BearingPoint - right delivery strategy essential for online success

UK consumers (63%) are almost twice as likely as their German counterparts (38%) to either abandon their online shopping basket or switch retailer if delivery options are too slow or don’t meet their needs, according to a new BearingPoint report.

Things get worse for retailers with frequent shoppers, who are up to 2.5 times more likely to switch or drop out than those customers who only shop online once a month.

The report, based on a survey of 3,000 customers in the UK, France, and Germany, also found that speed is the least important factor when choosing a delivery option, with price (up to 70%) and location (up to 28%) the most important features.

BearingPoint also found that when retailers do get their delivery options right, customer loyalty significantly rises, with the majority of shoppers in the UK (91%), France (87%) and Germany (83%) visiting their favourite sites first when online shopping.

Stuart Higgins, Partner at BearingPoint, says: “The right delivery strategy is essential to the success of your online retail business in what is an increasingly competitive market.”

“It promotes customer loyalty, helping you to grow and maintain your customer base, and enables you to control margin and balance service levels. However, as our research demonstrates, getting your delivery strategy wrong could result in lost customers and sales, margin erosion and falling short of customer expectations.”

He adds: “With delivery preferences varying widely across the three European countries we surveyed, there is no “one size fits all” approach as delivery offerings provided by retailers must reflect the business you’re in, where you operate and your customers’ specific wants and needs.”

Home delivery is, in most cases, the preferred delivery location.

But the report also found that in the UK and Germany, Click and Collect customers say they prefer collecting their items from the retailer’s branded store (34% of customers in the UK and 25% in Germany), driven by security and the ease of returning items, where needed.

However, in France, the supermarket is the top choice (27% of customers would choose this as their favourite pick-up location), and only 21% prefer to collect from the retailer’s store.

Customers say this is driven primarily by convenience. In all three markets tested, younger shoppers (18-34 years old) are more likely than other age groups to want to collect from the store from which they ordered than from other locations.

Higgins concludes: “Our analytics show that, across a series of products and shopping missions, you can reduce costs, manage operational capacity and increase customer retention by offering customers a suite of delivery options that covers all their different needs and buying behaviours.”

“This will combine an appropriate mix of fast options at suitable prices and slower options priced more cheaply.”

“By doing this, you can meet the needs of all customers, without overserving them and therefore losing margin. By wasting less products and making better use of resources, retailers can also create a more sustainable fulfilment chain.”

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