Contrary to what you may think, this isn’t going to be an article that shows you how to measure NPS. We will try to shed a slightly different light on customer satisfaction and look at it through the perspective of logistics. So, how does logistics affect customer satisfaction?
A satisfied customer is the key goal of those who run an online store – it’s why we try to improve all aspects of our business. A study from Bain & Company shows that a 5% increase in customer retention can boost store profitability by as much as 75%. The bad news is that 89% of customers declare they leave the competition after one bad experience.
What’s more, recent reports about Amazon’s entry into Poland herald the tightening of competition and need to invest in the professionalization of various areas e-business. These range from reliable and fast-running service to quick delivery. And the good news is that we can outperform this global giant in some elements of logistics (more about this later).
Success doesn’t end with a sale – the eCommerce customer journey
The customer’s shopping journey is often presented in a way that its goal appears to be conversion – making a purchase. But this is a very short-sighted approach – it’s as if each instance of flirting could only end with a first date, while we know perfectly well that it can lead to marriage;)
Fortunately, consulting companies are taking a deeper look at their analyses – the following example diagram shows how many departments in a company are involved in building the customer journey and affect customer satisfaction. One of them is the department responsible for logistics.
Example of an e-consumer journey. Source
Touchpoints for which logistics is responsible
#1 Information provided in real-time
Modern customers are called digital natives for a reason – they’re used to immediate reactions and communication that happens literally 24/7. They also expect that they can learn where their order is exactly at all times. A 2018 study by Dropoff found that 88% of consumers say that the ability to track shipments in real-time is important to them. However, not all stores have adequate systems in place to ensure this type of communication.
In a way, the largest courier companies took over the responsibility for it – in Poland, we know it even from DHL or DPD services:
From the perspective of branding, it’s good to communicate with the customer in addition to the automatic notifications they receive from the courier. (Moreover – these aren’t always reliable.) That’s why it’s important to integrate our system with the carrier’s system so that we can inform the customer about the status of the shipment and intervene if something goes wrong.
#2 Fast and flexible delivery
Information is essential, but even the best-informed customers will lose patience if they wait too long for a package. Currently, the standard is next business day delivery, and some companies also offer the so-called same-day delivery and additional flexible delivery options, e.g., evening or weekend courier, pickup at a parcel machine, or pickup point.
The two basic elements thanks to which we can offer consumers this type of facility are: appropriate arrangements and a contract with a courier company, as well as a very efficient warehouse. The latter depends not only on the number and experience of employees but primarily on automation – a quality and well-configured warehouse management system (WMS). Such solutions allow employees to act or respond to orders as soon as they arrive in our store. They prioritize orders by date of implementation, suggest which order picking path will be the shortest and fastest, and eliminate errors that prolong the entire process.
In the context of deliveries, markets outside your home country are also important. If you haven’t thought about it yet, you might want to consider being able to deliver products both to European Union countries and beyond. Even if you don’t carry active sales activities in foreign markets, you may want to change this soon.
#3 Easy phrases
Easy returns are regularly mentioned by consumers as one of the decisive factors when shopping online. The success of Zalando isn’t surprising as the brand built its UVP around it. Returns are particularly important in the fashion industry. Over 40% of all clothing purchases on the internet are refundable. The process must be trouble-free for the consumer, while still cost-effective for the company. And it’s estimated that 32% of online orders result in returns, and their handling relates to about 40% of the price of the goods (data refer to the Polish market).
That’s why the return process needs to be designed with the same care as outbound operations. Return shipments must be identified immediately upon their return to the warehouse and registered in the system. What’s more, products often require an additional visit to the laundry or sewing room – details such as a wash-resistant label become important here.
Another issue is the refund of products. It’s hardly surprising that customers expect their money to be returned as soon as possible. Delays in this matter can result in a significant drop in your reputation. To prevent this from happening, the refund processing team needs clear information about the status of the return. Here we again touch the issue of good system integration between sales, warehouse, and fiscal.
#4 Personalized packaging
The above statement perfectly illustrates the strong trend in eCommerce logistics: a professional and personalized approach to the experience the customer has with our brand. And as you know, the first impression sets almost every relationship, including the consumer-brand one.
Poorly packaged goods can make customers dissatisfied with their brand experience even before they look at the goods inside. It can also have a negative impact on how they perceive the brand in the future.
The second aspect of care for goods packaging is securing them. Inappropriate packaging can also cause products to be exposed to damage or creasing during transport and handling. However, it’s important to find the right balance between brand experience and cost-effectiveness. For example, the packaging is often cheaper than boxes and may be ideal for non-fragile products. An experienced logistics partner will be able to recommend packaging options and processes that ensure excellent brand experience and increase customer satisfaction.
#5 No errors in orders
All of the elements we mentioned above will lose their relevance if your company experiences frequent errors. Lost parcels, mistakes in orders, incomplete orders, and even selling a product we don’t have – these are common mistakes that occur in online stores. All of them result from chaos in the warehouse – rush, clutter or messy operations. It’s really worth looking at our logistics every now and then – conducting an audit of how the warehouse works step by step by checking, among others:
- order at the dock, i.e., whether goods are taken to the warehouse in a separate place and according to an efficient procedure;
- documentation – do we have and correctly generate the product coding system, product files, notification, etc .;
- warehouse infrastructure – are the storage shelves numbered, clean, efficient and adapted to the type of stored products;
Do all devices include order collectors, forklifts, safety sensors are functional and do not require replacement with newer models.
These are, of course, only some of the things that can be part of such an audit. Full, professional scanning goes much deeper and allows you to detect irregularities that reduce the efficiency of your logistics operations. Such expert scanning can also be part of conversations about the changes in online store logistics with an external logistics partner (3PL) who can take over the service of all the above-mentioned touchpoints (or parts – it’s up to you).