Offer your customers what they want, when they want it
Offer your customers what they want, when they want it Offer your customers what they want, when they want it I December 2014 2 E-commerce gaining in importance Contents E-commerce gaining in importance 2 What does the online consumer want? 3 Meeting customer expectations 4 Choosing the time of delivery 5 Successful examples 6 Opting for diverse delivery locations 7 Solutions from bpost International 8 Overview 9 The revenue generated from e-commerce worldwide increases year over year. More than half of the world’s Internet users buy online.1 In 2014, 1.2 billion online shoppers will have spent 1.15 trillion euro on online purchases. And at an average global rate of growth of 20% per year, the rise of e-commerce shows no signs of stopping. eMarketer predicts that the rate of growth in China and India will reach 43.3% and 30.3% respectively in 2015.2 There is also an enormous potential for the growth of cross-border e-commerce. The global revenues generated by cross-border e-commerce stand to increase from 64 billion euro in 2014 to somewhere between 200 and 280 billion euro in 2025. In Asia, cross-border e-commerce already accounts for 40% of e-commerce revenues. In Europe, one in four online consumers already shops across national borders, while in the U.S. the figure is one in five. For companies active in B2C e-commerce, it is becoming more important than ever to have an online presence, both within and beyond their country’s borders.3 Percentage of cross-border revenues: Asia 40%* * ** ercentage of cross-border in total e-commerce revenues. p percentage of cross-border e-shoppers. Europe 25%** U.S. 20%** Offer your customers what they want, when they want it I December 2014 3 What does the online consumer want? If an e-tailer seeks to be successful, it is important to know the online consumer. Why do people shop online? Research shows that the primary reasons to buy online in one’s own country are lower prices and convenience.4 As many as one in four Australian online consumers claim to be less inclined to shop in a physical store.5 For 73% of Swedish consumers, shopping online is seen as the simplest way to shop.6 If we look at online shopping internationally, other factors become apparent. For four out of five shoppers, price is also important, but just as many people shop across borders in order to have a more varied choice of products. For example, exclusivity is the primary motivation for 58% of Singaporean e-shoppers and 72% of Canadian e-shoppers to purchase from foreign sites. Asian e-shoppers purchase from foreign sites to ensure they are not getting counterfeit goods.7 When shopping online, delivery becomes part of the overall customer experience. Whereas customers once had no option but to purchase from retail outlets, customers today like to take matters into their own hands. This goes for different aspects of the delivery, such as the delivery time and location. Flexibility is crucial for the online consumer. An Econsultancy8 study showed that half of online shoppers abandon the ordering process before it is complete because they are not satisfied with the delivery options available to them. That customers seek ever more flexible delivery options has also been confirmed by research carried out by AMR9 with Australian consumers. The research shows that when buying online, delivery options are a more important factor than even product reviews. In order to be able to offer online consumers convenience and flexibility, many e-tailers are now seeking efficient logistical solutions. The ‘last mile’ is a complex aspect of physical distribution. Postal networks offer a clear solution in this regard, given that their historical background affords them a well-developed and extensive distribution network.10 The postmen pass by every doorsteps, every day. The first-time hit rate is also of critical importance. In the U.K., 12% of parcels cannot be delivered on the first delivery attempt.11 And yet first-time delivery is a main contributor to customer satisfaction. A good first-time hit rate can be achieved by allowing the customer to choose the time and location of the delivery and to communicate clearly with respect to this throughout the entire delivery process.12 Lower prices Convenience Flexibility Not getting counterfeit goods Varied choice of products Offer your customers what they want, when they want it I December 2014 4 Meeting customer expectations The digitization of our society is proceeding at a rapid pace. These days, consumers are always connected. The ease of access to information via the Internet makes a consumer that is always connected a critical and demanding customer. Research by PricewaterhouseCoopers shows that efficient and reliable delivery leads to an increase of more than 10% in the online shopping budget for each purchase.13 Expectations with regard to delivery time vary from country to country. On average, customers expect to receive their order within 2 to 5 days.14 While in