Study: Two-Thirds Of Aussies Base Online Shopping Decisions Based On Delivery

Study: Two-Thirds Of Aussies Base Online Shopping Decisions Based On Delivery
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Nearly two-thirds of digitally savvy consumers report basing a purchase decision on delivery options. And they warn that they often abandon shopping carts before orders are submitted if the process is cumbersome.

The findings, from an Accenture study called Differentiating Delivery: How to Win the eCommerce Battle, suggests that the right delivery partners, easy website navigation and multiple shipping options are critical success factors for etailers.

According to the 2015 Worldwide Retail Ecommerce Report from eMarketer, retail ecommerce accounts for 7.3 per cent of the total 2016 retail market worldwide. This number shows a 25 per cent rise from 2014 and is expected to increase significantly to 12.4 per cent by 2019.

The Accenture study examines the increasingly competitive delivery market that has emerged from the continuing growth in online shopping. It also identifies strategies to help postal organisations and shipping companies to retain and gain market share.

One key finding of this study is that to remain competitive, organisations need to make effective, dependable delivery options a priority.

The authors argue that to reach this goal, delivery companies and postal organisations should focus on five areas:

  • Happy customers–A majority (79 per cent) of survey respondents said that easy and affordable returns services together with full visibility tracking are the most important features to offer. New customer services that are of greatest interest to Australian etailers include late daily pickup times to process more orders on the same day, two-way communications between delivery provider and customers to coordinate a successful delivery that excludes the etailer, and the ability for customers to select a convenient delivery day and time.
  • Parcel returns– Accenture’s research found that consumers want better return options services and would shop more with an etailer that made returns easy. etailers placed return capabilities among the most important criteria when evaluating a delivery provider.
  • Price intelligence– etailers are not only highly sensitive about angry customers, they are equally sensitive about the price of shipping packages, according to the study. The top reason for etailers to stay with one provider is to consolidate volume to secure the best discount on price (cited by 73 per cent of respondents). The study recommended that post and parcel organisations should test volume discount levels to make sure they offer terms that promote etailer exclusivity or primary provider status. Also, the right digital tools, particularly analytics, can help determine smart pricing decisions.
  • Segmented features– As companies grow bigger, the complexity and diversity of services they require increases rapidly. Larger etailers are significantly more interested in services like warehousing and fulfillment or onsite installation of purchases compared to smaller businesses. While basic delivery services are sufficient to capture smaller businesses, more robust features will be necessary to help these businesses as they grow. Properly segmenting customers to develop targeted products to address specific needs are essential to winning the price and feature battles.
  • Cross-border easiness– Post and parcel organisations need to customise their offerings for cross-border, business-to-consumer ecommerce, a market that is anticipated to grow to $994 billion by 2020. These new cross-border shoppers have different needs and expectations, including predictable delivery dates and costs. Providers that ensure seamless simplified and reliable international delivery services will quickly become the primary and preferred provider that etailers seek. Two-thirds (65 per cent) of Australian etailers offer international shipping, with more than half (54 per cent) using paper to prepare required customs documents (compared to 38 per cent globally).

Online retailers were nearly unanimous in seeing online sales growth of at least 2 per cent. Nearly half (46 per cent) of global respondents said they projected double digit annual online sales growth.

While ecommerce is growing at a slower rate in Australia (62 per cent of respondents forecast online sales growth of under 10 per cent), investment is still planned. The majority of Australian medium businesses (96 per cent) and large businesses (100 per cent) indicated their intention to invest in ecommerce to boost online sales, according to the study.

“Etailers are chasing a rapidly expanding market, in which delivery is becoming a critical differentiator and a strategic priority,” said Kal Marshall, who leads Accenture’s ANZ post and parcel business. “There is no doubt that etailers are getting strategic about delivery and so should parcel delivery organisations.”

The research said that delivery impacts all stages of a consumer’s buying process, increasing the pressure on retailers to provide a seamless online process to purchase and return products. The study showed that two-thirds (66 per cent) of consumers have chosen a retailer based on the number of delivery options and three-quarters (76 per cent) look at a retailer’s return policy before completing an order.

More than one-quarter of respondents (26 per cent) said they use at least three parcel providers to ensure the best price and to mitigate the risk of lost packages or delayed delivery that might result from relying on a single provider. The percentage is much higher in Australia, with 75 per cent of etailers reporting using multiple delivery partners. Notably, etailers using only one delivery provider were nearly unanimous (96 per cent) in trusting Australia Post more than other private postal services.

While an overwhelming majority (83 per cent) of businesses surveyed reported being satisfied with their current primary delivery provider – most likely to be DHL and Australian Post – the study found that many etailers are turning to marketplaces like Amazon to reach more consumers and increase revenue, adding to an already crowded and competitive marketplace. In fact in Australia, 43 per cent of respondents use a marketplace to manage order fulfillment, and 87 per cent of respondents use Amazon to sell their products.

“Not only are marketplaces moving into the delivery space, but major retailers are now sidestepping delivery providers in favor of their own services,” Marshall said. “Digital is dramatically blurring the boundaries between etailers, marketplaces and delivery providers. Adapting to these new threats as well as new opportunities is not only urgent but critical to future growth of parcel organisations.”

This article originally appeared on B&T’s sister business site www.which-50.com

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