The convenience of browsing products from anywhere, coupled with the ease of doorstep delivery, has caused a surge in online shopping. In fact, a recent report released by UPS Capital Insurance Agency, Inc. found that almost all surveyed small and midsized merchants (99 percent) claimed an increase in their shipping volume over the past two years due to the significant growth of e-commerce.
As shipment volume increases, so do potential complications in the post-purchase journey. Shipping and delivery issues like lost, delayed, damaged and stolen packages pose a dual threat to merchants’ financial outcomes and customer loyalty. Let’s examine these challenges and how retailers are addressing them in an effort to improve the customer experience.
Increased Deliveries, Heightened Complications
In the same report, 69 percent of surveyed consumers grappled with shipping or delivery issues in the past year, citing late deliveries, lost orders, and damaged products as the top three culprits. Despite these challenges, consumer expectations for the post-purchase journey remain high, with a resounding 92 percent of those surveyed stating that the shipping and delivery experience has a substantial impact on their overall online shopping experience.
However, retailers face significant capacity constraints and bottlenecks that jeopardize being able to deliver an exceptional customer experience, such as fulfillment speed challenges (54 percent), management of spikes during peak periods (48 percent), and lack of visibility into potential mishaps before they happen (36 percent). This struggle carries substantial financial implications, with over one in four (30 percent) merchants surveyed reporting losses exceeding $100,000 due to lost, stolen or damaged shipments in the past year.
Technology Solutions Gaining Popularity
Seventy-seven percent of surveyed merchants have implemented some form of artificial intelligence-enabled technology, demonstrating retailers’ appetite for innovation and the role technology will play in revolutionizing not only their own businesses but the broader shipping industry.
Notably, these merchants anticipate AI-driven solutions will have an impact through improved efficiency (67 percent), reduced human error (58 percent), and optimized warehouse operations along with inventory management (44 percent).
Additionally, the desire for technology solutions extends to the Internet of Things (IoT) as well, with surveyed merchants seeing IoT as a tool to provide real-time tracking updates, monitor changes in delivery timelines, and enhance communication with customers.
Elevating the Customer Experience
Beyond technology, retailers are doubling down on efforts to improve customer perceptions amid an increasingly competitive marketplace. Notably, surveyed consumers viewed loyalty programs and personalized shipping options as a few of the most appealing benefits retailers can offer to build brand loyalty.
Loyalty programs provide more than incentives for repeat business. Benefits like earning reward points and access to exclusive experiences or promotions can play an important role in shaping brand image and influencing customer perceptions.
Surveyed consumers and merchants both recognize the value of offering personalized shipping options — be it faster deliveries, specific arrival dates, or expanded return options. An overwhelming 93 percent of surveyed merchants believe these customized offerings are pivotal for driving customer retention. This sentiment is echoed by surveyed consumers, with three-in-four (76 percent) expressing they would be more likely to choose a retailer offering customized shipping and delivery options when faced with comparable alternatives.
Delivering Better Experiences
The e-commerce boom has transformed the importance of shipping for merchants and consumers alike. With the post-purchase process playing a pivotal role in satisfaction, loyalty, and the overall well-being of a retail business, navigating this landscape poses complexities. However, risks can be mitigated through strategic priorities, including embracing innovative supply chain technologies to increase efficiency, while also elevating the customer experience by offering value-driven loyalty programs and personalized shipping options. By focusing efforts on these critical areas, retailers can turn the evolving complexities of delivery into an opportunity to drive sustainable growth.
As chief executive officer for strategy at UPS Capital, Archita Prasad develops and implements corporate strategy, leads growth initiatives, and leads the ongoing digital transformation journey.
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