Russia, online shoppers expect to receive their purchases after 7 to 10 days, in the U.S. and Germany same-day delivery is becoming increasingly important. A third of online shoppers in France choose online retailers based on their delivery speed, as well as 20% of the online consumers in Japan. In France, there is even a growing demand for one-hour delivery. The same tendency can be observed in the U.K. In the Middle East and South Africa, “free delivery” and “same-day delivery” were the two most important delivery options for online customers in 2013. Not only the nationality of online consumers, but also their age and place of residence are key determining factors concerning their expectations of delivery time. Consumers below the age of 45 and city dwellers attach more importance to ’fast’ delivery. Expectations also depend on the nature of the order. Consumers have more patience when it comes to international deliveries. If there is a clear advantage to ordering the product from abroad, the consumer is prepared to wait longer for the order to arrive.16 Efficient and reliable delivery leads to an increase of more than 10% in the online shopping budget for each purchase. Offer your customers what they want, when they want it I December 2014 Choosing the time of delivery More and more customers value reliability and want to choose the order gets delivered themselves. Most online consumers in Japan, for example, like to choose the date and time of delivery.17 European online consumers even see time-specific delivery as being more important than fast delivery.18 In a global survey conducted by Econsultancy19, 31% of online consumers stated that they would sooner order online if they could specify a fixed delivery date. The same research showed that 13% favor a timeslot of two hours. European online consumers even see time-specific delivery as being more important than quick delivery. 5 Offer your customers what they want, when they want it I December 2014 Successful examples Coolblue One e-tailer that succeeds in responding to the demand for both efficient and time-specific delivery is Coolblue. Coolblue offers free, next-day delivery as standard in Belgium and the Netherlands as long as the order is placed before midnight, or before 8pm on Sundays. Coolblue delivers 6 out of 7 orders through their partnership with bpost group. Shoppers also have the option to pick up their orders at no cost from Coolblue’s physical stores or from bpost collection points. The title ‘Best Webshop of the Year’ has already been won by Coolblue numerous times in the Netherlands and Belgium and its yearly turnover doubles each year.20 In this example, it has clearly paid to have a flexible delivery approach. Vente-Exclusive Another success story is that of Vente-Exclusive. In 2014, Vente-Exclusive was voted ‘Best Webshop in Belgium’ and was also crowned ‘Logistic Webshop of the Year 2014’ in the Netherlands. Vente-Exclusive was awarded by the jury for its choice not to focus on fast delivery but on an efficient and sustainable process. This allows the organization to give its customers bigger discounts. The business model adopted by Vente-Exclusive is based on offering brand-name products at rock-bottom prices. The logistic side of things is of prime importance as this is the visible part of the service. VenteExclusive works with a delivery time of 12 days on average and charges its customers for delivery, but this cost is compensated by reliably delivering quality products at low prices.21 6 Offer your customers what they want, when they want it I December 2014 7 Opting for diverse delivery locations In Europe, home delivery is generally the most chosen option. But this is not a purely European pheno menon. In Argentina, more than half of online shoppers have their goods delivered to their homes, and it is also the most popular option in South Korea and Turkey. In Sweden, by contrast, online goods are often picked up at the local post office. Generally speaking, delivery to the post office is the second-most popular delivery option in European countries. In the Ukraine, most shoppers opt to pick up their goods from the shop or the post office. In Germany, on the other hand, the click-and-collect method is hardly used, 87% of consumers opting for home delivery. France has a ‘point relais’ option. This allows consumers to pick up ordered goods at a local business. Around 58% of French online consumers avail of this service.22 Although home delivery is still the method of choice in most countries, more and more alternative delivery locations are appearing. In a study conducted by Capgemini, 11% of online retailers worldwide state that they are considering the option of allowing goods to be picked up from automated booths for self-service collection.23 A bpost survey revealed that 48% of Belgians see such parcels lockers as a good solution. In order to avoid parcels being delivered when the consumer is not at home many e-tailers also offer the option to deliver to a retail outlet. The number of such