Study: Delivery issues could cost retailers more than $1.5 billion in lost revenue
A poor retail experience, especially those connected to delivery issues, could cost retailers big time this holiday season.
Almost half (40%) of shoppers said delivery is the single most decisive factor in the shopping experience. Yet, delivery issues could cost retailers $333 million this holiday season, not including an additional $1.5 billion in potential lost revenue from shoppers who won’t return after a poor experience.
This was according to “Commitment, Communication and Control: The Modern Customer Delivery Imperative,” a report from Convey. Projections are based on one package per order at an average weighted order value of $78.20.
According to data, a variety of issues could impact retailers delivery efforts. Incorrect addresses among 17.5 million orders could cost retailers $162.2 million. Retailers that experience 11.8 million “return to sender” orders could lose $102.5 million.
Meanwhile, damages among 7.8 million orders could cost retailers $67.7 million. Delays on 48.9 million orders are a $1.2 billion lost revenue opportunity, and failed delivery attempts for 46.9 million orders could cost companies $368.5 million.
Consumers are also holding retailers accountable at every stage of the delivery process. For example, 32% are more likely to blame the retailer for a failed delivery, and 95% expect retailers to contact them if an estimated delivery date changes in transit.
A majority (90%) expect some form of action or compensation for missed promise-by dates, and 41% want to be notified immediately when a delivery exception occurs, preferring e-mail notifications over all other channels.
More than half (60%) of those shopping after Cyber Monday said delivery date was their biggest concern, and 98% want to self-serve or interact with a retailer directly to resolve delivery issues. Those aged 18-34 are 35% more likely to prefer options such as pick-up lockers and holding a shipment at a terminal.
“With every mediocre or poor delivery experience, retailers pay the price in returns, customer service utilization and lost customers,” the report said.
Bringing Your ‘A’ Game This Holiday Season
Brick-and-mortar stores are developing more creative experiences to get customers into the stores this holiday season, but the big question is: Will employees be able to execute? Pressures are at an all-time high to deliver results, as the meteoric growth of online sales throw the rapid decline of physical sales into sharp relief. It is make or break time, with NRF estimating that 69% of Americans plan to shop during Thanksgiving weekend. What exactly can retailers do to capitalize on this critical sales opportunity?
One goal, one vision – everywhere
Everyone — from the stock room to the registers — needs to unite around the vision: What exactly does the ideal customer experience look like? How can we make our products/services exciting for customers? Concentrate on bringing out the best in your team, especially customer-facing employees who have the toughest job. Providing sufficient training in new offerings/services and products will help them realize their real role: being brand ambassadors, rather than crowd marshals.
Every team member should understand the value of their role and how they can influence the customer experience. This is more important than ever in the new store layouts, where staff serve as guides, personal shoppers and consultants. Take the time to educate temporary seasonal staff about company culture, merchandise and store layout to embed them in the team. Experience has shown that informed staff who themselves feel special will pass on that warmth to customers.
Holiday take-away #1 – Happy, motivated and informed staff equal happy, informed customers
This time, it’s personal…
Personalized experiences may seem like an impossible dream inside big chain stores, but ensuring customer-facing employees have the right skills and attitude can make all of the difference.
Take Walmart, for instance. Anticipating long lines and frustrated customers, Walmart has “holiday helpers” in all of its stores for the season whose primary job is to direct customers to the shortest lines, hand out candy canes and even make quick runs for forgotten items. Their ability to truly ease some of the customer pain will ultimately boil down to how effectively they exude a helpful attitude and have the right kind of training to appropriately do their job.
Meanwhile, Lowe’s is rolling out its new Smart Home Technology store-within-a-store pilot to more locations, providing customers with a dedicated space to test various smart home products. These pop-up stores are a great way to showcase specialized merchandise and generate additional revenue, but can quickly fail if knowledgeable staff aren’t in-place to field questions, troubleshoot problems and discuss the finer details.
Invest in employee training so all retail floor employees are armed with everything they need to cross sell and link sell to help create more personalized experiences for customers. Simple gestures, such as a heartfelt recommendation to a customer shopping with their family about visiting another department, can lead to unexpected sales.
