contacting the retailer (many of whom actually want some friction in the returns process), consumers will typically opt for in-person options. COVID-19 forced a change in behavior to do these tasks at home and overcome some of the barriers associated with mail-in returns.
Since this is a fundamental change in behavior to overcome these challenges, Iyer said he believes many consumers will permanently change their habits to initiate returns from home.
“Retailers who invest in tools that allow the consumer to initiate returns easily, whether with an RMA (return merchandise authorization) process and/or the return shipping label, as well as making packaging easy, will be the long term winners,” he said.
Other key findings in the report were:
79% have no preference when it comes to which carrier delivers their order; 80% of consumers believe that it is ultimately the responsibility of the retailer to ensure products are delivered on time and as expected; 90% of consumers saying a bad shipping experience negatively impacts their overall shopping experience and 87% say that it makes them less likely to shop with that retailer again in the future; 93% of shoppers say that if a retailer acknowledges a poor delivery experience, they would still shop with them in the future; 60% say that retailers offering discount codes for future purchases will keep them coming back. –79% agreeing that their experiences this year have increased expectations around brand communications when it comes to delays or cancellation updates; and 89% expect brands to proactively address potential shipping delays prior to checkout When asked what are the biggest supply chain challenges, due to the sharp increases in online shopping, Iyer said that he believes the biggest supply chain challenges are ones yet to come, especially when it comes to long term inventory planning and returns.
“Consumers are ordering earlier to shop for the holiday season, partially due to a real fear of inventory availability,” he explained. “This will have long term repercussions across the supply chain as retailers work with their suppliers and wholesale distributors over the course of 2021, as it puts a real strain on being able to appropriately forecast true demand in the coming months. Additionally, returns are a potential challenge that no one is discussing. The fact that people are ordering earlier could translate to an earlier returns cycle, thus meaning that products can go back into stock and be sold quicker again during the same holiday sale cycle.”
October 15, 2020