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Why this Christmas is a big opportunity for online retailers

Australians are shopping online more than ever and in the lead up to Christmas online purchases are set to hit unprecedented levels.

As the explosion of online shopping continues, the delivery industry is going to increasingly rely on technology to help them improve the customer experience. Our internal data shows:

  • The average online purchase spends 2.6 days with a courier before the initial delivery attempt is made
  • Up to a third of the time it takes a parcel to reach the customer’s door is time spent in the warehouse. It takes an average of 24 hours from the time an order is placed by a customer to be picked, packed, labeled and handed over to a courier for delivery.
  • Around 17 per cent of all deliveries are late. Coincidently, 17 per cent of all deliveries end in a bad experience.
  • Aussie retailers could do more to drive adoption of express shipping options with only 17 per cent of all orders being shipped via an express or overnight delivery service.
  • Shipping costs are prohibitive, with the average shipping cost sitting at $12.10 per order for Aussie retailers.

These figures are all set to increase this Christmas selling season as more parcels slow down courier networks. This presents a compelling challenge for Australian delivery providers as more transparency means the accuracy of delivery lead time estimates and tracking events is critical in keeping customers happy.

We predict that more shoppers will search and purchase presents on their mobile devices (on the way to and back from work on public transport) this year. This is usually the time that is spent catching up on social media and emails – and where retailers are focusing their ad delivery.

We saw a teaser of the increased activity only last month during the Black Friday/Cyber Monday shopping season. Order volume received over the cyber weekend saw Shippit more than double its biggest-ever shipment period (in the same week last year).

What this means for retailers

Being in the industry for several years now, I can guarantee you that there will be at least one news story in late December about Australians missing out on receiving their Christmas parcels (and sad gift recipients).

There isn’t one sole party to point the finger at. It could be the shopper that waited until the last week to purchase the present (Christmas falls on a Monday!); the store that didn’t prepare for demand of a product; or the courier (Santa) that didn’t put enough trucks on the road. Or a combination of the above.

When the infrastructure is stretched to breaking point, it becomes impossible to deliver good service. Shopper anxiety during these periods is increased, and along with the increased order volume, the number of customer queries multiplies exponentially.

This could mean that the average retailer could be faced with four times (!!) the amount of delivery queries and complaints during the end-of-year rush.

This results in retailers and couriers being overwhelmed and unable to give accurate information on the status of a parcel, potentially damaging reputation and declining the customer’s experience.

Amazon has changed the game. Customers now expect express shipping to be the norm and many assume that most retailers are equipped to deliver this service (while being flexible and at a good price).

As online merchants continue to drive shoppers away from brick and mortar stores, fast, easy, and flexible delivery options are now mandatory – there is no alternative solution. It’s essential Aussie retailers be a first-mover rather than a fast follower.

As Aussie shoppers get more comfortable with purchasing goods online, the last few weeks – the industry’s biggest sales period of the year – will present a lucrative opportunity for retailers.

My advice to them is to think about the entire customer journey, from acquisition to upselling whilst on-site, but more importantly, the delivery journey, one of the least focused on aspects of the online customer experience.

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