E-commerce shipping: It can make or break your brand
Providing e-commerce shipping options to consumers is key to avoiding cart abandonment. Get shipping right by listening to your customers.
Retail is an ever-changing industry, especially with the fast-paced online side of things factored in. From improving logistics to always putting the customer first, we’ve got retail tips from six movers and shakers in the industry.
Logistics: Free shipping has a price
“When you’re getting the product faster, an hour, two hours, that’s expensive. You’re adding costs to the system. What we’re trying to do is educate and train people how to pull cost out of the system. So building bigger baskets, smarter baskets to save money.”- Marc Lore, Co-Founder and CEO of Jet (via CNBC)
Jet launched in July of this year and has already earned a seat among the top marketplaces, with a number four spot according to GMV data from ChannelAdvisor. Jet aims to beat other retailers by competing on price and lets shipping time take a back seat.
Shipping is a tough part of online retail because neither customers nor retailers want to pay for it. Jupiter Media Matrix Inc. conducted a study and found that 45% of retailers profit from shipping fees, 45% lose money from it, and 10% of retailers are right at cost. But what about retailers that provide free shipping? That’s where Lore’s advice really comes into play.
Providing free shipping thresholds that are above a retailer’s average order value and rewarding shoppers (by lowering prices in Jet’s case) when they make purchases that are more efficient to ship are ways to make sure that both retailers and consumers can benefit, and all retailers should take fulfillment into consideration when planning their strategies.
Competition: It’s a jungle out there
“We almost need to say ‘thank you’ to Amazon. They have taught the American consumer to shop online, but they don’t own that relationship.” – Target CEO Brian Cornell (via Re/code)
We all know that Amazon is the king of online retail, but even as their loyal Prime member base grows, it’s important to remember that they aren’t the only game in town. Even though Amazon is known as “the everything store,” there is still plenty of room for other retailers to find their niche. Target certainly isn’t a small fish, but they still owe a lot to Amazon’s influence on consumer behavior.
Even though competing on and with Amazon can be quite tricky, it’s a worthwhile feat. There are many ways to improve your positioning on Amazon or even on your webstore.
Offering stellar customer service and a balanced inventory (between a best selling assortment and unique products) are good places to start in order to take advantage of the ever-expanding pool of online shoppers.
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Focusing on the product and experience
“In the old world, you devoted 30% of your time to building a great service and 70% of your time to shouting about it. In the new world, that inverts.” – Jeff Bezos, CEO and Founder of Amazon.com (via Forbes)
The products that retailers offer make or break their success. Both Amazon and Shopify know this and their CEOs take stances on it that work well together. Jeff Bezos talks about balancing new products and marketing.
Bezos believes that spending the majority of time on developing new products and less on marketing them. After all, the best products sell themselves through word of mouth.
A great way for retailers to get ahead: spend less time marketing and more time focusing on the development of new products and exclusive, seamless customer experiences.
Seamless customer experience: CX can make or break a brand
A seamless customer experience is a priority for brands today, with 84% of companies that improve their CX seeing increased revenue.
The omnichannel future
“We recognized that for our future, and for the way the customer was now shopping, we had to have one point of view… We are now focused on the brand, not the channel.” -Karen Katz, President and CEO of Neiman Marcus (via Fortune)
I’ve said it before and I’ll say it again: omnichannel is the future of retail. If anything, now it’s a requirement. Shoppers have warmed up to shopping from their desktops, smartphones, tablets, smartwatches, and Dash buttons. Retailers have a new set of requirements to meet demand from all of those channels. Neiman Marcus understands this and has incorporated it into its revamped strategy.
The core of omnichannel success is offering a seamless and consistent experience and that is exactly what Neiman Marcus is working to do. The first step was integrating their online and in-store assortment. This made it possible to offer a more uniform brand experience that helps get products into shoppers’ hands. While Neiman Marcus is trying to align their channels, the CEO of Macy’s discusses the future he sees for pure play retailers and offers Warby Parker as an example.
He proposed that within five years all major pure play retailers would also have physical stores because experiencing products often helps shoppers buy more and make fewer returns:
“They got a feel for what it’s like when the consumer comes in and interacts with them, and they said, ‘This is what my customer wants… I think it’s going to go the opposite of what many people have predicted.” -Terry Lundgren, CEO and Chairman of Macy’s (via CNBC)
While Neiman Marcus was initially just a brick and mortar retailer, they are realizing the importance of other channels and the experience shoppers are having on them. The takeaway here is that retailers should pursue any channels that make sense and work to have a consistent brand experience across all of them.
Online retail’s fast growth will more than likely continue to outpace brick and mortar for the foreseeable future.
The online space is fast-changing by nature, and it provides the opportunity to easily test strategies and implement successful ones immediately. These retail leaders appear to have a true grasp of the continuous innovation that is a necessity for survival and success in online retail. The ideas they convey are strong enough to shake up the retail industry, and the best way to remain on your feet is to stay ahead of the curve.
