Increase in delivery issues risk alienating customers; however retailers are beginning to reap the rewards of Click & Collect investment

More than three quarters (78 per cent) of UK adults would likely switch to an alternative retailer when next shopping for products online if they have a poor ordering experience, according to the third annual JDA/Centiro Customer Pulse 2017 Report conducted by YouGov (tweet this). This comes at a time when problems with online orders are on the increase: more than half (56 per cent) of the UK adults surveyed had experienced a problem with an online order in the last 12 months, an increase compared to 53 per cent  in 2016[1] and 47 per cent in 2015[2] (tweet this). Of those who had experienced a problem, 42 per cent had experienced late delivery, 37 per cent had missed a delivery despite being at home, 25 per cent never received an item, and 24 per cent received a damaged item (tweet this).

Retailers continuing to perfect the art of Click & Collect

The research reveals that retailers are addressing the problems customers were previously having with Click & Collect. The number of UK adults that have used Click & Collect in the last 12 months and experienced an issue with the service fell to 43 per cent; down from 45 per cent in 2016, and 47 per cent in 2015 (tweet this). Among those that experienced problems with a Click & Collect order within the last 12 months, 26 per cent cited long waiting times due to a lack of staff (down from 35 per cent in 2016) and 18 per cent said staff had been unable to locate Click & Collect items in store (down from 32 per cent in 2016) (tweet this).

These positive steps are being made at a time when Click & Collect use remains high – with more than half of the UK online shoppers surveyed (54 per cent) stating they had used Click & Collect in the last 12 months (tweet this). Retailers are also now beginning to realise additional benefits from Click & Collect, with nearly a quarter (23 per cent) of these users stating they had made an additional purchase in-store when picking up a Click & Collect order (tweet this).

“As the data shows, UK retailers face a challenge on several fronts when it comes to online shopping. Fulfillment and ‘last-mile’ issues continue to hinder retailers’ efforts at a time when consumers are becoming increasingly intolerant of poor service. Today’s shoppers expect retailers to offer a high-level of service across all channels – those retailers that fail to keep up with demand put themselves in serious danger of being left behind,” said Jason Shorrock, vice president, retail strategy EMEA at JDA. “However, it does appear retailers’ continuing investments in Click & Collect are starting to pay off. Almost a third of UK adults made an additional purchase when visiting a store for a Click & Collect item, which demonstrates the new revenue streams that can open up when a customer sets foot in a physical store. In the online age, some might argue that footfall has lost some of the importance it once held, but these figures could signal the start of an about-face.”

Returns remain a retail headache

As reported in CEO Viewpoint 2017: The Transformation of Retail (JDA/PwC), almost three-quarters of global CEOs stated that handling customer returns was impacting on profits[3]. This year’s Customer Pulse study revealed that a third (33 per cent) of UK adults who shop online return up to two non-grocery items a year, and 25 per cent return three or more non-grocery items a year (tweet this).

The most popular reason for making a return among UK adults was due to items not being what they were expecting (38 per cent). This was followed by the item being faulty (32 per cent) and the fact that they ordered several alternatives with the intention of returning the items they did not want (17 per cent) (tweet this).

“Effectively dealing with returns can’t be ignored. The research shows that for nearly two thirds of consumers, the ease of being able to return items factors into who they shop online with,” said Niklas Hedin, CEO of Centiro. “Retailers need to see returns as another customer touchpoint, and a way to make a positive impression that engenders greater customer loyalty. It will be those retailers that offer a full-circle brand experience that will capture the larger share of customer wallets.”

People ‘getting real’ about delivery charges

With the cost of fulfilling orders being increasingly identified as a pain point by retailers, many of them have started to introduce minimum order thresholds for free delivery. The CEO Viewpoint 2017: The Transformation of Retail (JDA/PwC) revealed that 62 per cent of CEOs plan to raise minimum order thresholds in 2017, up from 39 per cent in 2016. In comparison, the JDA Customer Pulse research reveals that shoppers are adapting to these changing conditions which is encouraging for retailers. Seventy-five per cent of UK adults would be willing to exceed a minimum order value to qualify for free delivery (tweet this).

Mobile investments set to pay off

The research highlights the fact that a growing number of consumers are embracing mobile as part of the retail experience; nearly half (46 per cent) of UK adults are using mobile devices in stores (tweet this). 30 per cent of them use mobile devices to check/compare prices, 22 per cent read product/service reviews on a mobile device, and 21 per cent use a mobile device for entertainment while queueing. The research indicates the use of mobile will be central to shoppers’ interactions with retailers in the future. When asked about the technologies they will use to interact with retailers in five years’ time, the most popular was mobile (30 per cent).

“Now is the time for retailers to make difficult decisions if they want to ensure long-term profitability. The days of trying to be ‘all things to all people’ are coming to an end. To get ahead and stay ahead, retailers need to think smart – finding the perfect balance between cost-effectiveness and a great customer experience. For traditional ‘bricks & mortar’ retailers especially, this remains a challenge with the likes of Amazon eroding their market share. However, by developing a deeper understanding of customers and all fulfillment channels, retailers can start to win back customers and revenue,” continued Shorrock.

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,070 UK adults. Fieldwork was undertaken between 29th – 30th December 2016. The surveys were carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

1 JDA/Centiro Customer Pulse 2016

2 JDA/Centiro Customer Pulse 2015

3 CEO Viewpoint 2017: The Transformation of Retail (JDA/PwC)

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About JDA Software Group, Inc.

JDA Software is the leading provider of seamless supply chain planning and execution solutions for retailers, manufacturers, logistics providers and wholesale distributors.  Our unmatched solution portfolio enables our clients to reduce costs, increase profitability and improve visibility so they can deliver on customer promises every time.   More than 4,000 global customers run JDA, including 73 of the top 100 retailers, 71 of the top 100 consumer goods companies, and 13 of the top 16 3PLs. With JDA, you can plan to deliver.  blueyonder.com

About Centiro

Centiro is the leading innovator in cloud-based transportation and delivery management solutions. Centiro’s products empower companies and finer supply chains in more than 125 countries. The company has won several awards and accolades over the years and is ranked as one of the best places to work in Europe by Great Place to Work®. For further information, please visit: www.centiro.com.

 

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