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MetaPack - Improving the Delivery Experience for Customers


Drawing on research conducted by MetaPack, Vidya will discuss how you can focus on improving your delivery experience for your customers by addressing key issues and opportunities. This presentation will feature case studies showing how different companies have resolved these issues.

 

Transcript

I'm conscious that I'm standing between you and the lunch and I can hear like spoons and forks there and so I'm gonna keep it short but I really hope that what I deliver here will be useful for your business and you learn a little bit more about the delivery experience in general. A note on MetaPack, ok so a little bit of background about myself, so my name is Vidya Murali and I've been at MetaPack for a couple of years now, and my background is in e-commerce, general management and I used to work for a very small retailer for business Seattle called Amazon whom we've been talking about a little bit for more than six years in general management roles. For me it's quite fascinating to actually move from, a kind of a global- a giant to a company like MetaPack where I'm exposed to a lot of retailers, a lot of retailers.

It's fascinating to see how things are done differently; I do feel there's a lot of innovation happening outside Amazon. It's not just restricted to Amazon but I also can apply what's happening in Amazon how decision are made what's the priorities to other retailers when I deal with them in my business. I am and my colleague Artie was here -who's the other Indian girl so you can't miss her. We are responsible for all the retailers outside the really big ones like John Lewis's and ASOS and you know the big guys, our team is doing sales, implementation, we also do account management- so kind of implement for that.

Six years in Amazon and one thing that I learned about running Ecommerce businesses, I used to run a few businesses in Amazon- is what Amazon calls its inputs. And inputs is basically what matters to your customer; pricing, selection, range and customer experience- customer experience largely driven by of course content and site and all the stuff there, marketing funnel -but ultimately delivery experience and if you note Amazon Prime, Amazon Prime is by far the most strategic program in Amazon- even now. There's been other programs of course, Kindle you know, AWS, but Amazon Prime is the most strategic program. Why it is strategic because Amazon knows the customers on Prime spend more money with them. The stat is 2.5 times so if you're a Prime customer you're spending 2.5  times more than the rest of the customer. As a customer of Amazon I actually search products with a filter on and the filter is a Prime filter so basically I don't even look at things that are not coming to me next day so if you think about it delivery is actually making a lot of impact on the purchasing decisions and we talked about cart abandonment and conversion. It’s great you have a great site, great look and feel, brand- but when it comes to when I'm gonna get it, how I'm gonna get it, am I going to make good use of my time? What's the experience? Delivery plays by far the most important role.

Ok, I'm gonna run through quickly on what the consumers are talking about today. I think Sean has done a lot of favour to me by introducing a lot of stats in this area so you will go like oh it's Vinda’s yes yes yes but just to understand what's the expectation for consumers these days.

Consumers have knowledge and control, we have the Google phenomenon- how many of us search for products in Google and just see like where's the best place to buy most of us do. That is very very different from the generation before. So I read a quote somewhere it's that we have to respect our parents because they grew us up without Google- how true is that? I have a six-year-old and I always find myself going and looking for answers there. People are shopping through Google, they have a lot of knowledge and are comfortable switching, so this is actually very different from the previous generation the Millennials are comfortable switching.

Before it used to be; oh I know this route, the retailer I know them by name, I know who's working here, I know they're credible, they're reliable, I'm gonna go with them. But now it's not the case- Trustpilot we talked about Trustpilot-people going by democratic votes right so it's just you know- I'll try a new brand and see how it goes and with reliable returns and everything  else. So the cost of like switching is not that maxim, that bad so people doing that all the time. It’s all about convenience we have a lot of distractions in this world we want to get the most convenient way as possible at deliveries I can't comprehend me writing to my boss saying I'm gonna work from home today because I'm waiting for delivery hey. Face it we have better options to get things right so convenience is all about convenience yes again  about convenience what I want where I want when I want and more with people like Uber where they can actually understand where you are and they can modify the delivery options based on it so there's a lot of things about you don't have to be at home and you don't have to get everything delivered at home there's also artificial intelligence going on and to predict where you will be tomorrow this time and probably arrange a delivery so things are progressing like that so it's about it's about being very dynamic and very is fluid about where things go um I want a brand experience.

