Technology & Engineering May 13, 2021
Delivering consumer loyalty with a winning fulfilment strategy
Order fulfilment is a vital part of digital commerce. While it may not be the most glamorous aspect of the business, it has a direct impact on customer satisfaction and the bottom line. Expectations around the speed and cost of shipping are constantly shifting thanks to the likes of Amazon Prime, ASOS, and AO.com, who are offering increasingly speedy free delivery.
When customers place orders, they want it now. For sellers, fulfilling those demands is easier said than done. Dropshipping and technology integrations help to manage the number of moving components involved in getting goods in the hands of customers, fast and effectively, enabling brands to create stronger connections with customers; increasing the likelihood of repeat business.
How shipping drives sales
A sound e-commerce shipping strategy can play a major role in driving conversions in today’s fast-moving retail landscape. E-commerce and shipping share a synonymous relationship, yet shipping often becomes an afterthought for busy retailers. For customers, a brand’s shipping experience can carry just as much weight as the product it sells, or the marketing doing the selling. Lacklustre delivery options are the number one reason customers abandon carts and, according to data from 3,000 consumers surveyed globally, customers expect online purchases to arrive fast and they don’t want to pay for that convenience:
- 77% have abandoned a purchase due to unsatisfactory shipping options;
- 50% altogether avoid retailers that do not offer free shipping;
- 84% have specifically made a purchase because shipping was free;
- 30% always increase the size of their orders if it qualifies them for free shipping.
Within the same study, an interview with 800 merchants revealed 47% were unaware of their online cart abandonment rate, let alone the percentage that’s caused by shipping. If merchants can’t connect the dots between dissatisfied customers and shipping operations, how can they make the changes needed to improve customer experience and recoup those lost sales?
Dropshipping: a solution for expanding retailers
It’s never been more important to perfect the functionality of storing inventory, picking and packing products, and managing couriers; a smooth-running process behind the scenes translates to customers. Retailers must not lose internal momentum amongst industry disruption or while pursuing new business ventures.
Dropshipping provides a solution for established e-retailers to supplement their existing operations. The order fulfilment method does not require a business to keep products in stock. Instead, the storefront sells the product and transactions are sent to a third-party supplier or manufacturer who then ships the order to the customer. With minimal business overhead and commitment comes with a number of strategic perks:
- Mitigates risk for businesses to test new markets. Retailers can conduct their own qualitative research by launching trial products on their storefront; gaining customer insights and a more accurate estimate of what quantities to buy for the initial stock run.
- Shields overselling and sold out signs during unpredictable market fluctuations, such as seasonal periods. Retailers can cut costs by only stocking inventory they know they’ll sell, and satisfy unexpected demand with dropshipping.
- Avoids extra fees for storing and shipping high-maintenance products such as large, heavy, fragile or valuable items, as well as items with special conditions such as needing to be kept frozen or away from light. Unless a company specialises in this type of product, it will make more business sense to offer them via dropshipping.
Implementing dropshipping with Bonmarché
British clothing retail chain Bonmarché is a longstanding client at Dept. Initially, we collaborated to re-platform its commerce solution onto Salesforce Commerce Cloud, aiming to advance its multi-channel offering and digital customer experience with a loyalty programme. Recently, Dept initiated dropshipping to underpin Bonmarché’s growth plans.
Bonmarché has launched e-concessions on its website, which are sold alongside thousands of its own-brand products, categorised within collections. Unlike the marketplace model, concession brands are not given special control of how their products are displayed, as Chris Clark, Senior Technical Lead at Dept, explains: “All products are listed identically on Bonmarché, but these new labels will reach consumers through a different route. Bonmarché manages the sale of the products and all customer interactions, but will never physically interact with the stock; instead, a third-party dropshipping provider looks after the inventory and dispatching.”
The whole process is automated and is simple to set up. The solution was implemented with a very light touch, enabling Bonmarché to dip its toe in the new business model. “We received the 100 or so new products at the start of the week and were able to push the dropshipping solution live for the weekend,” added Clark. “An attribute was added in the codebase to identify the items as needing to be dropshipped and communicated with the provider. There were hardly any changes made to the customer-journey or customer-facing part of the website. If a customer selected one of the concession products, they’ll receive a message in the checkout process explaining that some of the items will be dispatched by a third party, and arrive separately.”
The dropshipping model has already gained popularity across the retail spectrum. Legacy retailers like Bonmarché are using it as a strategy to widen its appeal amongst new demographics by offering new product ranges. Start-ups are leveraging dropshipping as a way to quickly hit the ground running with less overhead. Clark expects the major retailers that are snapping up new brands and rapidly expanding their portfolio will increasingly rely on dropshipping. It will offer them a centralised commerce solution, where they’re able to seamlessly connect orders throughout multiple warehouses.
Tracking is more than a status update
Dropshipping is just one way for retailers to ensure they’re providing a premium shipping experience through order accuracy and timely delivery, but regardless of how products are distributed, tracking shouldn’t be overlooked. Order tracking lets customers know a business is both dependable and trustworthy, both of which are crucial to customer retention and helps minimise customer anxiety and buyer remorse. A mobile-friendly strategy is preferred: 57% of UK customers are receptive to tracking notifications by SMS, with another 35% preferring to use the courier’s app, and 17% preferring Whatsapp. The majority (54%) also use email to track shipping notifications.
By offering tracking, retailers are able to gather opt-in data, upsell and improve the customer experience with targeted product recommendations or discount vouchers. A lot of the pressure gets relieved from the customer service team by implementing an order tracking system that otherwise would be spent with phone call enquiries, questions and complaints. By clearly communicating shipping delays, ideally at the onset, you’re able to manage expectations and customers are more likely to show their understanding.
Customer service equates to customer retention
Disruptions in the retail industry have made shoppers savvier to digital commerce. They’re aware of the choices available to them, and are making purchasing decisions based on practical components, placing order fulfilment at the heart of customer experience.
Offering complimentary or expedited delivery may help to generate sales initially, but failing to deliver on this promise will just as easily stop them in their tracks, while leaving a bad impression that may not be retrievable. This rings true for Peloton, who’s now receiving backlash for overselling stock and leaving customers waiting for months on end. Unhappy customers who have experienced poor service will not only become ex-customers, they often tell other people about it. With more of these stories hitting the headlines, brands are re-evaluating processes and introducing technology to relieve fulfilment pressures and deepen the customer experience.
The role of delivery is critical to winning customer loyalty. Research shows that a positive delivery experience incentivises 61% of customers to shop with an e-commerce retailer again, and 49% of shoppers will select an online retailer over another if they offer a loyalty programme featuring free next day delivery. With this in mind, brands like Gap have introduced a tiered approach, with a points system to reward loyal shoppers across its group of brands. To coordinate this customer-centric approach, and avoid shortcoming, a single customer record is key. This involves connecting internal operational systems with CRMs and customer-facing platforms.
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