state of shipping in commerce 2016 - imrg...contemporary customer journey. traditional,...

STATE OF SHIPPING IN COMMERCE 2016

http://www.temando.com

Participant Profile

ConsumerRetailer

INTRODUCTION

The world has changed. Accessibility to the internet and the insatiable mobility of commerce have inspired a new generation of shoppers. A generation that is not so easily segmented into the traditional psychographic profiles of research past but a generation united by their collective desire to experience the world on their own terms. This desire for personalisation and connected experiences have left many retailers to re-imagine their business in the context of the contemporary customer journey. Traditional, back-of-house operations, such as shipping and fulfilment, have come into the spotlight - not as traditional cost centers but as an opportunity for genuine differentiation in a competitive world.

The customer journey is ripe for disruption and increasingly linked to the product’s journey through a retailer’s fulfilment process. As a technology company, operating at the intersection of commerce and logistics - our unique position afforded us the opportunity to dive a little deeper on the industry and led directly to the research presented in this report.

We commissioned Research Now to conduct a global survey into the expectations of today’s consumers and the capability to meet those expectations by today’s retailers. The Research surveyed 4000 Consumers and 800 Retailers in Australia, France, United Kingdom and the United States (1001 Consumers, 208 Retailers in the UK). The Research explores consumers expectations - what they want now, what they want in

the future and importantly what they are willing to pay for in the UK Market. The findings are then mapped to UK retailer’s ability to connect with carriers, automate the shipping and fulfilment process, operate in the omnichannel and more.

It is our intention to build on this study every year and keep you informed as to the collective challenges we face and the opportunities that present themselves. The results are fascinating, the insights thought provoking, designed to inform retail strategy and shape the future of commerce.

We hope you enjoy the findings,

Carl Hartmann Co-Founder & CEO Temando

Introduction Shipping & Fulfilment Consumer Expectations Returns Tracking Omnichannel Summary


PART 1: PARTICIPANT PROFILE

Retailer Type

RETAILER Digital disruption has changed everything and nothing at the same time. Today’s retail environment is more complex than it has ever been, yet the same core principles apply: Fulfilment, Merchandising, Payments. All retailers are at

ENTERPRISEMIDSMALLMICRO

Micro retailers send between 5 - 20 deliveries per week.

Enterprise can send 20,000 - 100,000!

Retailer Category Surveyed

23%

21%

7%

22%

10%19%

6%

HEALTH & PERSONAL CARE

FOOD & BEVERAGES (EXCL. GROCERY)

SPORTING GOODS & HOBBIES

CLOTHING & ACCESSORIES

FURNITURE & HOME

ELECTRONICS & APPLIANCES

40% of Furniture and Homewares retailers generate 21-50% of their revenue online

different stages of their evolution and to get a clear snapshot of the industry we surveyed a broad selection of retailers and categories - excluding services and grocery.

3

Participant Profile

ConsumerIntroduction Shipping & Fulfilment Consumer Expectations Returns Tracking Omnichannel Summary

Retailer

BOOKS & STATIONERY


% of Online Sales

HEALTH & PERSONAL CARE

20%

20%

20%

19%

19%

19% 20%

20%

17%

17%

17%

17%

16%0%

6% TO 10%

1% TO 5%

24%

25%

25%

26%

25%

22%

40%

42%

7%

7%

7%

7%

11% TO 20%

8%

8% 10%

10%

10%

10%

8%

8%

MORE THAN 50%

2%

7%

8%6%

13%

13% 13%

13%

13%

100%

BOOKS & STATIONERY

FURNITURE & HOME

ELECTRONICS & APPLIANCES

CLOTHING & ACCESSORIES

FOOD & BEVERAGES (EXCL. GROCERY) TOTAL


26%

33%

27%

28% 30%21% TO 50%

25% of retailers surveyed generated 21-50% of total revenue through online sales

4

Participant Profile


Retailer

35% of UK Retailers sell on eBay and 40% sell on Amazon

44% of Pure Play Retailers sell on eBay and 50% sell on Amazon


5 TO 20 PER WEEK

21 TO 100 PER WEEK

1,001 TO 5,000 PER WEEK

101 TO 1,000 PER WEEK

5,001 TO 20,000 PER WEEK

20,001 TO 100,000 PER WEEK

MORE THAN 100,000 PER WEEK

Number of ShipmentsMade Per Week

23%

27%

12%

22%

9%

5%

2%

5

Participant Profile


Retailer


CONSUMER ProfileEveryone is shopping online these days from the time-poor young family to the retired couple living their dream. All have unique habits, some spend more than others and most of them know how to abandon a shopping cart.

