Delivery will soon trump payments as a brand differentiator for e-retailers

Register now

Until very recently, the payments process on an e-commerce platform was seen as the holy grail of customer interaction. Payment had and has to be as seamless and pain-free as possible, to stop people running into problems and taking their business elsewhere, just when all the hard work of convincing them to buy a product had been done.

It’s true online sellers need to make sure they’re offering a wide range of payment options that cater to the needs of their customers. It’s one of the reasons behind the huge valuations that payment processors attract. But it’s also a reason why, once the payment hurdle has been overcome, brands have rather lost their focus on the next, yet ultimately most important, stage of the process. That is to say, delivery.

Delivery has often languished (especially in the U.K.) as the overlooked cousin of payments. With money in the bank, who cares how a package actually gets from A to B? Customer experience has often been reduced to hoping to get a “good” carrier instead of a “bad” one, firing “Where Is My Order” (WISMO) emails to unresponsive retailers, and not knowing where our deliveries are until we get a note through the letterbox saying “sorry we missed you.”

Retailers wouldn’t send a customer to an untrustworthy third-party platform for payment after offering a seamless, fully on-brand experience on their website (from product discovery, selecting an item, putting it in the basket and hitting “checkout”).

These retailers must ensure the same doesn’t happen for the post-purchase experience. The retailer has invested so much in a customer journey, that handing off delivery to a third-party partner who can’t tell the customer when the product will arrive is a cardinal sin. Expectations need to be set, and managed, so delivery promises can be kept.

As demands brought by COVID-19 have shown, retailers and carriers must offer a seamless experience as standard. This includes solving the common issues that typically link the retailer and carrier, with this relationship often being littered with friction. This includes disconnected language, confusing updates, long investigation times for retailers as they navigate multiple carrier portals, or worse, the relationship being disconnected to such a point where customer calls are routed directly to carriers themselves.

The courier market has exhibited relatively strong growth over the last several years as online shopping has increased, but COVID-19 has accelerated the trend. In fact, COVID-19 has changed the game entirely and as we shift toward the “new normal,” many of these changes are predicted to stay put. It could be said that these figures represent how the importance of a delivery service is soon to trump the expectations customers hold on the payments process.

Total U.K. retail sales before COVID struck were worth £454bn, with online sales accounting for 18% in 2019. Now, online penetration levels that may have taken years to reach have already been achieved during the pandemic.

In short, e-commerce and carriers are now all running at peak period Black Friday levels. We saw a 1,715% increase in shipment volumes during the last quarter compared to 2019, and longer term, e-commerce penetration is expected to continue to rise and drive additional demand for courier and express delivery services.

With future delivery expectations changing and demands skyrocketing, customers must also be prepared for a period of transition as the courier market accelerates to meet demand. For example, customers may see carriers reacting to Amazon becoming a global carrier of non-Amazon products and adapting their offering to compete. One thing is for certain, delivery services are adapting at an unprecedented rate to soon take the lead as the key customer service moment.

COVID-19’s consequences have been far-reaching across the retail space, and these effects are set to continue as we shift out of lockdown. With consumers now changing their behavior and ordering all or most of their goods from home, the importance of reliable, traceable delivery has been thrown into sharp relief. When a delivery can be the only contact we as consumers have on a certain day with another human, a little empathy can go a long way. Even more so, online shopping can only offer delivery as the only physical touchpoint that a customer has with a brand. And when we’re planning our lives around a strict new routine, deliveries no longer have the luxury of arriving unpredictably.

The courier market has historically competed on price, but with consumers demanding more from delivery, retailers are being forced to adapt their delivery proposition to address expectations. Retailers must carry out a constant re-evaluation of supplier relationships to ensure agility, reliability and best-practice levels of customer service that withstand the test of time as we enter our post-COVID new normal. Having a bank of different carriers to reduce risk and cover all services is key.

From a customer perspective, we have more choices than ever to make. Even (and perhaps especially) in lockdown and beyond, customers can vote with their virtual feet. Sellers need to start implementing the right technologies now, in order to support the retail landscape of tomorrow. Underpinning this will be understanding that delivery now deserves the same respect as every other element of the customer’s journey.

For reprint and licensing requests for this article, click here.
E-Commerce Digital payments Payment processing Merchant