alternative delivery locations will increase in the coming years. U.K. supermarket ASDA, for example, offers their London-based customers the service to have orders made online before noon delivered to their car in a London underground car park after 4pm. ASDA saw online orders sharply increase following this move.24 Home Shop Pick up points Post office Parcels lockers Offer your customers what they want, when they want it I December 2014 8 Solutions from bpost International In the digital age, the customer is becoming more and more powerful and expects to have choice. If e-tailers want satisfied customers, they have to offer sufficient delivery options. This is where bpost International comes in. bpost International is the international division of the Belgian postal operator, bpost. From its hub in Brussels — strategically located in the heart of Europe — the organization is seamlessly connected to all the major air freight operators. This makes it possible to guarantee last-mile delivery within 48 hours to most European countries. bpost International also has hubs in the U.K., multiple locations in the U.S., Canada, China (including in Hong Kong) , Singapore and Sydney and has a presence in four continents through its more than 800 collaborators. Each year, the organization ensures that more than 340 million units reach their destinations in an efficient and safe manner. bpost International takes the local preferences of international customers into account, which, needless to say, can only be of benefit to customer satisfaction. With its network of local postal operators and alternative local delivery providers, the company remains close to its customers. By providing solutions for B2C parcels, business mail, marketing mail and press distribution, the organization is an ideal partner for post and e-commerce deliveries. Argentina 50%+ opt for home delivery Canada 75% of Canadian online shoppers rated tracking as an important part of their satisfaction with their online retailer Overview: France 58% avail of the ‘point relais’ delivery option Belgium 48% think parcels lockers are a good solution South Africa Free delivery and sameday delivery are the two most important delivery options Turkey Home delivery is the most popular delivery option Germany 87% opt for home delivery Sweden Delivery to local post offices is the most popular delivery option Australia 25% are less inclined to make purchases at a physical store South Korea Home delivery is the most popular delivery option Russia Average delivery time of 7 to 10 days Japan 20% find quick delivery to be a decisive factor when choosing an e-tailer Offer your customers what they want, when they want it I December 2014 9 R.E. : Dave Mays, bpost, Centre Monnaie, 1000 Brussels Sources 1 ‘When digital becomeshuman’, Steven Van Belleghem, oktober 2014 2 http://www.emarketer.com/Article/Global-B2C-Ecommerce-Sales-Hit-15-Trillion-This-Year-Driven-by-Growth-Emerging-Markets/1010575 3 Cross-Border E-Commerce Makes the World Flatter, The Boston Consulting Group, September 2014. 4 http://www.business2community.com/online-marketing/3-reasons-consumers-shop-online-0111042 5 Cross-Border E-Commerce Report, The Paypers, 2014. 6 http://www.ecommercemag.fr 7 http://www.attractchina.com/blog/top-reasons-chinese-prefer-buy-luxury-goods-overseas 8 EconsultancyMultichannelRetail Survey 2013 9 AMR Interactive E-Tailing Survey, 2010 10 Evaluation of innovations in B2C last mile, B2C reverse &wastelogistics, Roel Gevaers, 2014 11 http://www.bbc.com/news/magazine-18709348 12 E-commerce and Delivery, an IPC Strategic Perspective, 2013 13 PwC, Demystifying the online shopper, 2013 14 2013 Global Consumer Report, GT Nexus, december 2013 15 Global B2C E-Commerce Delivery 2014, ystatsoktober 2014 &http://www.reportlinker.com/p02120999/Global-B2C-E-Commerce-Delivery-2014.html 16 E-commerce and delivery, EU, CopenhagenEconomics, juli 2013 17 Global B2C E-Commerce Delivery 2014, ystatsoktober 2014 &http://www.reportlinker.com/p02120999/Global-B2C-E-Commerce-Delivery-2014.html 18 E-commerce and delivery, EU, CopenhagenEconomics, juli 2013 19 EconsultancyMultichannelRetail Survey 2013 20 E-commerce op dreef, Value Chain Management, juni 2013 21 http://www.logistiek.nl/Supply-Chain/webwinkellogistiek/2014/9/Vente-Exclusivecom-is-Logistieke-webshop-van-het-Jaar-1602057W/&http://www.dmplaza.be/ nl/2012/12/07/de-crosschannel-day-wij-waren-erbij-voor-u/ 22 Global B2C E-Commerce Delivery 2014, ystatsoktober 2014. http://www.reportlinker.com/p02120999/Global-B2C-E-Commerce-Delivery-2014.html) (2013 Global Consumer Report, GT Nexus, December 2013) (E-commerce and delivery, EU, CopenhagenEconomics, juli 2013 23 2015 19 th AnnualThird-Party LogisticsStudy, Capgemini 24 http://internetretailing.net/issue/internetretailing-magazine-march-2014-volume-8-issue-3/the-final-mile/ 25 http://www.canadapost.ca/web/business/solutions/ecommerce-solutions.page www.bpostinternational.com [email protected] + 32 (0)2 278 50 90
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