OLDER SINGLE 2%

SINGLE, LIVING ALONE 13%

YOUNG FAMILY 26%

OLDER FAMILY 9%

MIDDLE AGED FAMILY 7%

RETIRED COUPLE9%

LIVING WITH PARENTS 11%

COUPLE, NO CHILDREN 21%

I can shop when I wantThere is a better selection online

It’s cheaper onlineI can get free shippingAccess items not available where I live

What are the main reasons for shopping online?

(IN ORDER OF PREFERENCE)

6

Participant Profile


Retailer


What Do Consumers Regularly Purchase Online?

Clothing and accessories

Electronics and appliances

Food and beverages (other than grocery)

Jewellery

Liquor

71%53%

42%41%

30%29%28%

25%25%24%23%

19%18%

8%

What Are Consumers Spending Online?

3 in 5 consumers purchase online more than twice a month

£25 to £100 per month




£501 to £1,000 per month

£501 to £1,000 per month

70%

76%

27%

22%

2%

2%

31%42%

of 16-24 year olds spend £101-£500 per month

of consumers spend spend between 2 - 5 hours per week browsing internet shopping sites

7

Participant Profile


Retailer

Books and stationery

Music / DVDs / Movies (physical)

Furniture and home

Health and personal care

Toys

White goods

Computing

Sports goods and hobbies

Hardware and garden


Jumping Ship! Why UK Consumers Abandon Shopping Carts

THE COST OF SHIPPING WAS TOO HIGH

THE SHIPPING COSTS WERE COMMUNICATED TOO LATE IN THE PURCHASE

I WAS CONDUCTING PRODUCT/PRICE RESEARCH

FREE SHIPPING WASN’T OFFERED

I DID NOT QUALIFY FOR FREE SHIPPING

THE SHIPPING WAS GOING TO BE TOO SLOW OR INCONVENIENT

I WAS ONLY BROWSING

THE PROCESS TOOK TOO LONG

60%

42%

29%

37%

30%

38%

27%

27%

73% 49%of older families abandon their purchases when the cost of shipping is too high

of over 55’s abandon when the shipping costs were communicated too late in the purchase

8

Participant Profile


Retailer


PART 2: SHIPPING & FULFILMENT

Has The Cost of Shipping Changed Over Time?

The rise of eCommerce has shaken Retail to its core. Enterprise Retailers with the benefit of foresight and resources are leading the way in terms of the efficiency of their operations.

Old Industry, New Opportunity

53%60%

of retailers believe shipping costs have increased over time, the majority seeing a 5 - 10% increase in costs

of Enterprise Retailers have seen no change in their shipping & logistics costs over the past 12 months

9

Participant Profile


Retailer


Who Covers the Cost of Shipping

Smaller retailers, dealing with tighter margins and less volume, are passing on all or part of the cost of shipping to their customers. Not surprisingly, the cost of carrier rates is a major concern for these retailers.

16%82%

of small retailers are absorbing the costs of shipping, compared with 47% of Enterprise

ONLY

of Pure Play Retailers are passing on all or part of the shipping costs to their customer

MICROThe customer is not charged for shipping

The customer is charged part of the shipping costs

The customer pays the full shipping cost

The customer pays the full shipping cost plus an additional margin on top of the cost of shipping




21%46%

29%4%

5%

2%

0%

MIDThe customer is not charged for shipping



31%47%

19%

ENTERPRISEThe customer is not charged for shipping



47%20%

33%

SMALLThe customer is not charged for shipping



16%52%

27%

10

Participant Profile


Retailer


Sleepless Nights: What’s Keeping Retailers Awake

MICRO

SMALL

MID

ENTERPRISE

30% of UK Retailers are concerned with the high courier rates

Main Concerns Retailers Have In Shipping & LogisticsTop concerns per category:

The high cost of couriers are a consistent concern across all retailers, no matter the size. With most retailers passing on some or all of the courier costs, and 60% of consumers abandoning their purchases due to high shipping costs, their concerns are valid.

