When it comes to increasing customer satisfaction, competition is fierce. With their vertically-integrated supply chains, retail giants like Amazon and Walmart are fueling customer expectations for ever-faster delivery speeds. They are creating a divide between retailers who can meet these customer demands and those who have to find other advantages to keep up.
One way that retailers are competing is by diversifying their channel mix. Those retailers with brick-and-mortar stores are adding services like Buy Online, Pick Up in Store (BOPIS), Reserve Online, Pick Up in Store, and other delivery options that are giving customers more control and flexibility in how, when, and where they receive their package. Even retailers without stores are getting in the physical location game by partnering with programs such as Narvar Concierge to offer consumers the convenient option to pick up and drop off ecommerce purchases at Walgreens or Nordstrom.
At the same time, the types of goods available via ecommerce channels is also growing. Online grocery spending now accounts for 5.5% of total grocery spending in the US, with projections to grow to a $100 billion industry by 2025. The rise of Instagram shopping has given way to an increasing large number of Direct-to-Consumer (D2C) brands, increasing the breadth and availability of products. Increasingly, categories that were once thought to require a physical store, such as large furniture and specialty goods, are growing their online business.
Customer choice and expectations have never been higher!
Regardless of the retailer, one thing remains true: there are crucial points across the purchase journey for all consumers. From the moment they add an item to their cart to the moment they receive or need to return their order, every touchpoint requires the utmost attention.
In our newest report, we analyzed six of these key consumer touchpoints, or “magical moments,” through the lens of the retailer who is competing for that repeat purchase to drive brand loyalty. From delivery speed and shipping options to transparency and active communication, this report contains insights from our data across 7 billion interactions and 650+ retailers around the globe, sliced by regions and retail categories to provide deeper benchmarking.
We’ve highlighted the data points to measure success at every touchpoint and explain how to optimize each step to improve the overall customer experience. By addressing these six magical moments, retailers can offer additional value by extending exceptional service, curating products, and aligning customer and company values to establish more of an emotional connection.
Set expectations even before the purchase
By having more strategically-located distribution centers, bigger companies are able to offer free shipping and faster fulfillment of orders. Many retailers are falling behind in the shipping category which can impact conversion and hurt their bottom line if they cannot provide the choice and convenience customers expect. In fact, 77% of consumers abandoned their carts due to dissatisfaction with a retailer’s shipping options.
The amount of time in transit is a huge consideration, but can vary substantially by region and category. We found that the delivery time in the US is twice as slow as in the UK, with the US average time in transit (TNT) being 3.5 days, in comparison to the UK’s average of 1.5 days. This discrepancy in shipping time is due to two key factors: a wider geographic footprint in the US and expedited shipping becoming much more common in the UK. In an attempt to gain parity with companies like Amazon, the US delivery time frames are trending toward becoming shorter. Even though the US has slower ship times, our data supports that there are some categories that ship more quickly. For example, food and wine as well as technology products have faster shipping times due to the inherent urgency of perishable products, or the cost of an item.
While not all retailers can offer shorter shipping windows, there are a number of ways they can stay competitive. One of these is to appeal to a customer’s values. As a growing industry trend, retailers are becoming more sustainable, and for good reason: 66% of consumers are willing to pay more for sustainable product options. If a retailer can offer these eco-friendly product or shipping options, they have another opportunity to differentiate themselves and build an emotional connection, while also increasing profits.
After the sale, be transparent and proactive
Aside from delivery speed and offering a variety of shipping options, retailers can foster trust by providing customers more transparency and proactive communications about their package. In a joint study, we found that 33% of UK consumers would shun retailers that fail to provide useful follow-up communications after a purchase. One expectation is clear: while the customer’s delivery anticipation builds as they await their package, they want accurate tracking information.
The level of customer engagement with post-purchase touchpoints can vary by category. According to our data, retailers in the Technology category had the highest marketing Click-Through Rate (CTR) from their tracking pages, with 13% of customers clicking on marketing content going directly to the retailer’s webpage. The Home Improvement and Health/Beauty categories followed closely behind.
In fact, Technology consistently came in higher than average globally across other core engagement metrics, such as repeat visits to the tracking page and SMS opt-in rate. This is likely due to three key characteristics of the category: a greater sense of urgency, longer purchase consideration period and high risk of theft, often due to a higher average price point. For these reasons, technology products have a high opt-in rate for notifications.
Communication about exceptions or changes in expected deliveries all have especially high engagement. Our analysis finds that Delivery Attempt emails have a 65% average open rate, with Delayed emails following closely behind at a 63% open rate. This is not surprising, as 98% of customers agree that even if it is bad news, they feel better about a company if they are notified as soon as possible. This is even more of a reason to keep active lines of communication open, to reduce the amount of Where is My Order (WISMO) inquiries.
Making the most of the magical moments
By paying closer attention to these trends, retailers can use data to craft strategies that better cater to customer needs. With the holidays right around the corner, optimizing each one of these moments both pre- and post-purchase will help better connect with customers and build lasting relationships to increase loyalty and lifetime value.
To learn about the rest of the magical moments, success metrics to benchmark against, how to optimize these touchpoints, and examples of who’s doing it well, download our Magical Moments Report.