Many retailers and their customers are in complete disagreement about what constitutes an ideal customer experience. What happens most often is that the retailer thinks they have created a loyal customer as soon as the transaction is complete, while customers have an emotional connection to the product journey right through to delivery.
However, despite the best, although some would say despite the worst, efforts of all the interested parties (retailers, couriers, transport aggregators and tech companies) to improve the last mile experience for consumers who shop on line, there are still a lot of holes down which retailers and brands are losing customers. Put simply, this is because the retailer has a very limited view of what the customer is doing past the buy button, so assumes all is well.
Point solutions don’t impress customers
The tech industry has responded over many years to fill some of those holes. Tracking, personalised delivery options, save the sale promotions, a simple returns process and so on, but these have generally been developed and then introduced as point solutions, so while the retailer relaxes because they have added a tracking app, they have no control over some of the nastier things that can happen in the last mile.
You’ve heard some of them before – deliveries that are chucked onto the customer’s roof; or dropped off next door despite no agreement from the customer to do that; or left in a secure location that turns out to be in full view of passers by. These get noticed by the media because they make great headlines, but what about all the other things that go wrong which are less visible but equally irritating to the customer.
Customers come first
The fact is, despite some of these innovations, the retailers and brands are still giving up control of the customer experience that they have gone to such pain and expense to design, at the many moment in the journey where things can and do go wrong, in that last mile. This is definitely not putting the customer at the heart of the business, as many retailers like to claim.
Clearly, the answer is to adopt technology that puts the customer experience first and then provides all the components to manage that as part of a single, integrated solution – delivery management, tracking, returns and marketing – all visible through a single dashboard and all underpinned by data that is controlled and owned by the retailer, NOT a third party courier aggregator, or tracking app.
Customer reacquisition costs big and can be avoided
I’ve talked to retailers who don’t quite get it; they say that they are comfortable with various third parties managing these individual elements but you’d never get that kind of response from the actual customer who wants an experience with no tears, no hurdles and no potholes. For instance, some third party returns apps have such a complex returns process and put almost the entire burden of compliance onto the customer. Perhaps this is what some lower quality retailers intend, hoping the customer will give up and not return the item, but any retailer that cares anything about life time value does not.
It is very common for the customer to not complain so the retailer has no idea that something went wrong or that the customer will probably not be coming back. They are not necessarily unhappy but they are not happy either; few truly loyal customers live in this no mans land. And so the retailer ends up having to reacquire the customer, at vast expense.
Narvar helps retailers manage the entire customer journey post sale
Anthony Gavin, VP Sales EMEA for Narvar, an intelligent customer experience platform, refers to these various bumps in the road as missed moments. “The post purchase experience has a massive influence on customer loyalty, so the focus needs to move from transaction acquisition to customer acquisition. By failing to address this, the retailer not only risks losing a customer but often ends up rebuying new ones, which carries significant cost, on average $33 per customer. We urge retailers to take ownership of the post purchase journey, and give customers additional delivery flexibility; that’s the route to loyalty, cheaper to deliver than reacquisition and much more valuable in the longer term.”
Now, if we were to add up the cost of acquisition, reacquisition and returns, it is clear that a more effective response is required. Not that anyone has yet calculated the true cost of returns; any doubts that this area needs addressing need only look at the figures – returns rate in the UK averaged across all categories is 30%, and can be as high as 70% in some sectors. In Germany, the average returns rate is 50% while some of the marketplaces are looking at 60% +.
Solving the challenge of building perfect post-purchase customer experiences to protect margin and grow LTV is Narvar’s enduring obsession, and has led to some impressive returns for its customers. It worked with online fashion brand, PrettyLittleThing, and after only five months :
- Time to next purchase was accelerated by 57%, increasing revenue, loyalty and customer lifetime value.
- Customer ratings of the post-purchase delivery experience increased 30%.
- Emails featuring personalized marketing assets drove customers back to PrettyLittleThing’s branded tracking pages, achieving 44.3% click-through rate.
- Branded tracking pages delivered 24x return on investment in five months.