10 TIPS TO IMPROVE THE

10 TIPS TO IMPROVE THE DELIVERY EXPERIENCE IN 2020

BY NATE SKIVER

As recently as just a couple of years ago, the term “delivery experience” was little more than an industry buzzword, often prefaced by “the Amazon effect” or “the e-commerce boom.” However, delivery experience has rapidly become a strategic focal point for many companies, and with good reason. Consumers expect a consistent, transparent, and frictionless delivery experience, and companies that fail to meet these expectations risk losing customer loyalty and, ultimately, revenue. A recent report published by Project44 titled “The Delivery Economy & The New Customer Experience” had this to say regarding the growing importance of the delivery experience:

“Consumers are no longer just buying a product, they’re buying an experience. Fast, inexpensive shipping that provides consumers precise visibility into the process is becoming more infl uential than core purchasing elements — like price, value, and customer service.”

With this in mind, below are 10 tips to help build a winning 2020 delivery experience strategy.

Re-assess your shipping strategy. Are the shipping options provided to your customers meeting their expectations? Are shipping options, including delivery time and cost, on par with your company’s competitive set? If the answer to either question is “No,” determine what changes are critical to improving the delivery experience and develop an implementation plan to address your customers’ needs. 1

28 PARCELindustry.com  JANUARY-FEBRUARY 2020 Providing a positive delivery experience begins well before a package is shipped, let alone delivered. Whether presented as static content on a Shipping/FAQ page or dynamically displayed on PDPs, shipping options should be simple, clean, and easy to understand. The last thing you want is to have a customer become confused, frustrated, and abandon before even reaching checkout. Whether you offer a fl at rate by shipping option or free with a threshold (or both), make sure the options are simply presented in a table or graphic that is easy to comprehend.

Clearly communicate an estimated delivery date (EDD). It is no longer suffi cient to provide the standard fi ve-to-seven-day delivery window and show an EDD of seven business days (gasp) in checkout for all customers. EDDs calculated specifi c to a customer’s delivery address are table stakes. Present the EDD in line with delivery options in checkout to ensure the customer has a clear understanding of when she can 3

Review Delivery Info + Items

Provide a post-purchase delivery experience solution. What kind of experience do you think a customer has if she sees “Label created, not yet in system” when clicking on the link in her ship confi rmation email? (Hint: It’s probably not a good one). Post-purchase delivery experience requires a solution to communicate with customers, instead of requiring them to track packages (which, as a parcel nerd, I don’t even like to do). Whether you partner with someone or develop something internally, it is imperative to provide your customers with a solution that informs them of tracking or status updates and facilitates customer interaction.

Leverage parcel data to enhance delivery predictability. While standard TMS functionality, such as using carrier-provided transit days, may be suffi cient to calculate an estimated delivery date, an opportunity exists to leverage parcel delivery data to better inform carrier routing decisions and provide a more consistent delivery experience. Consume parcel delivery data to measure a percentage of packages delivered by day, across carrier services, ship day of the week, and destination ZIP Code. Set acceptable delivery performance thresholds within a TMS and incorporate this logic into the package routing decision process.

Implement a delivery experience management solution. Failure to identify delivery issues before they affect the delivery experience is a good way to lose customers. Many options exist to identify delivery exceptions and communicate the issue to the customer, ranging from a manual process of using carrier tracking tools, CRM software and email, to parcel visibility solutions designed specifi cally to solve delivery experience issues. Engage a cross-functional team to assess your company’s current process and areas of opportunity and determine the solution that best addresses shortterm needs and enables fl exibility to adapt to the changing needs of your customers.

Evaluate shipping costs and budget accordingly for planned changes. Whether handled internally, partnering with a parcel audit and analytics provider, or a combination of both, perform a detailed cost analysis to ensure shipping strategy initiatives can

be supported according to established metrics (e.g. shipping cost per unit or shipping cost as a percentage of revenue). If shipping costs are too high, now is the time to re-negotiate your parcel agreements, as well as engage prospective carriers.

Explore alternatives to the “Big Two” carriers. Shippers must think outside the Brown and Purple boxes to fully assess carrier delivery options. Collectively, the USPS, postal consolidation carriers, regionals, and fi nal-mile delivery providers remain an underutilized asset in the e-commerce delivery space. While it may not be easy to break away from the revenue and volume commitments often required from UPS and FedEx, remaining “locked in” to one of these carriers simply limits your options. Engage with alternate carriers and, if needed, leverage third-party consultants to assist with evaluating options, assessing contracts and rates, and

Test, Test, Test. Adding capabilities to enhance the delivery experience doesn’t have to be an all-or-nothing proposition. Utilize a brand, customer segment, product, or order type to test different shipping and delivery options. Explore and test new carriers and/or services at a small scale to ensure they are properly vetted prior to fully implementing. Test, measure results, iterate, and repeat until the desired results are achieved.

Personalize the delivery experience. If you really want to provide an elevated delivery experience, personalization is critical. A one-size-fi ts-all approach is simply not enough in an environment where customers have more access to data, require precise visibility to their order, and demand the ability to infl uence the delivery. If free next-day delivery can be offered to a customer because she lives 50 miles from your distribution center, make it available to infl uence her purchasing decision. There is only so much value to be gained from the “surprise and delight” approach of providing a generic estimated delivery date, only to deliver three days “early.” Just delight your customer and incent her to buy.

