By Ken Fleming, president of Logistyx Technologies.
Getting the ecommerce delivery experience right is crucial today, and a key aspect of this is allowing shoppers to choose when and how their order is delivered. Research suggests approximately 70% of consumers now want a wider choice of delivery options.
In fact, there is evidence that one in five online shopping baskets are abandoned because customers are dissatisfied with the available shipping options or costs. In the fashion sector, more than a third (36%) of potential orders are abandoned because delivery times were considered too slow.
Offering greater choice is becoming increasingly important. Take the example of an online fashion retailer: Shopper A wants to order an outfit they need urgently for a party - they will demand guaranteed next-day delivery and won’t mind paying a premium. Shopper B doesn’t need the outfit quickly and will be happy with free standard delivery as long as the order arrives in seven days. Shopper C might prefer a weekend or evening delivery so they can be home when it arrives. Shopper D wants the outfit sent as a gift to their sister in Germany, which will require cross-border delivery. Finally, Shopper E might prefer the parcel to be delivered to a convenient pick-up point near his or her workplace.
The challenge for any retailer is that no single carrier will be able to fulfil all of the delivery options it needs to offer across all geographical regions. Usually, the retailer will have to use multiple carriers to do this. And that’s when things get even more difficult - because as well as wanting more choice, today’s shoppers want three other things as part of a satisfactory delivery experience:
They want to know the order is going to arrive at the correct destination, at the promised date and time in good condition.
They want to receive updates on their order’s progress until it arrives. This includes, for example, an initial order acknowledgement with a confirmed delivery date/time; an email or text when the order is packed; one when it leaves the warehouse; and another when it’s in transit. And if it’s going to be delayed, of course, they want to know well in advance.
Good customer communication throughout the fulfilment and delivery process sets clear expectations, reducing customer anxiety and boosting customer satisfaction. It also goes a long way to minimising the order cancellations.
3. Flexibility to change delivery options
Increasingly, customers now want the option to change delivery date or mode after the order is placed. They might want to change the date because it is no longer convenient – or they might want to pick the order up from a store.
For the retailer who is working with multiple carriers, trying to meet these demands is a huge challenge. For a start, in many cases the retailer doesn’t have a satisfactory way of tracking an order’s progress as it moves through each carrier’s distribution network – and no clear way of receiving alerts when delivery delays or problems occur.
Lack of visibility and tracking
Often, the retailer is relying on the carrier management software within their Warehouse Management System, which is typically ill equipped to track deliveries from multiple carriers. Or, the retailer is using individual carrier-supplied systems, which only provide visibility into their own networks. And even carrier-supplied systems may not provide the level of visibility required by the retailer, thereby forcing the retailer’s staff to track order shipments on multiple carrier-supplied platforms.
In an ideal world, the retailer would have an end-to-end view of the status of all deliveries as they move through the supply chain via different carriers. But to do this, the retailer would have to undertake expensive technical integrations between multiple carriers’ IT systems and the retailer’s own system of record.
This is an onerous task, because different carriers use different communications protocols with different terminology to describe the thousands of scanning events (shipment status messages) a shipment goes through in its journey to the customer. For example, where one carrier might use the term “in transit,” another might use “on vehicle,” and a third might use “OFD” (Out For Delivery). The retailer needs to be able to translate and map these different carrier messages so that their own systems can make sense of them.
The lack of clear visibility into the delivery journey means that often, the first time the retailer actually knows an order has not arrived safely at the customer destination is when they get a WISMO (Where Is My Order) call from the customer.
By then, it’s usually too late because the customer is already irritated. Not only has their order not arrived on time, but they were unaware of the delay and they’ve wasted time contacting the retailer’s customer service to chase it. At best, this customer might ask for a refund of shipping costs. At worst, they will never place an order with the retailer again.
The beauty of a multi-carrier management system
This is why, now more than ever, it is important for retailers to have a multi-carrier management system that monitors the journey of all shipments across all carrier partners.
For companies that ship parcels, Logistyx’s Transportation Management System (TMS) for parcel shipping integrates with more than 8,500 carrier services globally. It captures shipment status messages from all carriers in the shipper’s transportation network and standardises them to gives shippers a complete view of where shipments are at any time.
More importantly, a multi-carrier management system such as Logistyx can be configured to send instant warning alerts if a parcel is off track or behind schedule. This allows the shipper to proactively address delivery events such as inclement weather or traffic to meet customers’ expectations and maintain delivery KPIs. If a delay is unavoidable, they can inform the customer and potentially offer to compensate them by dismissing any shipping charges.
With detailed up-to-date visibility into the delivery journey, retailers can also offer customers the flexibility to change their original delivery instructions while the parcel is en route. A customer might be able to delay delivery or re-route the order to a new destination, for example. This flexibility can strengthen the customer relationship and build retailer loyalty.
Delivering cost savings
Essentially, a TMS for parcel shipping operates according to business intelligence rules. So, depending on size, weight and value of the parcel, the destination address and the delivery preferences of the customer, the system automatically selects the best value carrier within the retailer’s carrier network to optimise costs. The system then prints the label and all appropriate documentation to meet the carrier’s shipping requirements.
By closely monitoring the performance of all carriers’ on-time delivery rates and making this data available in one place, a TMS for parcel shipping also delivers additional transportation savings. For example, many carrier contracts include a form of financial compensation in case the service level agreement is not met. Without a tool that tracks the actual service performed versus the promise, there is no way to know how good (or bad) the service has been and whether the invoice is accurate. This kind of tracking is important for recovering costs in case of deviations.
Similarly, without the necessary data to truly evaluate carrier performance, how can a retailer make informed carrier selection decisions? Obviously, they will be at a significant disadvantage when it comes to renegotiating contracts with carriers.
For retailers who want to optimise the ecommerce delivery experience by providing customers with the widest choice of delivery options as well as transparency of their order’s delivery journey, regardless of carrier, a multi-carrier management system is fast becoming an essential tool. That it may help to reduce abandoned shopping baskets and build customer loyalty - and repeat business – is a welcome bonus.