Laying the groundwork for effective delivery and returns management

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This article is brought to you by Retail Technology Review: Laying the groundwork for effective delivery and returns management.

By Johan Hellman, VP Product and Carrier, nShift

For multichannel and ecommerce retailers and their logistics partners, the first months of the year are when crucial groundwork is done to learn the lessons from last year’s peak season.  

However, although total retail sales were up at the end of 2023, the increase was significantly down on the previous year.  It’s essential, therefore, that this quarter’s groundwork is effective across the whole ecommerce experience – from browsing an item to its arrival at the customer’s door.      

Why the delivery experience matters

What happens after a customer clicks “buy now” can matter just as much as purchasing a product.  How orders are shipped to customers is critical, not just during peak season, but throughout the rest of the year.  Done right, deliveries can drive loyalty, increase revenues, and unlock new business models – as well as improving business efficiency and emissions performance.  But deliveries also risk becoming the weak link in the ecommerce experience.

According to a recent nShift survey, almost half (48%) of respondents agreed that if they had a bad delivery experience, they’d be reluctant to recommend a retailer or brand to friends and family.  On the other hand, a slick, speedy, and effective delivery experience can go a long way to encouraging loyalty, with 58 percent of shoppers saying they would buy again from retailers that delivered their purchases efficiently.

This groundwork phase is an opportunity, then, to ensure the right logistics capabilities are in place for the coming year.

Tackling the “trillion-dollar” return problem

Costing an average of £20 to return, repair, repack, and resell every individual item, handling returns is an expensive business.  At a total cost to British retailers of around £7bn a year, it’s little surprise that market analysts Gartner have referred to returns as a “trillion-dollar problem”.  But, as highlighted in nShift’s research, shoppers today expect to return unwanted products free of charge; if they can’t, then they’re less likely to buy them in the first place.

It's necessary, then, to have a returns process that respects this consumer preference while minimising the damage to a retailer’s profit margins.  By giving customers the option of an exchange rather than a refund, for example, a digital returns process can help to convert up to a third of returns into exchanges, while a reverse logistics capability can ensure returned items are given a second chance at generating revenue.  Unused goods can be sold again as new, and used or damaged items up-cycled or sold at a discount.

Addressing sustainability concerns

Growing environmental awareness has pushed sustainability to the top of the agenda.  Four in five (81%) shoppers express a preference for brands that demonstrate a positive approach to sustainability.  At the same time, though, around two in five say they distrust brands’ environmental claims.  Transparency in the form of emissions reporting, particularly regarding delivery, will go a long way to restoring this trust.

Increasingly stringent regulation only adds to the need for emissions reporting.  Retailers must comply with EU emission reporting rules, for instance, and the introduction of the EU’s Corporate Social Responsibility Directive (CSRD) will require retailers operating in the European Union to provide detailed, validated reports on their CO2 emissions – including those in the last mile.  By closely tracking and calculating the CO2 emissions associated with each delivery, retailers will not only comply with these regulations, but also prove their sustainability credentials to consumers.

The benefits of delivery management

Delivery management is key to driving ecommerce success.  Retailers can’t afford to rely on just one or a handful of carriers.  The more carrier connections a retailer has, the more dependable their deliveries will be, and the more choice they can offer their customers.  This is particularly important given that 43 percent of the survey’s respondents said a failure to find their preferred shipment option had led them to abandon a retailer.  Indeed, customers value being able to choose what works best for them; providing a range of delivery options can increase conversions by as much as 20 percent.

The right delivery management platform can streamline a retailer’s internal operations, too.  With a large carrier library, it can unlock efficiencies, improving overall delivery reliability, as well as helping the productivity of logistics and fulfilment teams, shipping more items without the need to hire more people.  And, by making it easy to compare carrier costs and performance, it can also help to secure value for money.

Ecommerce success depends on careful planning.  The importance placed by shoppers on the delivery process demonstrates why it’s crucial during the groundwork quarter for retailers and warehousers to ensure the best delivery management capability possible.

Find out more about how nShift can assist retailers during groundwork quarter and beyond.

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