Shopping on-line, you take free and fast delivery for granted, as many other things like simple returns and exchange policy. But what do retailers and logistics providers have to do with their supply chain to ensure an excellent customer experience in terms of delivery?
Let us take a closer look at on-line shoppers’ demands and the changes they brought to retailers’ supply chain and e-fulfillment processes.
Customers are very demanding when it comes to shipping price. It is one of the most frequent reasons for shopping cart abandonment. So to stay competitive, retailers have to adapt their pricing policy to customers’ expectations.
How can E-commerce businesses minimize their shipping costs?
As you can imagine, a good strategy is to negotiate good prices with carriers / parcel services or to partner with a strong third-part logistics company, capable to negotiate even better deals.
It should be mentioned that different carriers are testing different pricing models, for example, pricing based on the dimension of the box (so called DIM pricing) instead of a classical one based on weight and distance travelled. In this case, it is in retailer’s interest to come up with a wide range of box sizes to make sure products fit there perfectly.
A good practice is also to use software that can analyze order content and indicate which size of shipping cartons to use. How does it work? At receipt, special equipment captures the dimensions of each stock keeping unit (SKU) and this data goes to the warehouse management system. At expedition, the dimensions of all the items are calculated and the exact carton size is indicated. This enables to fit as many items in a box as possible and to choose an optimal box size.
Using lightweight packaging materials will also contribute on cutting down the expenses.
Lots of online shoppers look at returns and exchange policy before making their purchase. So the first thing to do for retailers is to make sure these instructions are easy-to-find on the website and as clear as possible.
What information would be necessary to include to these instructions?
- What kind of products can be returned or exchanged,
- What is the time limit to return a purchase,
- In what way customers can make a return: by mail, in a store,…
- How long it takes for the customer to get his credit back,
- And last but not least, who pays returns shipment: the customer or the company. In case this cost is fully or partially on the customer, the e-retailer should clarify what happens if a good has to be returned because of damage or a wrong delivery.
If the customer decides to return his purchase, the retailers’ job is to provide him with a return form that could be downloaded from a website and printed. The clearer a return form is, the easier it is for a retailer to understand what was wrong with the item and to reintegrate it into the logistics process.
Customers may not realize full cost of returns for retailers: it is not only taking the product back from the customer, but also inspecting, re-packing, and re-stocking it or, if it is damaged, repairing, refurbishing, dismantling it.
So it is crucial to have the right reverse logistics system in place in order to treat the returns fast and to get the maximum value of them.
GEODIS has implemented a special set of services for defective returns, they are designed to satisfy final customers on the one hand, and the company on the other.
As you can see, e-commerce businesses are trying to step into the shoes of shoppers to provide the best customer experience it possibly can be. What other factors do they have to take into consideration, apart from shipment price and returns policy?
We will cover the rest of the e-commerce logistics aspects next week, so stay tuned to find out more.