The UK online retail market shows no sign of slowing down, with £116bn predicted to be spent online in 2015. At the same time, customers’ expectations are growing and the indications are that they are becoming less tolerant of fulfillment failures. This year’s Customer Pulse Report has revealed that almost half (47%) of UK adults surveyed had experienced problems with online orders over the past 12 months. More alarming, 71% indicated they would be likely to switch to an alternative retailer as a result of a poor fulfillment experience!
From our experience, we know that the increasing complexity of fulfillment is a challenge for retailers; however, it is clear that customers have no reservations about taking their business elsewhere if they are not satisfied with the service they receive. It is clear from this year’s report that the importance of good service, together with good value and flexibility in delivery options, cannot be underestimated. Indeed, the Customer Pulse Report indicates that customers are demanding even greater flexibility and convenience when it comes to the delivery of orders. Nearly half of respondents (46%) who had made an online purchase in the past 12 months said they had chosen a retailer that offered multiple delivery options over a retailer that only offered one option. Customers today value having choices and options for the delivery of items and are prepared to vote with their feet; speed is not always of the essence. It is clear that retailers must develop their capability to offer multiple delivery options and increased choice to shoppers.
Equally, the returns experience is playing a greater role in shoppers’ retail choices. Almost two-thirds of respondents (63%) said the ease of being able to return items now factors into which retailers they shop with online. While the omni-channel environment allows customers to purchase products how, where, and when they want to, it’s clear that customers are demanding the same flexibility when it comes to returning products.
Expectations are rising and tolerance for poor performance is decreasing. Retailers must ensure that they have the capability and flexibility built into their supply chains to meet customers’ expectations. To carry out online fulfillment profitably, retailers must think hard about the configuration of their supply chain and will need to become much smarter about how they use their key assets of staff, stores and inventory to fulfill customer requests in an intelligent way. The journey will be a difficult one, requiring a much more sophisticated and complex operation supported by robust planning and intelligent fulfillment execution. This will be the key battleground for retailers in the next five years.
Surveying 2,000+ UK adults aged between 16-64 years, the second annual Customer Pulse Report provides an overview of the existing state of online fulfillment and shoppers’ expectations when it comes to service excellence, both now and in the future. Download your copy of the report today!