Those who design, implement, and offer a compelling delivery experience will have an edge over the competition and be well-positioned for success in 2020.

Nate Skiver is the founder of Level Playing Field Spend Management, a parcel consulting company that provides value for its clients through creating parcel shipping programs that reduce expense, while delivering a positive customer experience. Prior to founding Level Playing Field, he spent more than 15 years focused on building, executing, and managing parcel transportation programs for leading global apparel companies. He can be reached at nate@lpfspendmanagement.com.

THE STATE OF “FAST AND FREE” DELIVERY: WHAT RETAILERS AND PARCEL CARRIERS SHOULD KNOW

Thanks primarily to Amazon (and the explosive growth of Amazon Prime), consumers in 2020 are conditioned to expect that virtually anything bought online can be shipped for free. That’s true for small orders like prescriptions and batteries, and for huge items like appliances and tires. If it means a shopper has to buy an annual subscription, or spend a little more to meet a free-shipping minimum, most people would consider that a low bar to meet.

But as every retailer and e-commerce seller knows, shipping is never free. Today’s multi-billion-dollar parcel carriers are getting paid. They moved nearly a billion parcels this past peak season. That shipping cost is being ultimately absorbed by sellers and is reflected in the price buyers are paying for products.

And parcel volume growth isn’t slowing down — it’s accelerating. According to the Pitney Bowes Parcel Shipping Index, global parcel shipping volume grew 70% from 2014 to 2017, to 74.4 billion parcels. The index projects global parcel volume to rise at a rate of 17% to 28% from 2018 to 2020, surpassing 100 billion parcels this year.

Handling increasing parcel volume isn’t just about figuring out how to do more of the same. The process of getting things where they need to go is under a transformation. In a recent report, Gartner found that transportation is the largest portion of delivery costs, due to a shift from carriers handling bulk freight to small parcels.

Gartner also observed what many companies are feeling: as volume continues to grow, companies only have time to react instead of plan. That means many are missing opportunities to revolutionize parcel logistics with innovation and alternative delivery models.

How Fast Does “Fast” Need to Be? According to research from Freightwaves, consumers unsurprisingly still have an appetite for fast delivery,

32 PARCELindustry.com  JANUARY-FEBRUARY 2020 with 60% of shoppers saying they’ve abandoned an online purchase because of slow delivery times. With record volumes to handle — and so much at stake with consumer expectations — efficiency, on-time consistency, and flexibility are key for parcel delivery services, whether it’s same-day, nextday, or deferred.

This year’s US peak shipping season saw about a billion package deliveries (up 4.5% from 2018). Retailers are offering more same-day options, which increases demand and the need for trucks, local delivery vehicles, drivers, warehouses, and warehouse workers. This year, the challenge was also complicated by a shorter selling season (the holiday season was six days shorter in 2019 than is typical), new restrictions on driver hours of service, and the December 16 implementation of new rules for Electronic Logging Devices in commercial trucks. All of these factors impact capacity and the ability of networks to deliver fast and on time.

Emerging Shift in Consumer Behaviors On the fl ip side of the “freer and faster” coin is Gartner research analyst Tom Enright. He’s counseled retailers on their supply chain and fulfi llment strategies for more than a decade.

In a groundbreaking report published in November 2019, he detected an emerging shift in consumer behavior: “Consumers are starting to express increased concern about the environmental impact of retailer’s shipping practices, and are seeking slower, more sustainable options.” Consumers are now defi ning convenience as order fulfi llment on their terms, and they’re expressing more and more concerns about the environmental impact of fast, one-off deliveries.

It’s a confl ict between three consumer choices:  The desire for instant gratifi cation  The price reduction they can get for waiting longer for a delivery  The impact fulfi llment speed has on transportation, packaging, and other environmental issues.

According to Enright, for retailers, these shifting demands are driving the emergence of two new requirements that are somewhat at odds with current models:  Retailers must be more environmentally sustainable in order fulfi llment operations.  Retailers must offer a wide range of

shipping speeds and prices, especially if incentives or other benefi ts are included the offering.

Considerations for Retailers and Parcel Carriers That means retailers — and their parcel delivery partners — need to consider more fl exible fulfi llment options. These will need to be able to satisfy a consumer who wants a totally different delivery than currently exists. Companies will need to consolidate multiple online purchases from different retailers, have them combined using less packaging, and have it delivered as one shipment a week from Tuesday. That’s instead of three separate shipments expedited for delivery

tomorrow — or even same-day.

Major retailers like Amazon, Walmart, Target, and The Home Depot are doubling down on offering same-day delivery options. And for parcel delivery providers, it remains a highly fl uid and exciting market. New network models are not only welcome, but will be required to meet the ever-evolving demands of shippers. The explosive growth of package volumes, as well as consumers’ desire for next-day and, increasingly, same-day delivery, aren’t likely to wane anytime soon. And retailers and parcel carriers will need to pursue creative, innovative ways to keep up with those expectations and meet that demand.

Valerie Metzker is the Head of Business Development at Roadie, a crowdsourced delivery service that works with consumers, small businesses, and national companies across virtually every industry to provide a faster, cheaper, more scalable solution for scheduled, same-day, and urgent delivery.