5 Red Flags for Retailers Racing Amazon

Consumer expectations are fueling retailers’ response to service demands. Organizations working to improve e-commerce performance face hurdles that impede the path to profit.  

In an era where delivery choice and speed are becoming fundamental expectations for everyone, companies across most industries are rethinking how they receive, fulfill, and ship customer orders. Facing stiff competition from web-based suppliers, e-commerce providers, and even traditional companies, retailers, distributors, and manufacturers alike are challenged to enhance customer experience by offering variety in delivery options - without impacting the cost to the consumer.

Getting there isn’t easy.

Risks consistently stand in the way of retailers that want and need to deliver the best possible e-commerce experiences for their customers.

Driving Digital Growth and Retail Response

In its 2019 Retail Industry Outlook: Navigating disruption in retail report, Deloitte paints a picture of an industry where the consumer is unquestionably in the driver’s seat. “Consumers realize they can have it all. Today’s digital consumers are increasingly connected, have more access to information, and expect businesses to react to all their needs and wants instantly.”

Operating in an industry that’s in a state of constant disruption, retailers are managing through uncertain times and placing bets on what will separate the winners from the losers. “Those that can synchronize their investments to profitably empower the consumer will likely find themselves on the right side of the tipping point,” Deloitte concludes.

The good news is that the retail industry continues to thrive, with U.S. retail sales expected to rise between 3.8% and 4.4% to more than $3.8 trillion in 2019, according to the National Retail Federation (NRF), which credits high consumer confidence, low unemployment, and rising wages for driving these numbers up. The 2019 holiday season should be particularly bright, with Coresight anticipating a 3.5%-4.0% year-over-year increase in U.S. retail sales during November and December.

These positive outlooks present a viable opportunity for retailers that learn how to harness e-commerce and use it to their advantage. For many retailers, getting a piece of that pie will require a good, hard look at the red flags that are slowing down their e-commerce service and putting them out of the running for today’s “want it now” consumer. 

Red Flags that Slow the E-Commerce Profit Race5 flags cart

Here are five risks that consistently stand in the way of retailers that want and need to deliver the best possible e-commerce experiences for their customers: 

Risk #1:  Web-based order interfaces. Success in e-commerce starts with a user-friendly interface that doesn’t frustrate customers or send them off to buy from another site. Put simply, if your online store’s ordering system is cumbersome and difficult to use, no one is going to use it unless they have to.  

Risk #2:  Shopping cart conversions. The retailer that isn’t boosting online checkout rates will quickly find itself struggling to survive in a sea of companies that have figured out the formula. Ignore the need to drive down abandonment rates and all of the advertising, marketing, and sales efforts in the world won’t help you compete against the likes of Amazon and other large e-tailers.   

Risk #3: Same-day order fulfillment. Retailers that want to convert digital consumers know that competing on price and customer experience just isn’t enough anymore; they have to also be able to compete on speed. Handled improperly, same-day delivery can be a logistical nightmare and major risk for retailers. It’s also a necessary evil for them, and something that they all have to be able to do for at least some of their customers.     

Risk #4:  Parcel, heavy home, and customized delivery platforms. When it comes to bulky goods that require extra muscle and/or assembly, retailers need to factor in three different scenarios: leaving the box in the entryway of a home or apartment; putting it in the room of choice; or doing both of these plus opening up the box, removing the packaging, and setting up the product(s). With delivery on demand becoming increasingly prevalent, giving the customer scheduling control and providing reliable service further enhances customer experience.

Risk #5:  Selecting the best, most economical transportation mode. Often retailers don’t have access to the data that allows them to utilize more economical mode selection. Instead, many focus solely on getting same-day and next-day shipments out the door as quickly as possible without worrying about whether or not those are the best and most economical decisions. This is a huge risk in an era where companies are being forced to go head-to-head with Amazon and Walmart, both of which offer same-day and one-day delivery to 72%-75% of the total U.S. population, respectively.   

The retailer that understands the transportation risks that exist in the race against Amazon are positioned to proactively mitigate them in today’s disruptive selling environment. These organizations will be best positioned to not only maintain market share, but to also prepare itself for what’s coming around the next corner. 

5 flag downloadReady to learn more about the risks facing retailers on the e-commerce front and how to solve them? Download Transportation Insight’s e-commerce guide, Managing the Risk of Racing Amazon. 

 

 

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