So we talked about Kath Kidston, SMEG -it's all about brand experience and how small things can make a big impact so that's the type of consumer we are talking about now.

I'm gonna share with you some insights from a survey that we did with the consumers the participant was 3,000, and across Europe so it's quite a good data set statistically significant. Some of these stats you might feel like oh I've seen this many times but actually thinking about it these are quite profound stats this one for instance which says, start with returns on intention because I feel there's a lot of attention towards delivery getting your deliveries choices right . One of the areas people many retailers ignore is returns, it's really important to understand returns is as important as delivery in many cases, more important, more so if you’re a fashion brand. So this one says 81% of customers would shop more if the return is easier so for retailers would hire a proper returns portal or a way to kind of do it automatically this already kind of put some of the tests on that ditch and if you look at Amazon return centre by the time I drop the my parcel into a corner shop collect plus I get the refund because I'm a Prime customer so that's kind of the friction that’s experienced that experience the customer expect and forget Amazon right so Amazon just like they're doing all these things but go to a offline retailer and shop for a dress if you're a woman and where a shirt you're gonna take three shirts go ahead your dressing room pick one and the return the rest of the two chests by you know giving it to somebody or leaving it there why should a the experience of returning online products be any different? Why do you have to add friction so return is really important.

This one shows people have changed their view of returns previously returns used to be for something that people are not happy about, a defective product- but now returns is actually a choice people just buy three shoes, four pair of shoes, they know they're gonna return three, they're gonna have one but they do it. You can see for example in UK the 18 to 30 eight year olds more than 40% say yeah yeah I know I know I'm going to return products when I buy and this varies a lot by categories if you look at apparel the return rate is really really high so written something pretty low should view as a part of experience rather than a inconvenience to have or a cost, making it difficult is not going to improve your profitability it's going to bring down the revenue and customer retention.

So again more than 70-80% say they look at the retailer's return policy before they order, they can see some variances by countries but not so much- it's kind of consistent trend. Again a large number of customers 60-70% of customers across Europe say they have not shopped because they did not like the returns policy.

Returns don't have to be free, even delivery options will have to be free in UK in particular there is sort of expectation for free delivery and you know at some point everybody has to get free delivery but these this stat shows for a premium more convenient with an option, people actually willing to pay so you know it's about getting your price point right and being like competitive but it's not always about price. Again 90% of consumers said that a poor delivery experience would encourage them to shop again so more repeat rates, better lifetime value, all this money that goes into marketing to improve your customer retention-I think the delivery experience a big plays a big role in that.

This is quite interesting I don't think slotted delivery has taken off so much and as much as I would have expected to. But it's very much in demand this is a thing where you don't want to stay at home to receive a parcel you want to know when exactly you get it you want to half a one hour time slot, half an hour time slot. Some people do that- DPD in particular does it very well and in kind of make in real time you can change the slots but it's not widely there but comes from a consumer point of view 80% percent say I want a slotted delivery and 82% percent of them say it’s important to track their parcel.

There's kind of the summary’s tab which says 66% percent of consumers have brought goods from one retailer over other, because they had more delivery choices and we will see a bit more about what on an average how many delivery choice of the consumer uses but this is like a really staggering stat.

So we ask consumers have you ever used these delivery services in the past year and you can see the percentages if you look at UK for example still largely more than close to 90 % percent use home delivery but collect from store 50% you have some book delivery, local shop a lot and you know locker not so much but get it the same day yeah. So  if you're a retailer looking at this graph- if I were retailer I would be thinking do have at least the basics  like the top 4 or 5 delivery choices on my website so you know we can satisfy a large number of consumers expectations- that's something to question do you have these on your website?

Again this about basket abandonment- you know have you just abandoned your basket because you are not satisfied by delivery options that was provided. Around 60% say yeah I have done that and I have personally observed when I was leading a business in an Amazon we did the marketing funnel that Sean referred to and we saw where the customers were dropping. Of course it's like a spider web people look at help blah blah but when it came to delivery options that's where the maximum drop-off force something like one-third. After introducing collect plus it kind of improved drastically so that is a real, real leverage that retailers have to pull to make it work for customers for them to convert customers into buying.

