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How to adapt your business model to an online audience

Paul Galpin, Managing Director, P2P Mailing
|Oct 6|magazine10 min read

The delivery market continues to grow apace driven by ecommerce.  Analysts predict that by 2018 online deliveries will hit 1.35 billion a year, 29 percent more than the billion deliveries that took place in 2013. The growth of the e-commerce market is giving online retailers a clear opportunity to expand their customer base across the world. However, in order to cater for this larger prospective audience, retailers need to offer greater delivery flexibility.    

The importance of a seamless delivery system should not be underestimated. Indeed our research shows that experiencing delays or delivery problems just twice or more would convince 87 percent of people to switch to another supplier. If deliveries are mishandled, new found customers can find an alternative supplier at the click of a button. And these problems are exacerbated when it comes to distribution across borders. Indeed, 61% of consumers surveyed expressed reluctance to buy from overseas online shopping websites. Clearly, more mistakes are expected when it comes to international deliveries.  So, what are the key criteria for an effective delivery and returns system and how can these be adapted when expanding internationally?

The territories that a retailer is looking to target will have a key impact on the delivery solutions offered, since consumers in different territories can have vastly different expectations. For example, unlike in the UK where pick up points are only just becoming widespread, in France pick-up points and locker boxes are a fast-growing solution representing 20 percent of ecommerce deliveries. Meanwhile, in Scandinavia pick up points are the standard form of delivery thanks to the widely dispersed population.

Reliable ‘back office’ processes, such as confirmation emails upon purchase of item, also need to be implemented as part of the overall delivery superstructure in order to satisfy international consumers. In the German market, nearly half of online shoppers regard comprehensive confirmation e-mails as the most important aspect of the delivery process, followed by punctuality of delivery.

On the subject of communication, retailers must not overlook the power social media has to hold poor delivery systems to account. Our research shows that almost a quarter (23.5 percent) of respondents said that they had already used social media to complain about services. By using social media to comment about poor service consumers are immediately broadcasting this message to followers/friends. This means that potentially thousands of prospective customers have been given a negative view of the company from the outset, with the risk that they buy elsewhere.

Online retailers are becoming more aware of the potential adverse effect social media can have on building and maintaining customer relationships. Rob Millington, Head of Couriers and Loss Prevention at on-line retailer and brand owner The Hut Group comments: “The advent of social media means consumers have a broader platform to voice their dissatisfaction should delivery services not meet required standards. When this happens, the reputation of the retailer is very much at stake, so it is essential in this competitive market place to get your delivery methods right.”

When developing a seamless delivery system in line with international expansion, there are clearly a number of factors to take into consideration. The lesson for retailers is to have a good understanding of the markets and demographics they are looking to target in addition to the broader social media dynamic. Engaging an expert partner can be valuable here.

Rob Millington explains: “The Hut Group decided to partner with a delivery expert because it provides us with a means of driving cost efficiency in an increasingly complex postal market.  I also really like that they are continually evolving and bringing new solutions to benefit our customers and keep us ahead of our competition.”

There’s no doubt that continued ecommerce growth gives online retailers an exciting opportunity to expand their global customer base, but doing so successfully requires planning and research. Rushing into global growth without the necessary preparation can backfire and become costly. An expert partner with a proven track record will have the necessary global knowledge, contacts and expertise. This helps to ensure that distribution solutions not only meet customer expectations but serve to enhance the shopping experience, thus encouraging further transactions and customer longevity.