Holidays are Critical Test of Multi-Channel Fulfillment

Consumer expectations of logistics performance are rising with their use of e-commerce.

More than two-thirds (68%) of the 600 respondents to a survey noted that their expectations for correct and on-time delivery of items they purchase online or by phone are higher during the holiday shopping season. The study, conducted by Voxware, providers of voice technology used in order fulfillment, also found that:

∙ 29% of respondents will abandon shopping with a retailer altogether if they receive an incorrect delivery just once;

∙ 62% of respondents are much less or less likely to shop with a retailer online or by phone for future purchases if an item they purchase online or by phone is not delivered within two days of the date promised

∙ 30% of respondents intend to have more or significantly more holiday purchases delivered directly to them this holiday season.

“For a retailer to be successful, it is absolutely essential to get the right product to the right customer in a timely manner,” said Keith Phillips, president and CEO of Voxware. “Delays and inaccuracies will have a disastrous impact on customer satisfaction, brand image and bottom lines. The results of this survey prove that with just one error or delay, many consumers will abandon shopping with that retailer not only online, but in-store as well.  Efficiency and accuracy are more critical than ever as consumer expectations rise in parallel with their increase in online shopping.”

Respondents answered how quickly they expect a retailer to deliver an item that they purchase online or by phone assuming the retailer is using standard shipping:

∙ 5% said 1-2 days

∙ 43% said 3-4 days

∙ 40% said 5-6 days

∙ 12% said 7 or more days

Survey participants answered how likely they are to shop with a retailer online or by phone for future purchases if an item they purchase online or by phone is not delivered within two days of the date promised:

∙ 29% answered that they are much less likely to shop with that retailer online or by phone for future purchases

∙ 33% answered that they are less likely to shop with that retailer online or by phone for future purchases

Late deliveries impact not only future online and phone purchases, but future in-store purchases as well. Respondents were asked how many times they would need to receive an item that they purchased online or by phone later than the promised delivery date before abandoning shopping with that retailer altogether:

∙ 17% of respondents will abandon shopping with a retailer altogether after receiving a late delivery one time;

∙ 55% of respondents will abandon shopping with a retailer altogether after receiving a late delivery two to three times

Although respondents have high expectations for on-time deliveries, they are even less forgiving for incorrect deliveries:

∙ 29% of respondents noted that they would abandon shopping with a retailer altogether if they received one incorrect delivery

∙ 59% of respondents noted that they would abandon shopping with a retailer altogether if they received two to three incorrect deliveries

Also, 56% of respondents noted that up to 10% of the items that they have purchased online or by phone have arrived later than the delivery date, while 44% responded that up to 10% of their items have been incorrect due to retailer error (for example, the retailer shipped the incorrect size, color, product, etc.).

Expectations for delivery time during the holidays are similar to expectations at other times of the year.  Therefore, although retailers are addressing significantly more order requests and delivering substantially more packages, the vast majority of consumers still expect delivery within three to six days assuming the retailer is providing free shipping:

∙ 38% of respondents said that they expect holiday gifts purchased online or by phone to be delivered within three to four days;

∙ 42% of respondents said that they expect holiday gifts purchased online or by phone to be delivered within five to six days

Retailers, however, have less room for error during the holidays.  Of the survey participants, 68% noted that their expectations for correct and on-time delivery of items that they purchase online or by phone are higher during the holiday shopping season.  Further, 30% of respondents stated that they intend to have more or significantly more holiday gifts delivered directly to them this year than during last holiday season.  When asked what percentage of the holiday gifts they purchased last holiday season were delivered directly to them versus bought in store, they answered:

∙ 29% said less than 20%

∙ 22% said 21-40%

∙ 19% said 41-60%

∙ 12% said 61-80%

∙ 19% said 81-100%

Therefore, although half of respondents had between 40-100% of their holiday gifts delivered directly to them last holiday season, retailers can expect even more direct-to-consumer orders this year. 

“As the popularity of online shopping has exploded, retailers have not given enough attention to optimizing their supply chain for multi-channel distribution,” notes Phillips.  “Many still have an out-dated distribution center infrastructure in place and as a result, order fulfillment is often suboptimal.  Most inefficiencies and errors occur in the distribution center at the moment of order selection, which has the largest impact on ensuring timely, accurate customer fulfillment.”

 

 

 

 

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