By: Tobias Buxhoidt, CEO and Co-founder at parcelLab
The COVID-19 pandemic has resulted in a huge shift in consumer behaviour – the confinement of lockdowns and restrictions meant consumers were forced to shop online, with a recent report by PwC predicting that these changes in habit are set to become permanent. The report also reveals that some of the most effective influences on generating brand loyalty include reliability, customer service and personalisation. In such a highly competitive industry it has therefore never been so important to differentiate from existing businesses; the key to this is to prioritise filling the experience gap that exists between consumers and businesses post-checkout. Currently, the customer experience offering from e-commerce businesses is not up to scratch and fails to meet the ever-increasing demands and expectations of consumers.
Consumers need to be offered greater choice and control post-checkout:
A new report, conducted by parcelLab, analysed the performance process during the checkout of the UK’s top 50 DTC brands and revealed some striking insights. The analysis highlighted the shortcomings of the brands in offering a choice to the consumer, with only 20% offering a choice of carrier, just 38% offering next-day delivery, and only 10% offering a click & collect option. Greater control and choice over carrier and delivery options results in happier customers – and with many now returning to the office and spending less time at home, collection services are an essential option that is currently not widely offered.
Businesses spend significant resources on customer acquisition, and rightly so. But generally, once checkout is complete, communication with the consumer from the business side drops off. This is a big mistake. Every package matters because every customer matters. This alone is justification enough to ensure the customer experience from start to finish is refined, personalised, and transparent, in order to maximise chances of reengagement. Each stage of the journey is an opportunity for e-commerce businesses to differentiate themselves from competitors and leave a lasting positive impression in the mind of the consumer. There should be a greater focus on not just acquiring the customer initially, but going beyond, to build loyalty, trust and reliability to maximise the chance of repeat custom – to create a cycle of engagement and re-engagement between brands and consumers. In reality customer experience matters just as much as the product; it is vital to build these experiences and create a lasting positive feeling towards the brand. This experience is what your brand will be remembered by and will engender stronger customer loyalty in the long run.
Alleviating customer concerns while avoiding barriers to checkout:
Despite DTC retailers having complete control of their customer journey, there remains a huge opportunity for them to improve the experience, while in the process removing barriers to checkout and reducing the likelihood of cart abandonment. The customer should be put at the heart of the entire process and not be left in the dark at any stage; this means taking seriously the need for transparency and providing a first-class customer experience –which we, at parcelLab, refer to as Operations Experience Management – that involves the combination of operational processes with customer experience, enriched further with data, relevance and personalisation.
Our research into the checkout services offered by the UK’s major DTC brands identified the main obstacles to quality customer experience including whether there was an option to checkout as a guest, shipping costs, and whether other methods of payment were available (such as buy now, pay later). The report found that while many did offer free shipping, 72% of the brands included had restrictions such as a minimum purchase price, with this sometimes being as high as £100. This is undeniably a huge conversion blocker, and more should be done to set realistic and achievable order values to eliminate arguably the biggest obstacle. Additionally, the report found that not one of the major DTC brands studied offered something akin to a delivery pass (for example a one-off payment for a whole year of delivery); these are a great way to create loyalty and encourage repeat custom, so this comes as a big surprise that not one brand offered this.
Another huge opportunity arises in alleviating customer concerns. With direct and clear communication between businesses and consumers, the consumer is no longer wondering where their package is or whether it is likely to be delayed. This makes it possible to provide explanations to the customer directly, easing their concerns and potential frustrations immediately, reducing the likelihood of having to contact the business. Similarly, the returns process, while often being inconvenient and slow, has the potential to be far more streamlined and transparent. That is the nature of Operations Experience Management: perfecting the e-commerce journey all the way through; it will be brands that are effectively able to build this experience that will be remembered the most and crucially returned to by a loyal customer base.
What the future holds is unclear. Perhaps the use of drones will become widespread? Maybe a consumer-to-consumer returns process will become the more sustainable and efficient option? One thing that is for certain: the customer must be at the heart of everything. Curating the customer experience is the key that will drive brand loyalty and trust, helping to differentiate your business in a highly competitive market.