Cost-effective delivery: Australia’s 2021 ecommerce super power

The pandemic has turned the retail industry on its head and the sector continues to feel the pinch, with Australian high streets looking increasingly depleted – especially as restrictions continue to limit physical retail across the country.

As shoppers become increasingly cost sensitive, retailers are having to innovate and find new ways to ensure they retain existing customers, while attracting new ones.

Australians are looking online more than ever for their shopping needs, and so it’s crucial that retailers look beyond cost cutting and implement changes that will also offer a more convenient customer experience.

There is a massive opportunity for retailers to benefit from diversified fulfilment options beyond basic home delivery – and it comes at the right time, as shoppers have switched on to it and demand is on the rise. For retailers and franchises looking to get a foothold into this new way of thinking, here are a few things to consider.

Unfulfilled demand

Online sales climbed 44 percent year-on-year in January according to recent data from Australia Post. This boom has shown that consumers are now open to new ways of shopping.

Indeed, our research has found that 61 percent of shoppers are eager to try new delivery options, yet only 30 percent have been able to do so in the past year. The business benefits for retailers that meet this demand are numerous.

It’s a rare chance to position the business as innovative and future-focused, as well as being seen to put customer wants and needs first. Not only does this create a better customer experience, diversified fulfilment options help to reduce a business’s overall delivery costs. 

Over half of consumers (59 per cent) who have used Click & Collect in the past 12 months have done so because they can collect their delivery while doing other things.

For these shoppers collections are “trip-chained” alongside regular trips to the Post Office (66 per cent), supermarket (44 per cent) and shopping centre (32 per cent). This is a huge opportunity for retailers to embed their business into the habits and rituals of their customers, driving up footfall to physical stores that are suffering the most at present.

Most Australian shoppers (43 per cent) would be more inclined to use a pick-up point if they could collect it faster than it could be delivered to home, and with in-store demand remaining strong for groceries, furniture, hardware, and alcohol, those heading to a Pick-up / Drop-off (PUDO) point may also make additional purchases due to the convenient location.

Leveraging returns

Returns are the single biggest pain-point of a consumer’s online experience, yet they are inevitable in many instances and ultimately, business-critical. Treating returns like a loss is a huge mistake. Instead, retailers should embrace the process as powerful engagement opportunities. 

Consumers are taking returns more seriously than ever – especially those shopping online. Our research has found that 72 percent of consumers check a retailer’s returns policy before even committing to a purchase, and 41 percent avoid brands entirely after a negative returns experience.

Retailers that ensure shoppers have smooth returns experiences can expect higher average purchases and increased shopping frequency; as customers have the confidence that their purchasing decisions are valued, leading to improved brand reputation and loyalty.

Digitising returns processes provides a business with a wealth of insights that can inform strategic approaches. Knowing in real-time what products are proving unpopular or defective can enable faster responses and more efficient long-term stock management.

Improved customer insights also better arm a business’ marketers, enabling initiatives like personalised promotions.  

Returns also offer the opportunity for short-term upsell and cross-sell opportunities. Our research showed that when shoppers returned an online purchase in store, 15 percent made an additional purchase, with one in five of those purchases topping over $100.

Environmental benefits

While not all Australian shoppers prioritise environmentally friendly delivery options, it is increasingly on the minds of many young consumers. In fact, our research shows that 31 percent of consumers aged 18-29 believe online shopping has a negative impact on the environment.

With sustainability becoming a bigger driver of consumer behaviour, forward-thinking retailers are embracing ways to reduce their carbon footprint.  

The PUDO model offers both economic and environmental benefits. Delivering parcels en masse to a PUDO location has a much lower carbon impact than individual home deliveries, with one study suggesting that this method reduces emissions by around two thirds compared to door-to-door deliveries.

As consumers become increasingly aware of their sustainability footprint, it’s only a matter of time until shopper consciousness peaks and retailers will need to answer these demands. 

Across the board, retailers did an impressive job of pivoting to meet customer demands as the world shifted online amidst the pandemic.

Now, retailers are entering a new shopping age, where cash-conscious Australians balance hybrid working and living schedules, requiring more flexibility and convenience than ever.

In this new context, expanding and enhancing delivery and returns methods is an incredible vehicle for better cost control, greater customer choice, improved sustainability benefits, and enhanced brand reputation – all business lifelines that can lead to that ever-illusive commodity, customer loyalty.

Author: Justin Dery, APAC CEO Doddle