11

Participant Profile


Retailer

1. COURIER RATES TOO HIGH 2. LACK OF CONSISTENCY BETWEEN COURIERS

1. COURIER RATES TOO HIGH 2. LACK OF CONSISTENCY BETWEEN COURIERS

1. COURIER RATES TOO HIGH 1. MEETING CUSTOMER EXPECTATIONS (EQUAL 1ST)

1. LACK OF CONSISTENCY BETWEEN COURIERS 2. MEETING CUSTOMER EXPECTATIONS


The agility of commerce

78%of consumers want same day shipping - efficiency is key to an exceptional customer experience

Almost 4.5 in 5 small retailers get orders out the door in under 12 hours

Half of Micro Retailers are able to ship and online order in under an hour compared to just 34% of enterprise retailers.

28% of retailers are still manually booking couriers

Only 35% of mid-level retailers have a totally automated carrier booking process

12

Participant Profile


Retailer


86%of consumers have used or would like to use TIMESLOT DELIVERIES

PART 3: CONSUMER EXPECTATIONS

The gap between consumer expectation and retailer capability is growing. The future belongs to retailers who capitalise on this opportunity and turn shipping and fulfilment into a retail weapon.

59%HYPER LOCAL

78%SAME DAY SHIPPING

82%

18%

96%

88%

84%

STANDARD SHIPPING

COLLECT FROM STORE

COLLECT FROM LOCKER/ OTHER COLLECTION POINT

SPECIFIED TIMESLOT FOR DELIVERY

GUARANTEED WEEKEND OR AFTERHOURS SHIPPING

EXPRESS SHIPPING

WHAT CONSUMERS

ARE PREPARED TO PAY A PREMIUM

FOR

WHAT RETAILERS ARE

OFFERING

WHAT CONSUMERS

WANT

86%

76%

71%

47%

47%

53%

55%

30%

38%

40%

45%

34%

64% 26%

28%

25%

19%

The People Have Spoken

13

Participant Profile


Retailer


The Importance of Shipping Options

56%

57%

66%

67%

MICRO

SMALL

MID

ENTERPRISE

73% of clothing and accessory retailers offer multiple shipping options, compared with just 50% of furniture and homeware retailers

Consumers expect multiple shipping options, but not everyone is offering them.

Giving consumers choice at the checkout is now less of a feature and more of a necessity, with 89% of UK consumers expecting to see multiple shipping options in the cart.

With 62% of all retailers giving their customers choice, it’s more important than ever to remain competitive.

14

Participant Profile


Retailer


ONLY 39%

BUT 59%

of UK retailers are ready to support or currently offer hyper local delivery

of consumers want it

I NEED IT NOW!More Shipping Options = More Sales. Fact.

What has been the impact of increasing the number of shipping options at checkout?

Increase in sales 74%

60%Reduction in cart abandonment

Ability to meet customer expectations 85%

Ability to meet shipping deadlines 77%

Ability to ship to a wider geographical area 72%

85% of retailers believe that by offering multiple shipping options, they are better served to meet customer expectations

15

Participant Profile


Retailer


The Impact of a Negative Shipping Experience

39%

36%

31%

25%

25%

22%

22%

21%

NEGATIVE IMPACT ON BRAND IMAGE

INCREASED COST OF RETURNS

INCREASED EMAIL TRAFFIC

ADVERSE COMMENTS ON SOCIAL MEDIA

How is your business affected when a shipment is lost, delayed or arrives damaged?

A product’s journey through the supply chain, in today’s direct to consumer model, is in reality, your customers

journey. Negative shipping experiences affect repeat purchase and ultimately the lifetime value of the customer.

Today’s retailers need to be conscious that the customer journey begins long before the shopping cart and exists

long after the product is delivered.

16

Participant Profile


Retailer

REDUCED CUSTOMER LOYALTY

POOR PUBLIC RELATIONS

INCREASED LOGISTICS COSTS

INCREASED CALLS TO CALL CENTRE


The Future is Drones, Or Is It?

24%42%

of all UK Retailers would be willing to use drones to deliver their packages

of UK consumers are willing to accept a drone delivery

Are drones really going to change the face of shipping? Not surprisingly, the older generationdoesn’t think so. 31% of those aged 55+ are not interested in using a drone service to delivertheir packages, compared with 56% of 16 - 24 year olds who are.

