Company News • 02.07.2015

Consumers are becoming less tolerant of service issues

Almost half of UK adults have experienced problems with online orders in the last year

Consumers are becoming less tolerant of service issues...
Source: Centiro/JDA

Almost half (47%) of UK adults online admitted to experiencing problems with online orders in the last 12 months, according to the JDA/Centiro ‘Customer Pulse 2015’ Report.

Of those shoppers who had experienced problems, nearly half (46%) reported late deliveries; 40% stated they had received a missed delivery card despite being at home to receive and order; while 30% said they never actually received their goods. At a time when consumers are doing increasing amounts of shopping online, the survey reveals that they are also becoming less tolerant of service issues. Indeed, 71% of respondents said that as a result of a poor shopping experience they would be likely to switch to an alternative retailer when next shopping for products online.

While much of the talk from retailers surrounding home deliveries has concerned the importance of rapid or same-day delivery, the research revealed that cost (50%) and convenience (25%) remain most important to those who had ever shopped online, rather than speed (18%). Furthermore, nearly half of respondents (46%) who have made an online purchase in the last 12 months said that in this time they had chosen to shop with a retailer that offered multiple delivery options over one that only offered one option.

In fact, a third (33%) of respondents said they would be likely to pick a retailer specifically on the basis they can offer a particular slot for delivery (at an extra cost), over one which offers just free delivery. It’s interesting to note that even once an order is placed and is being shipped, convenience is still a factor for consumers – 20% of respondents who have ever shopped online said that being able to change the delivery date or timeslot after an order was shipped was important to them.

“As online retail continues to grow, so too have consumers’ expectations. What they want is an ‘anywhere, anytime’ fulfillment service that is convenient and reliable. No longer are consumers prepared to wait at home for a courier to deliver a parcel, or wait days before they can visit a store to collect their goods. Today’s consumer is not only dictating how and when they would like to receive goods, but reserving the right to make adjustments up until the last minute,” said Jason Shorrock, retail strategy director at JDA.

“It is clear that consumers will vote with their feet if their expectations aren’t met. For instance, the research shows that more than half (56%) of those online shoppers who experienced problems at peak times in the last 12 months, such as Black Friday and Christmas, said they would be unlikely to shop with the same retailer this year. This underlines the need for retailers to ensure customer service excellence is maintained all year round, even during testing peak times.”

Returns experience becoming increasingly important

Interestingly, the convenience of returning items purchased online is influencing where consumers shop. The research found that a significant number of UK adults (63%) said the ease of being able to return items factors into which retailers they shop online with. Of those who have shopped online, common frustrations with returns include having to pay for return postage and packaging (37%) and having to return items by post or wait for courier (24%), followed by an inability to return goods to a store (15%).

When it came to online fashion, the biggest sector for returns, 22% of shoppers were buying more than one size or colour of the same item in a typical order; this compares to 29% in 2014*.  However, more than half of respondents (55%) who have bought clothes online were still returning a least one item per year. Most popularly, respondents were returning 1-2 items per year (28%), with almost a fifth (17%) returning 3-5 items. Considering the physical cost of handling returns and the need to markdown returned goods, this is potentially losing UK online fashion retailers up to £3.2billion annually, according to JDA estimates on the average cost of returns.

“Retailers need to move away from treating returns as simply a cost-recovery exercise, instead they need to adapt their processes to take into account consumers’ ever-changing buying habits. Today, it is common for customers to buy multiple items online with the intention of sending some back.  The research clearly shows the returns experience is having an increasing bearing on who consumers shop with online,” said Niklas Hedin, CEO of Centiro. 

“Retailers should look at returns as a further opportunity to enhance the customer experience. In the same way that today’s omni-channel environment is allowing consumers to buy items where and when they want, they would like the same flexibility when it comes to returns. This could be returning goods to a store or specifying a location and/or time for a courier pick up.  By capturing this information, retailers can start to personalise the returns experience and create more value for the consumer and themselves.”

‘Click & Collect’ growing pains

The research revealed that nearly half of respondents (49%) who have made an online purchase in the last 12 months had used ‘Click & Collect’ services. Of those who had used ‘Click & Collect’, the most common reason for doing so was to avoid delivery charges (57%); this was closely followed by the fact it was more convenient that home delivery (55%).

However, the research also highlighted that nearly half (47%) of ‘Click & Collect’ shoppers that have used the service in the past 12 months encountered issues that potentially damaged their customer experience.  This is a noticeable increase from last year (32%)*, highlighting potential growing pains for retailers as they have attempted to scale their ‘Click & Collect’ operations over the last 12 months. Of those who have experienced problems, the most commonly cited were long waiting times due to a lack of staff (32%) followed by staff being unable to locate items in store (30%).

“Online retail continues to be an extremely competitive battleground. The winners will be those retailers that can offer a reliable and convenient fulfillment service to consumers, rather than simply focusing on speed and price. At the same time, escalating costs and ever-increasing competition is putting pressure on retailers’ already squeezed margins.

Retailers must think hard about the configuration of their supply chains, 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. Consumers have undoubtedly thrown down the gauntlet to retailers, it is now up to them to meet this challenge in a profitable manner,” added Jason Shorrock.

Download the Customer Pulse Report here.

Source: Centiro

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