VIDEO | Delivery increases loyalty – so why are merchants not focusing on it?

News Technology Video Interview

Consumers’ expectations are a hard thing to get right, but when we do the benefits are many. Delivery is becoming a key differentiator for retailers, and more should focus on the emotions created by a great delivery experience. We speak to Mike Richmond, Chief Commercial Officer at Doddle, about how emotions drive profitability in e-commerce and what it means to create a positive customer experience. More from our January 2023 edition here.

Mike, what is the role of emotion when it comes to e-commerce orders?

It’s obvious that if you have a good experience, you’re more likely to repeat that behaviour and if you have a bad experience you’re less likely to do it again. What we think is less understood is how that emotional experience works in the last mile, where deliveries can be stressful and uncertain: when will it arrive, where is it now, will it be in time, et cetera.

If I’m a merchant, I need my customer to be feeling confident and happy after they spend their money – before and after they receive the products I’m selling. If I’m unable to provide positive emotions for a consumer, then they are not going to be valuable to my business. Consumer emotions are really important in retail and the delivery process can have a significant effect on the overall experience.

How can logistics companies navigate all of these and make sure that whatever they deliver produces satisfaction and happiness?

What I don’t currently see in the delivery sector is a focus on the impact (on the merchant particularly) of positive or negative customer experience. If you ask a merchant about the customer’s value by delivery option, customer satisfaction rating or the average basket size they very often don’t have access to this information. Many retailers do not investigate loyalty in the context of delivery.

Working with one of the UK’s leading online merchants, we found that 70% of customers who use PUDO are twice as valuable as home delivery customers. They are a more valuable customer segment and have a higher basket value and a higher order frequency. The conversation around this is not something we have enough in e-commerce.

Some of this data is relatively easy to collect and analyse. But the part around consumers’ emotions is much harder to access. How can companies collect it and understand it better?

We can see what the value of a specific customer segment is, but understanding why is much harder.

We hypothesise that customers who order online often prefer PUDO because they don’t want the anxiety of needing to be at home to receive a delivery, and they often have many orders on the go at once – hence their higher value to merchants. Investigating that hypothesis is much more difficult, but the best way to do it is by asking your customers. It can be done by post-purchase survey emails or a more general insight survey.

Once a retailer disappoints a consumer, they are unlikely to return. But how can companies bring back those customers who have already been disappointed?

If you have had a bad experience because it was costly or difficult, it’s unlikely that you’ll return to that company. In addition, we need to consider peer-to-peer messaging. A disappointed consumer will share their bad experience with at least another 3 to 5 people.

How to re-attract those customers is a very difficult question. It costs a lot of money with promotional activities. But depending on the scale of the issue, customers might also forgive after a period of time, and might be willing to come back to the same retailer.

By relying on PUDO don’t merchants give away the most valuable part of the experience and rely on someone else’s network?

Retailers are already giving away the control to a carrier. If you buy something from ASOS, for example, it will be delivered by Yodel. Yes, potentially there is another partner in the supply chain like a post office or a pickup store. Regardless of that, the end-to-end delivery experience has already been outsourced to somebody else.

We should also look at control from the consumers’ perspective. When you buy something online you may get an order confirmation email but you don’t know where the item is until it arrives at your door. If you get the order shipped to a PUDO point, you have significantly more certainty because it’s going to be delivered to your chosen location, and you can pick it up at a time that is convenient for you.

What type of questions and answers should be there so companies can deliver the best possible value to their customers?

It depends on what you want to get out of the survey. Companies should know what the consumer experience was like so they can compare it to other delivery options. But they should also look at the data on how the consumer got to the PUDO. We need to understand why consumers are using a PUDO.

That data allows you to build a picture of emissions. At its core PUDO is more efficient for carriers as they deliver more parcels to a single location. But if 40 people drive to that location, that does not make it more environmentally friendly.

You can watch the full interview with Michael Richmond from Doddle below. ✷

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