Back this up with additional customer services. Traditional extended opening times are a given, but same/next-day click and collect or order in-store and home delivery will decrease reliance on the over-stretched postal service and give shoppers a chance to bypass the crowds. Success isn’t solely dependent on the store teams; the whole ‘machine’—from shop to warehouse floors—needs to be tuned in and aligned.
Holiday take-away #2 – Physical stores can win by making the experience personal
The Commander in Chief
Active and dynamic leadership is essential. The department head or store manager is part conductor, part quarterback, constantly taking the pulse of the team and customers to adjust course quickly to maximize the customer conversion rate from footfall to purchase. When the lines get too long, how can they be shifted or moved through the checkouts quicker? Is the ratio between selling and restocking staff correct? What are the issues that are diverting sales?
Scenario planning with the whole team ahead of time will ease conflicts. When staff understand the need to be flexible and operate in a number of different areas, it will not come as a shock when they are asked to do so on short notice. Leaders must strike a fine balance between maintaining an oversight role of all operations and getting into the weeds when it’s necessary. Nothing affects morale in a busy team more than a leader who doesn’t roll up their sleeves.
Holiday take-away #3 – Modern retail leaders need to balance performance and preparation
The review loop
Creating a nimble, customer-oriented experience requires a steady stream of input from the center of the action. The disciplined sequence of Planning, Doing and Reviewing to create a robust feedback loop enables all staff to get involved and helps to establish a culture of accountability rather than blame.
Foster a culture where it is ok to fail, backed up with the ability to quickly fix any problems. Giving a voice to the front-line staff reassures them that their contribution is valued and can inspire them to give their best. Encourage all employees to take pride in their observations of what’s working and what’s broken, and use the intelligence to fine-tune and upgrade the customer experience. Transparency can help create a roadmap for the future that everyone can stand behind.
Holiday take-away #4 – Learn and adjust in the moment based on customer and team feedback
Seize the holiday – carpe ferias!
With e-commerce sales over holiday periods growing 20% between 2015 to 2016, and gaining every year, the clock is ticking for in-store retailers. Customers simply won’t suffer poor experiences in-store; the few opportunities that exist to ‘wow’ your audience must be grabbed. It’s time to bring your A game…
Andy Morris is VP and head of Egremont Group’s global retail practice.
Study: Identity theft worries won’t damper holiday shopping
Even concerns about identity theft and fraud aren’t enough to curb customers’ holiday shopping plans.
While 62% of consumers are very or moderately concerned about identify theft or fraud this holiday season, a large majority (73%) said concerns over recent data breaches won’t affect how they’ll go about their holiday shopping, according to “Discover’s 2017 Holiday Shopping Survey.”
When it comes to protecting themselves from identity theft and fraud, a large number of consumers are taking proactive steps. For example, 62% of consumers monitor financial statements for suspicious activity; 41% monitor their credit reports; 38% use a credit card with built-in security features, and 18% subscribe to an identity protection service. Only 9% report not doing anything to guard against identity theft or fraud.
Baby boomers (ages 55 and over) are the most diligent when it comes to protecting their identities, as 69% say they monitor their financial statements, and 45% use a credit card that has built-in security features. By comparison, 56% of millennials (ages 18 to 34) and 62% of generation X (ages 35 to 54) monitor their financial statements. Meanwhile, 32% of millennials and 37% of generation X use a credit card with built-in security features.
Credit cards are expected to be the most popular method of payment during the holidays, as about a third of survey respondents (32%) said they plan to use credit cards most often when making holiday purchases. That’s followed by 29% who said they’ll mostly use debit or prepaid cards, and 23% who plan to use cash most often. Just 5% expect to use gift cards most often, and only 2% expect to mostly write checks.
Of those who favor credit cards for most of their holiday shopping, 42% cite earning credit card rewards or points as the primary reason why. Other leading reasons to pay with a credit card include convenience, 28%; the ability to track spending (18%); and not having enough cash on hand (12%).
Most credit card holders (70%), indicate that they prefer to earn cash back rewards when using their credit cards for holiday purchases. This is compared to 14% who would rather earn travel rewards, such as airline miles or hotel points, the study said.