17

Participant Profile


Retailer


Returns Options Offered by Retailers

PART 4: RETURNS

What Proportion of Total Items Shipped are Returned?

The Full Circle

18

Participant Profile


Retailer

20% 26% 22% 26%

27% 27%31% 44% 44% 45%

42%

2%

2%

2%

2%

2% 2%

20% 33%

32% 33%

11% 10%

10%

11%

13%15% 17%

17%

17%19%

11%

0% 0% 0% 0% 0%

0% 0%0%

0% 0%

0% 0% 0% 0%0% 0%

0%

0% 0% 0% 0%

4%

5%

6%

6% 7% 7%

7%

7%

7%

8%

Return goods via mail

Retailers offeringConsumers have used

73%59%Return to store 55%48%

Drop off at a post office 37%52%Collection from original

destination address (home etc.) 44%26%Drop off at another location 31%28%

Less than 1%

11% to 15%

1% to 5%

16% to 20%

26% to 30%

6% to 10%

21% to 25%

31% to 35%

36% to 40%

65%

Mid-market retailers are the most generous with their returns

period, 10% offering returns within 3 months and 11% with no

time limit for returns.

of UK Retailers accept returns within 1 month

47%of Enterprise Retailers do not allow goods purchased online to be returned in-store

HEALTH & PERSONAL CARE BOOKS & STATIONERYFURNITURE & HOMEELECTRONICS & APPLIANCESCLOTHING & ACCESSORIES FOOD & BEVERAGES (EXCL. GROCERY)



When The Shoe Doesn’t FitWhy People Are Returning Online Purchases

43% of UK Retailers are still manually processing returns

61%

39%

22%

21%

SIZE WAS INCORRECT

THE GOODS ARRIVED BROKEN

I CHANGED MY MIND

45%THE GOODS DID NOT LOOK THE SAME AS THEY DID ONLINE

61% of consumers have returned an item due to incorrect sizing. Retailers could look to reduce this number by adding sizing information in product descriptions, e.g. ‘product is true to size’ or ‘product is a small make - we suggest you order a size larger’.

With 39% of consumers having to return broken items, retailers need to ensure they’re packaging fragile items correctly. By using multiple carriers or specialist services, risks can be mitigated.

19

Participant Profile


Retailer

THE COST OF RETURN WAS FREE


27%96%93%

of Enterprise Retailers have no automation of backend tracking processes - everything is manual!

of consumers want to track deliveries easily online, but only 65% of retailers are offering this

of consumers want visibility of the expected shipping date, but only 60% of Enterprise Retailers are offering this

Mobility has ushered in a new era of transparency. From the moment an online order is placed, ownership is transferred to the consumer and the want it now generation expect to be kept in the loop.

PART 5: TRACKING

VISIBILITY OF THE EXPECTED SHIPPING DATE

EMAIL COMMUNICATION THROUGHOUT THE SHIPPING PROCESS

65% 96%

45%

42%

TRACKING DELIVERIES EASILY ONLINE

TRACKING DELIVERIES ON MOBILE DEVICES

ABILITY TO MAKE CHANGES TO YOUR SHIPPING WHILE GOODS ARE IN TRANSIT

TEXT/SMS COMMUNICATION THROUGHOUT THE SHIPPING PROCESS

CONSUMERS WANT

RETAILERS OFFER

86%

92%

81%

26%

93%

71%

64%

59%

A Moving Target

20

Participant Profile


Retailer


PART 6: OMNICHANNELMore Than Just A Buzzword

97%of consumers would

shop in store and ship goods home

88%of consumers want to be able to collect

instore

While Enterprise Retailers have more stock and stores to manage, they’re clearly MISSING OUT on a GOLDEN

OPPORTUNITY to utilise their physical footprint and maximize efficiencies in their supply chain.

