Analyst Insight: Delivery issues are a significant threat to return on investment and customer retention for e-commerce businesses. Research shows that customer acquisition costs (CAC) have increased by as much as 60% in the past 10 years. A 2023 consumer sentiment study reported that 80% of 18-25-year-olds experienced a delivery issue in the past three months — and 21% didn’t order again after a problem.

With the aim of securing repeat business to offset CAC losses, e-commerce businesses can minimize the risk of parcel delivery problems and consistently meet customer expectations by focusing on the following steps that impact the last-mile journey.  

Integrate technology to overcome operational obstacles. E-commerce vendors that still rely on inefficient manual, paper-based processes to drive fulfillment workflows are setting themselves up for a customer service disaster, marked by order errors, duplicated data entry, delayed ship times, limited shipment visibility, and an inability to scale and grow.

By building an integrated e-commerce technology stack, online retailers can automate operations and ensure that multiple systems — inventory management, enterprise resource planning, warehouse management, customer relationship management, sales channels, parcel shipping — can talk to each other and share data seamlessly. 

Integrated technology is a must-have for e-commerce businesses in 2024, ensuring that they meet delivery promises by accelerating fulfillment workflows, increasing shipment accuracy and helping online merchants scale operations to support peak-season volumes and continued growth.

Find the right delivery mix with carriers. While carrier selection can directly impact the delivery experience, not every customer has the same delivery expectations. A recent Descartes survey of more than 8,000 e-commerce consumers found that 81% rated the security of their delivery as quite or extremely important; 22% preferred a precise delivery window over speed, and 39% prioritized the lowest-cost shipping option.

E-commerce businesses must diversify shipping services to provide a range of options that cater to a variety of delivery personas — from customers who demand precise delivery windows or budget-friendly rates to those who value secure tracking, same-day delivery or parcel delivery with a lighter environmental footprint.

With the help of shipping software that supports multiple carriers, e-commerce businesses can engage in automatic rate shopping and avoid dependency on a single provider. In the process, they can trim transportation costs while providing delivery services tailored to customers’ varied requirements. For example, online retailers might consider budget-friendly regional carriers to take advantage of local delivery flexibility and cost-efficiency.

Craft the customer journey. Keeping the delivery promise is foundational to making customers happy, driving repeat purchases, and keeping CAC in check. While there’s no way to control every factor affecting the delivery experience at all times, businesses can minimize the impact of issues by proactively managing expectations.

Sellers can improve the customer experience by promising realistic delivery timeframes and being transparent with real-time notifications when delays occur. Similarly, live customer support and branded tracking emails demonstrate to customers that their experience matters. 

Outlook: With CAC on an upward trajectory, profitability and return on investment for e-commerce businesses depend largely on a high-performing customer-retention strategy that drives repeat purchases. Given the starring role that the delivery experience plays in customer satisfaction and brand loyalty, retailers must be prepared in 2024. An integrated e-commerce tech stack that optimizes operational workflows will ensure that delivery promises are kept during peak-season spikes and beyond. 

Resource Link:

www.descartes.com