How last mile delivery can drive new paths to purchase

The path to purchase is so varied nowadays: in-store, online (desktop), mobile (smartphones and tablets, mobile apps). Retailers are responding via adopting omnichannel strategies.

Early this year, UPS published the results of the Pulse of the Online Shopper survey which shows that Asia has the lowest satisfaction in online shopping and the least patient across the world. This gives retailers across the region more challenges to address.

Daryl Tay, Enterprise Product Strategy, UPS Asia-Pacific Region, said that Asia is now officially the fastest growing e-commerce market in the world, and there is greater potential more than ever to be realized in e-commerce if e-tailers are able to get the formula right.

There are two overarching elements that e-tailers need to address in order to improve the customer experience. First, they need to optimize their online platforms across all mediums to ensure that they are intuitive and informative,” he said. “Second, e-tailers need to develop a logistics strategy that not only satisfies the customer upon receipt of the goods but actually entices them to make purchases from the beginning.”

Out of all the markets surveyed, Asian shoppers indicated that they are least satisfied with the availability of free shipping. Moreover, 70 percent of the respondents feel free shipping is an important factor when purchasing online.

On the surface, one might perceive that an attempt to meet this need could affect a business’s bottom line. However, additional insights from the survey tell a different story: 58 percent of online shoppers in Asia will wait an extra three days to qualify for free shipping, and the majority of shoppers will take action to qualify for free shipping—the leading action being adding additional items to their carts,” Tay revealed.

He said e-tailers can either use a less expedited delivery option in order to ship for free, or they can use it as a way of providing incentives to customers. Incorporating a range of shipping options can help balance cost and speed in order to fulfil the demands of consumers and remain competitive.

Another key area of dissatisfaction highlighted in the survey is returns. Only one in three shoppers is satisfied with the ability to find a retailer’s return policy. This is an issue of significant importance, especially when 90 percent  of online shoppers want to review a retailer’s return policy while shopping. 

Tay said simple returns can be seen as crucial to helping close the gap between online shopping and traditional bricks-and-mortar retailing — if a dress in a shop doesn’t fit, you can opt not to buy it on the spot, but if an outfit purchased online isn’t the right size, then the ability to easily obtain a refund or an exchange is crucial. 

According to the survey, 68 percent of respondents would be likely to complete a transaction if they could return products to a store for free or ship it back with a convenient pre-paid label supplied by the retailer. 

Tay shared that the UPS Return Label service allows consumers to send purchases back without having to worry about mailing addresses or additional costs. “UPS’s Returns shipping experience is one reason that 75 percent of retailer Zappos’ shoppers are return shoppers, and part of the reason behind how the company reached $2 billion in sales,” he said.

Outside of the delivery experience, the survey also found that e-tailers are not doing enough to cater to growing demand for m-commerce in Asia. Half of the respondents stated that images on mobile were not big or clear enough, while over 40 percent indicated that it was difficult to view product information and that it was hard to compare products.  

“This represents an area where there is a clear gap between what the customers are doing and what retailers are doing. As such, it is necessary for businesses to be cognizant of the changing habits of buyers, and adapt to this by optimizing their online stores across all platforms,” Tay said.

Addressing logistics challenges

The UPS Pulse of the Online Shopper survey uncovered several challenges for e-tailers looking to target Asian shoppers: 32 percent of shoppers will ship to store at some point; 33 percent are satisfied with post-shipment flexibility to choose another delivery date, and 31 percent are satisfied with ability to reroute a package. However, 60 percent abandoned a cart due to lengthy delivery times or no delivery date.

“When you look at this in a context in which consumers want flexible delivery locations and times, it’s clear that that having the right logistical systems to complete fulfilment in line with shoppers’ demands is vital to ensuring the overall health of the business. To help them focus on this critical capability gap, retailers need to leverage strategic and innovative logistics and fulfilment solutions that can identify hidden costs, streamline distribution channels, and help ensure profitability,” Tay said. 

With global and big local retailers already offering free shipping, same-day delivery and varied pick up or delivery options, what more innovations could be done to meet customers’ demand?  

Tay said technology is going to continue offering shoppers greater flexibility. Citing the UPS My Choice service, he said it gives customers the option to actively reschedule and reroute their shipments online, whether on a traditional desktop or laptop or through a mobile device.

“While on the surface providing the option to reroute may seem simple, underlying this is a vast set of technical algorithms that minimise disruption to our service while still providing timely delivery of such packages. Put simply, technology allows us to be more flexible so that we can offer more flexibility to recipients,” he said.

He also believes that the symbiotic relationship between logistics providers and retailers will need to move beyond a vendor-purchaser relationship to a collaborative partnership. 
 
“In the early stages of e-commerce, all retailers needed to do was make sure a purchased product reached their customer. In a more competitive landscape, going beyond price or product and gaining customer loyalty is a major challenge. Logistics solutions will need to be smarter in order to balance operational costs and consumer demands,” he concluded.

RELATED ARTICLES

RELATED WHITEPAPERS

RELATED VIDEOS