SHOP IN-STORE AND SHIP TO CUSTOMER

40%

SHIP DIRECTLY FROM STORE

ACCEPT RETURNS IN-STORE

VIEW IN-STORE INVENTORY ONLINE

BUY ONLINE AND PICK UP IN-STORE


38%

25%23%

21%

31%

29%

27%

27%

27%

31%

44%

18%

20%

39%

39%

34% 34% 33%31%

21

Participant Profile


Retailer


Where Do Retailers Ship From

25%27%

ONE WAREHOUSE 38%

38%

46% 48%

ONE STORE

20%

20%

8%

8% 7%

0%

MULTIPLE STORE 4%

6%

SUPPLIERS

DROP SHIPPERS/THIRD PARTY LOGISTICS PROVIDERS

MULTIPLE WAREHOUSES 60%

10%

9%

11%

11%

14%

14%

13%

13%

0%


22

Participant Profile


Retailer


35%33%

of Retailers accept returns instore

of Retailers offer Click & Collect

ONLY

ONLY

7 in 10 UK consumers would utilise a home delivery service if the goods were too heavy but only 30% of furniture and homewares retailers offer this service

View in-store inventory online

61% of retired couples would have an item delivered to their home if it was not in stock in-store

61% of mid-level retailers and

73% of enterprise retailers AREN’T shipping from their stores

of consumers want SAME DAY SHIPPING - hyper-local delivery is key

Omnichanel Preferences:

Inventory visibility and accessibility is the great enabler of contemporary commerce

MICRO

21%ENTERPRISE

27%SMALL

18%MID

29%

23

Participant Profile


Retailer

78%


SUMMARY

Shipping and fulfilment has evolved from a back-of-house operation into a key competitive advantage of today’s leading merchants. Progressive merchants understand the power of a brand to inspire deeply personalized experiences and the value of shipping as the only tangible element of a digital customer journey. New technologies are democratizing experiences reserved previously for the realm of enterprise, allowing SME’s to level the playing field, and focus on lifetime customer value.

It’s an exciting time to be in retail and our research highlights the opportunities that exist to drive real value, both in terms of increased revenue and bottom line efficiencies. Consumers, conditioned by instantaneous nature of mobility, are demanding choice and shipping options that match their busy lifestyles. Only offering Standard Shipping to online

customers may be detrimental to businesses in competitive categories. Convenience is key - weekend, time slot delivery and 1-3 hour shipping are gaining momentum and should be treated as demand generators in 2016.

To meet the expectations of today’s consumers, businesses have the unique opportunity to re-imagine their supply chain and create meaningful, cost effective, customer experiences. The omnichannel and agile fulfilment remain key challenges to overcome with smaller retailers maximizing their operations and footprints more effectively than enterprise. Shipping from stores or multiple warehouses that are closer to customers, enables hyper-local delivery, combined with transparent tracking, convenient returns, and a trusted technology partner will set retailers up for success in 2016.

Intelligent Shipping for the Future of Commerce

Temando’s intelligent multi-carrier shipping platform allows retailers to optimise their existing business systems with powerful shipping and fulfilment technology. For the first time, retailers have the tools to optimise shipping based on carrier, price, location, inventory and much more.

Harness the power of shipping and fulfilment and turn it into a retail weapon.

email: [email protected] web: temando.com

Participant Profile


Retailer

A Neopost Company

mailto:sales%40temando.com?subject=

http://temando.com


ABOUT TEMANDO

temando.com researchnow.com

ABOUT RESEARCH NOW

Temando is a technology company specializing in the production of Shipping Software Solutions for the Retail and Logistics Industries. The company’s integrated shipping solutions enable merchants to access a multi-carrier platform to streamline their fulfilment process, reduce cost and increase sales. The company give their clients the ability to easily quote & book, track shipments, calculate duties and taxes, produce compliant shipping documentation & manifests, all from a single platform.

Temando exists to connect the world’s logistical resources into a single intelligent platform and make commerce universally accessible to everybody.

Headquartered in Australia with offices in Brisbane, Sydney, San Francisco, London, and Manila, with over 50,000 registered users globally, Temando is one of the fastest growing tech companies in the APAC region, as recognized in the Asia Pacific Deloitte Technology Fast 500.

Research Now is the global leader in digital data collection to power analytics and insights. It enables data-driven decision making for clients who listen to and interact with the world’s consumers and business professionals through Research Now’s online panels, as well as mobile, digital and social media technologies. The company

operates in 38 countries, from 24 offices across the globe, and is recognised as the market research industry’s leader in quality, scale and customer satisfaction.



http://temando.com

http://www.researchnow.com

http://researchnow.com

http://www.researchnow.com

state of shipping in commerce 2016 - imrg...contemporary customer journey. traditional,...

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