Retail Logistics 2021: How to Provide Outstanding Online Consumer Experiences

Retail commerce has changed dramatically in light of the pandemic. So much, that even predictions made in 2019 seem totally out of touch. The additional pressure and uncertainty brought on by Brexit means it’s vital to keep pace with consumer expectations.


 

In November 2020, online sales accounted for 36% of all retail sales - up 67% compared with November 2019 (21.6%). There has been an incredible 50% increase in online consumer spending since the start of the pandemic.

As a result, Amazon has been a big winner. By offering incredible breadth, convenience and speed, the e-commerce colossus has delivered on consumer expectations and enjoyed record sales in the second half of 2020. Despite Brexit obstacles being in the mix, Amazon is trading with relative ease (although EU sales are taking a hit due to charges customers now face, causing some sellers to stop shipping to the continent)—making them the envy of small and medium-sized businesses.

New research commissioned by 7bridges, conducted by YouGov, shows an immediate need and opportunity for retail businesses in the UK to redouble their customer experience and supply chain resilience efforts, making seamless online business a priority.

 

How to reclaim lost 2020 revenue in Q1 2021

The goal of reclaiming vital revenue is at risk by many businesses through an inability to reach consumers and satisfy demand shifting to online shopping. After depressed trading since the beginning of 2020, this poses a threat to brands’ survival that don’t fully exploit the online opportunity. But if businesses act now, they have time to minimise risks and position themselves to benefit from the difficult trading conditions expected in 2021.

 

Ramp up efforts to provide a fantastic online consumer experience

COVID-19 is accelerating adoption and implementation of predicted e-commerce trends so much that any retailer that misses a step, falls behind. This goes for delivery as first preference, storefronts as fulfilment hubs, personalising and automating the online support experience and utilising Artificial Intelligence and Machine Learning to optimise front-end experiences and back-end processes.

Our research shows that shoppers who have a preference for online are high spenders. They spend nearly 169% more than their high-street equivalents. This means that right now, and for the foreseeable future, online is where the profits lie. Here’s where to invest right now to make the biggest business impact:

 

Access to broad product range and selection

The January 2021 news cycle showed us that many retailers simply aren’t prepared for Brexit. Take time to ensure you have the right documentation in place to guarantee the flow of goods, both into your stockroom and the consumer’s hands. Otherwise, your customers may experience unsatisfactory delays as goods fail to be released at the EU-UK borders.

Know how to work around range restrictions imposed by Brexit and international border closures. The pressure is on for retailers securing and stocking normal product ranges, as was the case with Marks and Spencer in January temporarily cutting hundreds of items in its Northern Ireland stores due to Brexit red tape.

 

Provide an exceptional delivery and returns service

With so many consumers moving online to shop, retailers need to provide the experience they expect, such that has been established by dominant online retailers like Amazon. What this looks like in real terms, is investing in smart technology so that the online experience delights: optimising end-to-end logistics so that you can offer an exceptional delivery and returns service.

  • Including multiple delivery options to suit all needs (standard, next-day, last-minute)
  • Keeping rates in line with expectations
  • Offering real-time tracking for orders
  • A simple, electronic returns process (with multiple options)

It’s worth noting that our research shows that what most online retailers charge for delivery is hugely out of line with what consumers expect to be ‘reasonable’. They’re willing to pay extra for expedited services, but think just £0.77 is reasonable for 3-5 day standard delivery.

There’s also a desire to purchase items sent in eco-friendly product protection rather than eye-catching packaging designed to attract attention on the shelf.

 

Eco-friendly considerations

Ensure that your product arrives in a sturdy, premium, eco-friendly package. Our research showed that Gen Z and young millennials most value environmentally-friendly options, and it influences their purchase decisions: 58% of 25-34-year-olds look for green and carbon-neutral delivery options, and 62% say minimal and eco-friendly packaging influences their choice of retailer.

And according to Retail Minded, 52% of online customers say they would continue buying from the same company if they receive their orders in premium packaging.

 

Optimise logistics to avoid surcharges and potential delays

If 2020 has taught retailers one thing, it’s that waiting for the unexpected to hamper business-as-usual is detrimental to the bottom line. Brexit impacts, extreme weather events, Covid-19 lockdowns and border closures all hit businesses hard last year. In 2021, they have an opportunity to optimise logistics so that they are less exposed to delays and unforeseen costs.

Putting a multi-provider strategy in place can mitigate unexpected bumps in the road - such as those faced recently by DPD in light of Brexit. In January, the logistics company was bogged down by manual paperwork and incomplete data, which led to a pause in road service. A situation like this will have been detrimental to the retailers unable to switch to an alternative shipping provider rapidly.

Businesses are most vulnerable in the current situation if they have a limited number of carrier contracts. They can’t avoid the surcharges the carrier raises, and remain highly exposed to the risk of poor carrier performance caused by the stresses of the pandemic and Brexit combined with an unprecedented increase in online sales volumes.

 

Move to a ship-from-store model when localised lockdowns restrict footfall

Repurposing your physical storefront into virtual warehouses is a smart way to operate when consumers can’t walk through the door. Many brands, such as Selfridges in London, are seeing the benefits of this temporary switch.

Retail analyst Natalie Berg says: ‘The future of online is stores.’ In other words, retailers with existing stores can use them as a valuable asset in their online sales effort. In the situations where footfall in stores is dramatically reduced, retailers can use stores as part of the infrastructure to fulfil online sales and offset the costs of keeping stores by developing their contribution to the online component of total sales. According to research carried out by CACI, brands experience online sales 106% higher within the catchment of a bricks-and-mortar store.

There are additional benefits to this model. Holding stock closer to customers can;

  • Reduce delivery miles - improving your carbon footprint
  • Significant decrease in logistics costs

Our 2021 Retail Logistics Guide has tonnes more actionable information about delivering amazing customer experiences this year. It draws insights from new research commissioned by 7bridges, and offers helpful routes to a profitable 2021 and beyond.

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