During our Brains of Bristol eCommerce event on the 17th of February where we discussed the key eCommerce trends to focus on in 2022, we were joined on the panel by Simeon Wynne, partnership manager at Huboo. Simeon provided insight into the potential of tech-focused fulfilment.
Over the last year, manufacturers and retailers alike have come to realize that eCommerce offers incredible opportunities for all, including medium-sized operations and emerging brands. According to Statistica, revenue in the UK eCommerce market exceeded £91 billion in 2021 and is expected to show a compound annual growth rate (CAGR 2021-2025) of 3.46%, resulting in a projected market volume of over £104 billion by 2025. The shift to online purchasing driven by the pandemic has removed the stigma of distant shopping. Recognizing this, many retailers have taken the opportunity to optimize their online sales by honing their offers to better match customers’ desires. Online retailers are embracing new technologies, offering UK customers more choice and flexibility than ever before, leading to an increase in sales.
Retailers of all sizes are overhauling their approach to e-commerce. Third-party logistics (3PL), B2B partnerships and the rise of D2C have advanced the ability of delivery services, resulting in faster, more accurate deliveries. The pandemic has created a surge in demand for logistics and faster dispatch speeds as consumers expected those “essential” products delivered very quickly. That changed the tone for final-mile fulfilment, and customers came to expect this heightened service level with all online shopping.
What is tech-focused fulfilment?
Tech-focused fulfilment is designed for the modern, digital age. It is built for eCommerce rather than traditional brick and mortar retailers. Tech-focused fulfilment might include an in house developed warehouse management system (WMS), dashboard software and a full suite of integrations. Retailers and D2C manufacturers often use a technology stack approach as you need a flexible fulfilment operation that can move with the times and seamlessly connect with Adobe Commerce/ M2 and the other integrations and extensions keeping your business running.
In order to establish the potential of tech-focused fulfilment, we will first establish the potential that a good fulfilment operation can have on your business, and how important it is to the ever-demanding consumer.
Why is order fulfilment so important?
You will have seen the flurry of statistics around how many people shop online and booming global online sales from the last year. For companies focused on growth, it’s no longer enough to provide customers with the right products, you must also be nailing the delivery experience.
So, let’s get some perspective on order fulfilment, and the trends we’ve seen over 2021:
- 84% of consumers won’t return to a brand after just one poor delivery experience, and 89% of young consumers are likely to promote a new brand because of a positive experience. (3PL Central)
- Only 32% of consumers are willing to wait over 3 working days for their deliveries, showing speed is still the premier consideration for many. (IMRG)
- At the same time, 48% of consumers stated they were happy to pay for convenience, showing a preference for the likes of nominated day/time delivery and Click & Collect, dispelling the myth that ‘fast’ delivery trumps all. (IMRG)
- More than 90% of US online shoppers expect free 2-3 day shipping. (Mckinsey)
- Some 62% of customers expect an exchange or refund within 30 days of purchase. Get the returns experience right and 92% of customers will return to buy again. (Shopify/Rebound)
What do customers expect from a great fulfilment experience and how does tech-enabled fulfilment help?
- Quick delivery of orders to your customers: Fast arrivals have become a fundamental customer expectation. Achieving this will result in superior ratings and increase customer loyalty. A modern 3PL will store your goods and receive orders in real-time through integrations to your platform of choice, allowing same day dispatch and fast delivery from localised warehouses.
- Convenient delivery options: Speed is important, but convenience is king. Offering options such as Click & Collect and specific time/day selection will reduce your churn rate, especially as customers move away from the home office. Software that enables various carriers, meaning you can offer different delivery options at different price points, thereby allowing the customer to choose what works best for them.
- Order status notifications: Modern consumers always want to know where their order is, and when it will be delivered to them. When you provide timely order updates, you are removing anxiety from the customer during the delivery experience – these customers are more likely to recommend your brand. Through integrations with carriers, platforms, order management systems and customer communication platforms, good fulfilment partners will have various options available when it comes to order updates.
- Error-free fulfilment: The modern consumer is unforgiving, so there’s little or no scope for error in the fulfilment process. Getting this right will build customer retention and help to achieve the desired rating across all platforms. Of course, there can always be errors, but some are now using technology to achieve fantastic results. Artificial intelligence, scanning devices, robotics and algorithmic software should help to avoid those errors almost entirely.
- Simple returns: Shoppers want to be able to return their goods without trying to get the printer they haven’t used for 3 years working, and ideally for free. There are a few options here – the fulfilment partner handles this in house, they use a returns partner, or they go for a hybrid approach. There are well-established returns companies that manage returns for high-street retail brands and large online retailers such as Asos whose services and infrastructure you can access through your fulfilment partner. Their software might go as far as allowing you to fully brand the returns portal too. The system that Asos has in place is almost unbeatable, having access to a network and technology can be a huge asset for your brand, and one not previously available for smaller companies.
What is the impact on your online conversion rate?
Rolling out a tech-first fulfilment strategy has a multitude of benefits, but which benefits specifically have a positive impact on online conversion rate?
- Low shipping costs or free shipping.
- Convenient shipping options
- Short delivery times, including next day
- Late cut-off times for shipping
- Worldwide shipping rather than restricted locations
- Fast order processing
- Free returns
- Smooth returns process
It’s crucial that you have a platform with the fluidity to adapt and evolve to meet the ever-changing environment and the increasing demands of your consumer. To learn more about Adobe Commerce and how PushON in partnership with Huboo can curate your fulfilment tech stack, contact us today.