So retailers- so this again shocks about pricing, basically consumers are willing to pay more than 49% percent of consumers that we can pay more if it's a better delivery service and then  they also this this some ranges and like pricing like how much they are willing to spend for standard in UK the large the expectation will be free but some again half of the customers feel that they can pay and there's like you know what euros? One, two, three euros- are they willing to pay for next day a little bit higher again this day- say the same thing there.

45% of consumers have consciously bought products from retailers overseas in past six months. This was interesting because there's no there's the stigma and towards buying outside the country seems to be vanishing quite quickly and what it means there's two things, one is UK retailers have a lot of competition because the consumers are not just buying from you they're going to buy from retailers elsewhere, but it also means that the retailers elsewhere the consumers elsewhere was will be more than happy to buy from you which means it's really important to get your international proposition right. Having the right delivery options, having tracking delivery and making it work for you financially is important.

Now retailers understand it and if you have worked for retailer, or if your retailer you know you track yourself on a daily basis and understand why your sales going up or down right so it's 95% percent of the retailers has say they help they plan to invest in delivery over the next 12 months so that's a big area for investment and that's definitely on the radar for retailers and we further looked into how the perception the first within a retailer in terms of people from supply chain logistics and e-commerce. You can see that some commonalities and both of them agree on precision convenience but the main area of difference seems to be speed. Ecom people believe in speed next day ,one hour delivery while it's not so so much of a key thing for supply chain and packaging seems to come out for supply chain but not so much for e-commerce so it's kind of worth thinking about this in the in the context of what consumers expected.

So to summarize for retailer what should be the delivery priorities? At a very basic level meet your customer promise nothing worse than having all different options but not meeting a customer promise. Offer choice and convenience so at least the minimum people are using five different delivery choices on average make sure you have those five and make sure it's kind of tailored to your product to your customer. Personalisation to scale if I live in a postcode and I prefer to pick up from a corner shop that's what I want to see, I don't want DPD ringing my doorbell when I'm not available so making sure that you are tailoring your delivery choices to customers really important.

Digital and physical talked about like you know consistent channels and compelling international options and last but not the least don't forget returns- it's as important as the outgoing delivery. Lots of people think of customer delivery experience as a linear thing actually it's not a linear thing it's a circular thing and when I looked at Sean's presentation and he showed the customer buying decisions McKinsey updating the slide I was smiling because it's pretty much that.

There’s website so we all have web- retailers mostly have websites these days. There's warehouse and that's where we kind of store stocks and deliver and fulfil, call centres, we kind of have people talking out to customers and then this consumer writing in the houses or it could be somewhere else waiting for. These are the key touch points of customer experience, very simplistically these are the stakeholders these are this- these are these touch points. At the website creating a promise so you buy a product say book- if you're really passionate about you want to read at as soon as possible so you go for next day delivery so you're given a promise as a consumer and for you to get that product next day and that's a promise that the retailer makes to you so it's about creating the promise. Who does the fulfil thing, the promise- the warehouse guys they're picking the fulfilling and making sure that it's going to reach on time and the allocating to the right carriers and services that can take you take this product from a to b and that's not it just does not it, this call centre- so people are always tracking always tracking ,where's my product this small where is my order is the top reason for customer support queries so the call centre people are managing the promise so yes you're gonna get it on time or no sorry we have to sorry to say this been a kind of a delay but you're gonna get a freebie so they manage your promise in some way or another and then you deliver in the house or in the workplace and that's when you extend the promise extend the promise so the customer can come back to you and buy more.

So in terms of their MetaPack then or in general any delivery management solution. Person has creating a promise we have delivery options it's just not just going to show a static list of delivery options to all customers- it's dynamic it shows what's available based on the carrier bloating about based on available based on your postcode, available based on the product, based on the country shows what is the best delivery option for you in a nice map format which customers love. In the warehouse carrier's labelling- this is a bit of a boring stuff but the most important stuff in keeping the delivery going and reducing defects. So you allocate to maximize your cost efficiency allocate to maximize speed you print the label manifest to and fro with the carriers, call centre the call centre guys can see what's going on with tracking and they're able to give the most up to date information at the customer with a rings up and then they're all intra dependent. Finally it's about returns having a great returns then experience means they come back to your site more and buy more. So it is a circle it is a virtuous circle but a vicious cycle - virtuous circle and by getting every touchpoint right you're going to have more customers coming back and buying more.

