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Delivering on your promises

In this new, service-driven global market, getting delivery right can mean winning the upper hand. Jai Breitnauer explains.

By Jai Breitnauer | June 7, 2016 | News

Millennials, they’re all about image aren’t they? Masters of the selfie, with their own YouTube channel broadcasting GoPro perspectives 24/7… In a world where judging a book by its cover is becoming the norm, it makes sense that retailers will spend plenty of time - and cold hard cash - fitting out their stores and designing their ecommerce platform.

What happens at the end of a transaction process is just as important as pulling the customer in off the street, however, especially where ecommerce is concerned. There is less loyalty and more competition, so if you can’t get that thing the consumer wants to them in a timely fashion, they’ll move on to someone who can.

Stand and deliver!

My husband had his own experience of this recently. He’s about as much of a Millennial as I am Kate Moss, but he lives his life by the same principles of needing immediate supply for his constant demand. He wasn’t fazed when he entered a well-known clothing chain to buy a pair of runners, and discovered they didn’t have them in stock. I mean, they could get them from another store right? Wrong. So they could tell him which stores had them in stock, right? Wrong. Okay, could he order them? Yes! Absolutely! It would take two to three weeks, and he would have to call the store to find out when he could collect them. By the time the salesperson had finished talking, he had ordered the shoes online from America using his phone, and they arrived to our home address three days later.

Problems locating a product and getting it delivered crop up in my inner circle time and time again. Whether it’s that friend who ordered online only for her untracked product to go missing, to my sister-in-law who bought a dress from UK giant Asos because they could deliver direct and the New Zealand seller couldn’t, getting delivery right has become a make-or-break proposition for retailers nationwide.

“The retailer needs to consider how to make the experience for the receiver as easy as possible,” says Rob Levy, national marketing manager at NZ Couriers. “With an easy experience the purchaser is more likely to purchase again from that location.”

We take a look at your customer’s top five delivery pet peeves, and how to smooth them over.

Pet peeve one: You don’t deliver to my address

“Historically the courier industry was based on a business-to-business delivery model,” explains Levy. “Now, with the rise of ecommerce, there are a much higher percentage of deliveries to residential addresses. Courier companies are having to evolve to manage the complexities of the increase.”

This has involved lots of changes for the industry. Increasing fleet size to ensure greater reach across communities has been an essential move. Where a courier company doesn’t deliver to the gate there is normally an alternative. New Zealand Post, for example, offers a service where it drops off packages to a nominated point in a community. NZ Couriers offers a handy online tool so you can check if it delivers to your customer’s rural address, and if not, you can arrange for your item to be sent to the nearest branch or partner.

It’s important that you as a retailer think about what types of address you might need to make deliveries to, and work with your chosen courier company to ensure the right outcome. Nothing is more off-putting to a consumer than being told, “No can do.”

Pet peeve two: My parcel is lost

As courier companies have expanded their services to cover more locations, they’ve also had to introduce greater traceability for the products they’re moving around. Coupled with the advent of cloud-based online technology, this has had some great knock-on benefits for customers at both ends of the delivery chain – provided your courier company is prepared to pass those benefits on.

NZ Post’s CourierPost service has a fully scannable barcode tracking system. If you want your customer to be able to track their parcel you need to select this as an option. The customer will be sent an email ticket with a tracking number. At every stage of the parcel’s journey the ticket will be scanned and the details updated online for the customer to follow.

NZ Couriers also operates a full track and trace system using mobile barcode scanners and online technology. It has designed an ‘authority to leave’ barcode system to help in-store deliveries run smoother.

“An authority to leave barcode means the courier can just drop a parcel in-store without interrupting an interaction with a customer,” says Levy. “They scan the parcel so the date, time and location of delivery are captured online”.

These track and trace systems also offer the receiver greater choice and flexibility as to how they receive their product. After all, if you know where a parcel is at all times, it makes it easier to move it.

“An example of this is a ‘card left’ system, which allows receivers to change delivery points and pick items up from the courier depot of their choice – all without involving the original retailer,” says Levy. “The automated email system also allows the end customer to contact their local NZ Couriers branch for any special delivery instructions or queries.”

Make sure your courier partner offers tracking, and encourage your customer to give an address where a parcel can always be signed for, like their workplace.

Pet peeve three: I want free delivery

Large overseas retailers, like Asos, are now offering free international delivery. For many consumers, this is a major selling point. The results of a December 2011 survey, released by comScore, showed 36 percent of online shoppers in the US don’t make a purchase unless delivery is free – and a further 42 percent said it was a major consideration.

“There is no one-size-fits-all approach when it comes to free shipping,” says US based marketing manager Stephen Bulger, writing for Web Marketing Today. “What works for one merchant may completely destroy the profit margins of another.”

Bulger notes that the same comScore study showed that while 46 percent of businesses offering free shipping saw an increase in profits, nearly a third did not.

If you are an online-only store, with high domestic shipping rates, you can probably strike a deal with your courier company which makes offering free shipping to your urban customers an attractive proposition. But if you’re not in a position to do this, there are alternatives.

