CASE Insights: Exploring Marketing’s Evolution Through Technology
ARTICLE INSIGHT The Provision of Service Delivery Information Prior to Purchase: A Missed Opportunity FULL ARTICLE Page-Thomas, K. L. Moss, G., Chelly, D., and Yabin, S. (2006) The provision of service delivery information prior to purchase: A missed opportunity, International Journal of Retailing & Distribution Management, Vol. 34 (4/5), 258-277. ISSN: 0959-0552. Full-text: http://dx.doi.org/10.1108/09590550610660224
WHY WRITE THIS ARTICLE? Online retailing is a very important and growing area of the online economy. However, consumer reports of dissatisfied experience, rising number of baskets left empty or ‘drop-out rates’ and poor offline delivery and fulfilment begs the question what is it about online retailing that inhibits purchase and transactions. Given the plethora of studies reporting the importance and usefulness of an organisations website for access to information, we queried what role the provision of information about product delivery play in facilitating online transactions. Therefore we explored three core questions in this study: 1. What type of delivery information did consumers rank as important prior to purchase 2. What type of delivery information was actually available to consumer prior to purchase Note: This brief is adapted from the article so was current at the time of writing.
ACHILLES’ HEEL OF ONLINE RETAILING According to Forrester, (2004), more than 60 million Europeans shopped online in mid 2004, an increase of 50% since early 2003. The Internet Media Research Group (IMRG, 2005) reported that in the UK alone, consumers purchased £1.5 billion worth of goods on the internet in May 2005, 36% more than they did in 2004. Although these statistics present for a positive picture of B2C online retailing in Europe, industry analysts warn that dissatisfaction with delivery services, is costing the online retailing industry a significant loss of orders (IMRG, 2005). In essence, home delivery remains the Achilles' heel of online retailing. A very important stage in the exchange process, delivery and fulfilment has a direct effect on customer evaluations of service quality, service satisfaction and purchase intent. Despite this, consumers online often have to settle for a ‘take it or leave it’ approach to delivery services. Industry analysts have identified that online shoppers have many questions about the delivery costs, shipping, returns, and privacy of online purchases, but according to a review of five
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CASE Insights: Exploring Marketing’s Evolution Through Technology
major US retailing web sites, none of the retailers were able to answer all these questions online (Forrester, 2005). Another industry review of 100 prominent UK retailing sites revealed that: • 80% did not enable the customer to provide delivery instructions; • 46% offered no delivery time options; • 75% did not let customer choose a delivery date or offer Saturday delivery; • 26% made the customer register or log-in before delivery costs were shown; and • 54% did not make it clear if a signature would be required at point of delivery (Benassi, 1999; IMRG, 2005). A rtic le In s ig h ts •
Consumers have many questions about delivery of online transactions and purchase during the ‘browse’ stage of purchase, but don’t feel they are adequately answered or addressed by leading retailers through their websites.
All these accounts of vague delivery times, uncertain delivery costs and sketchy delivery information are deterring millions from shopping online and inhibiting future repeat purchase activity. Delivery services are a vital component of customer service as customer expectations relate to both the goods delivered and the delivery service received. Nowhere is this more evident than online. For customers on the web, expectations of reliable product delivery are key and delivery information available prior-to-purchase strengthens customer service confidence and perceived retailer trustworthiness (Burt & Sparkes., 2003). The provision of delivery information through retailing web sites is therefore one way by which online retailers can help to manage consumer delivery expectations and build trust before purchase even occurs. The types of delivery information recorded are listed in Table 1. Table I. Pre-purchase product delivery information Attribute Terms & Conditions
Description General terms and conditions about the sale and/or delivery of the products purchased Information about the company who will be Vendor delivering the products purchased to end customers Information about the different methods for Method delivery Pricing Information about how much delivery of the guide product will cost and how this cost is calculated Timing or Information about estimated or scheduled time schedule delivery ‘might’ occur Geography Information about where the retailer delivers to A written assurance that the products purchased will be delivered according to that Guarantee specified by the retailer and the responsibility assumed by the retailer if problems in delivery occur Source: Page et al, (2006)
Example 7-day return policy FedEx, Royal Mail, Retailer, Third party courier Retailer, courier, postal service, electronic delivery Pricing guide by weight, location, number of items Monday to Friday, Weekends, Between 9-5pm National or international What will happen if goods not delivered, or there is a delay in delivery or faulty goods arrive
A rtic le In s ig h ts
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•
The provision of delivery information through retailing websites is one way to a) manage customer expectations and b) build consumer trust prior to purchase.
WHAT DID WE DO? This study explored Western and Central European consumers and web retailers with respect to 1) how important they rank, and 2) how accessible is delivery information online prior to a consumers purchase. To investigate this, 715 Internet consumers from the UK, Hungary and Czech Republic were surveyed, and 159 retailing web sites from leading retailers in the UK, Hungary and the Czech Republic were content analysed.
WHAT DID WE FIND? The research identifies that consumers’ rate delivery pricing guides, delivery guarantees and delivery schedules as the most important delivery information they expect to see online prior to purchase. However examination of retailer web sites reveals that many retailers do not adequately provide information about how they ‘guarantee product delivery’. It is recommended here that online retailers should make more accessible to consumers online prior to purchase, detailed delivery information (e.g., pricing guides, timing schedules, etc) and should consider using delivery service guarantees to assure consumers of delivery service standards and retailer responsibilities. This paper makes a decisive contribution to e-shopping behaviour and online retailing by providing insight as to why e-shoppers visit retailing web sites but do not purchase. This is conducted by examining an often neglected area of the online buying process, ‘order delivery and fulfilment’ and the role access to delivery information can have in helping retailers to manage customer delivery service expectations and builder retailer trust. A rtic le In s ig h ts •
Retailing websites should make more accessible to consumers information about delivery guarantees, pricing guides, delivery schedules prior to purchase.
SOURCES • • • • •
Benassi, P. (1999), "TRUSTe: An online privacy seal program", Communication of the ACM, Vol. 42 No. 2, pp. 56-57. Burt, S., and Sparkes., L. (2003), "E-commerce and the retail process: A review", Journal of Retailing and Consumer Services, Vol. 10 No. 5, pp. 275-286. Forrester. (2004), 2004 European Online Retail Consumer. Amsterdam: Forrester. Available: http://www.forrester.com Forrester. (2005), Poor Contextual Help Erodes Shoppers' Trust: Forrester Research. Available: http://www.forrester.com IMRG. (2005, 23rd July). E-retail industry home delivery trust scheme phase 2 gets go ahead. Interactive Media in Research Group (IMRG). Available: http://www.imrg.org/IDIS%20PR%20220705.pdf [2005, 20th September].
NOTES A full-text copy of the article can be obtained from: http://dx.doi.org/10.1108/09590550610660224
ACKNOWLEDGEMENTS CASE Insights would like to acknowledge the support of the following groups and individuals in the development of this work: University of Glamorgan;
AUTHORSc Dr. Kelly Page | @drkellypage Created: 4 May 2009
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ABOUT CASE INSIGHTS http://www.caseinsights.com CASE Insights is a research initiative grounded on the use of case methodologies and a social-system worldview. The core aim of the initiative is to explore, document and share insights about Marketing’s evolution through technology. Grounded on the principle of generating and sharing knowledge, and the importance of relevance in research, CASE Insights are created using multiple methodologies and in collaboration with industry, academic and government partners. This work is licensed under a Creative Commons Attribution Non-commercial Share Alike 3.0 UK License.
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