Another thing that to notice we talk a lot about website and content, just think about the time spent by the customer on the website when they buy a product it's probably five minutes, ten minutes an hour. Well think about that time they're actually spending on other all the other things; waiting for the parcel calling the call centre, making the return so they are -the retailer in the mind of consumer for a long far longer period when they are not on your website than on your website when the one-state edition so it's as important as you know getting your website right.

Okay I'll be quick, I'll be quick I just want I want to kind of introduce you the concept of multiple multi-carrier it's different from many carriers- a single carrier typically is a B2B with one carrier you are your shipping consignments it just make sense to have one carrier. Many carriers means you have like couple of carriers in this case UPS and FedEx and you can kind of allocate between them based on size or whatever. Multi carrier is not actually having many carriers it's about having many services within those carriers if you see for each of this delivery options you have many services what this allows to you to do is this you can optimize your allocation to maximize cost efficiency you can have backups so if one of the carrier's not working you can go to the next one some of carriers 's don't deliver some postcodes you have other and also it helps you personalize so it might be easier to use a specific carrier for a specific customer order and might be quicker that way and when it gets to international it gets even more relevant because international  it's normally very expensive to use a single carrier because international carriers specify and specialize in certain lanes and they've made themselves cheaper in certain lanes so the more carriers and more services you have the better the cost efficiency and deliver experiences.

These are some of these delivery innovation I'm not going to go into detail I was planning to play a video but I'm not going to I think I'm learning from experience and but hey- who thought you Uber would deliver goods, who thought Amazon would have a fulfilment centre and fulfilment logistics company and they probably got to open up for the retailer's as well drones I should say I'm not a favourite drones I don't feel like they'll become mainstream but hey we all talk about it so it’s there innovation. In flight options- DPD I've personally tried that it really works I'm happy that they exist- doddle again great innovation, one hour delivery checkout with Amazon is again great- so everyone can offer the same level of delivery experience as Amazon.

Again I'm not going to talk in detail but just a flag there are several carriers who specialize on several needs until my needs for example international I don't know if you have a lot of direct injection but if you're a retailer looking for international what comes to your mind is DHL- but actually there are cheaper based, more efficient ways a little bit more expensive than the local post, but allows tracking and it gets the product in in less than the you know  to 10-15 day’s time line. Good example is W indirect they've negotiated really low rates with some lanes, some countries to ship to Dublin there it is far more cheaper and more efficient and they only getting better with paperwork and everything that is having friction so something to think about.

Gorgeous shop is an example so they sell luxury hair care and beauty, they've grown tremendously in the last few years they've used MetaPack there's challenges that they got resolved by using MetaPack it's all automated enough so they don't have to worry about manually like allocating orders they can now have an automated logic to use different services in different countries which in turn means they can focus on what humans do best which is taking decisions I heard somewhere now and less of paper work so that's what they do and it results in an increased repeat business increased automation, less friction going global.

 River Island household name the challenge that they had was the systems they use did not align their in-store orders and their website orders which means they are not able they have to do a lot of manual allocation basically and when they thought about international expansion they didn't have much choice to provide so they bought MetaPack managers a core allocation and optimization product they also have MetaPack options which means they can now do pick up and drop offs from international- they offer around eight internationals choices for the customer which is great they have seen increased repeat trade off up to 51% and the conversion went up by 18%  percent so these are really staggering results very happy customers of us.

Now this is not a sales plug but it's a way for you to see what is all these innovation going to mean to you tangibly what can you do about it what can we go out and get a new carrier service and how can you kind of satisfy a consumer and these are great examples for that that- I'm finishing thank you so much Arty and I will be around so if you have any questions feel free to come and get us.

 

 

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