For a start, make your delivery costs clear from the outset. How many online baskets get abandoned because the shipping costs are higher than the consumer expects? Also, strip those costs down to make the charges as attractive as possible.

Another alternative is offering your consumer an annual price for shipping. Online marketplace Amazon offers a paid-for service called Prime. For a one-off yearly cost of around NZD$150, customers in the US and UK can experience free one-day delivery on all items. Offering a click and collect service is another great alternative. Liquorland, for example, allows customers to order online and then collect in store at a convenient time.

Pet peeve four: Whose customer am I anyway?

Put yourself in the shoes of your customer – they’ve ordered from you, they’ve paid you, but their parcel is being delivered by a third party, the choice of which they have no control over. Their item also turns up in packing branded by that third party. This might not seem important, but your own brand identity can become confused. If things should go wrong - for example, if the item is the wrong size or colour - the customer could be left wondering who to contact.

Clever software means many courier companies are now able to offer a more personalised service to high-user businesses. From branded tracking emails to personalised packaging, your courier is still your business partner but a more silent partner. This allows your customer to feel like they are dealing with you through the whole process.

Pet peeve five: Why can’t I have my parcel today?

“The competition in the retail market is increasing, therefore service and speed of delivery is becoming a much more important factor,” says Levy.

When Mighty Ape launched its same-day delivery options in Auckland, Wellington and Christchurch in 2014, it seemed logical that other businesses would want to follow. Next-day delivery services now make up the bulk of many courier companies’ work, and same-day is growing in popularity in urban areas.

If offering same-day delivery to residential addresses isn’t an option for you, you might want to consider alternatives, like the ability to move product between stores. If you own bricks and mortar in urban locales across New Zealand, then giving your customer ordering in the morning the chance to pick up a product at their local store in the afternoon may give you the advantage on the competition. Speaking to your courier company about its third-party logistics or ‘3PL’ service, especially if you also use it as your distribution centre, could give your business a genuine edge – especially over cheaper international ecommerce platforms that have lead times of at least a few days.

Where New Zealand companies can’t beat competitors on price, they can certainly step up their service levels. Receiving a product quickly and in good condition is at the top of any ecommerce addict’s wish list.

Don’t be soft – get software!

If you still pay at least one member of full time staff to manually input orders, raise purchase orders and send out invoices, you might want to consider getting integrative software.

“There is of course a cost involved,” says Andrew Glasson from Flow Software. “But the benefits will see increased efficiencies and cost savings you may not have considered.”

Flow provides integration solutions for businesses, which is especially useful for those using 3PL and couriers for delivery.

“You might want your accounting system to talk to your 3PL provider’s warehouse management system,” says Glasson. “Or maybe you need your customers’ purchase orders once processed through the ERP to raise a pick request directly. For that you need Electronic Data Interchange (EDI).”

EDI stands for Electronic Data Interchange, which Flow specialises in. It unites software between different companies which need to work together, leading to a fully integrated process.

“Here’s an example: imagine you are a company who sell BBQs to retail outlets like Bunnings or Mitre 10,” says Glasson. “Those large retailers don’t want to receive an emailed PDF invoice, and they don’t want to have to send their orders that way either.”

Flow facilitates an electronic order back into the user’s accounting package, raising a pick request automatically, and bouncing the invoice right back to the company who placed the order for immediate processing.

“This raises a lot of efficiencies and cost savings,” says Glasson. “You can fullfil or receive an order more quickly, and track your products while they are being carried by your 3PL or courier.” For some companies it has cut down the time between placing an order and recieving an order from several days to just 24 hours.

It also gets rid of some hidden costs. “Some large companies will charge their suppliers a processing fee for sending invoices via email,” says Glasson. “Also, if you’re just invoicing at the end of each month, by email or even mail, you might actually miss the cut off point and not be paid until the following month, which obviously has a big impact on your company cash flow”.

“Ecommerce has changed the game,” says Steve Chittenden from SAP in Sydney. “Digital transformation is essential. Look at Uber – they’re the largest taxi company in the world, yet they don’t own a single car. It’s all about the software. New Zealand businesses have historically under-invested in technology; retailers who address this now are putting themselves in a better position to succeed, and those that do not are unlikely to be trading in the future.”

Chittenden notes that when it comes to delivery, software can do more than just help speed up internal warehouse and invoicing processes.

“SAP provides a single platform for retailers to manage all aspects of their business, from supply chain to sales, from accounts to delivery,” says Chittenden. Some of this transparency can be made available to the consumer, and this helps with customer service and sales support.

“A consumer could check a retailer’s website, and look at stock levels in real time, for example. They could see their product being shipped and know exactly what to expect.”

This also aids real-time planning for stores. “If stock gets low, then software could automatically request items to be moved between stores,” says Chittenden. “If you use 3PL, it will also track products for security and manage the costs involved”.

Software integration allows live tracking, faster service, quicker payment and better security when moving product – all the things a modern consumer expects.

This story originally appeared in NZRetail magazine issue 743 April / May 2016

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