Commentary | Viewpoint

What Customers Expect in the E-Commerce Age

Tags: Retail, E-commerce

Twenty years ago, selling and delivering retail goods to consumers was a relatively simple process. Nearly all purchases were made in stores, so if a retailer adequately stocked its shelves with desirable, dependable goods, shoppers were usually satisfied. If they weren’t, they often had limited options, depending on how far they had to travel to reach competitors’ outlets.

E-commerce changed all that. Although most transactions still occur in stores, online sales are steadily rising as a percentage of total retail sales. Before they shop in stores, many customers compare prices and other features online. They’re not bound by geography, either; consumers can now shop at distant retailers as easily as they shop down the street.

This increased competition has upended the retail relationship. In many respects, consumers now have the upper hand; if they don’t like what one retail site offers, they can visit another one within seconds. Just as importantly, they also have multiple ways to voice their discontent instantly — not only to the retailer but to innumerable potential shoppers.

Customer complaints are inevitable for every retailer, of course. Amazon, for instance, has consistently placed at or near the top of customer satisfaction rankings. It did so again in 2014, yet its score dropped five points from previous highs, mostly because shoppers began finding lower prices at the websites of Amazon’s competitors.

Today’s consumers may be a tough crowd to please, but their willingness to nitpick presents retailers a grand opportunity. The constant feedback — combined with extensive collection and analysis of every last databyte of customers’ online behavior — offers merchants an ongoing guide to improvements. As e-commerce evolves, retailers that want to succeed will need all of this information to continually optimize their sales and marketing channels, enhance the shopping experience, and thereby meet and exceed customers’ expectations.

Fast and Free

One clear expectation has already emerged: Many shoppers practically demand free delivery of their online purchases. Free shipping remains the most powerful marketing promotion ever devised, and retailers have therefore applied it, in different ways, to their online sales and marketing efforts.

However, retailers are also offering faster deliveries to attract customers — and to better compete with Amazon Prime, which has built a considerable audience by promising unlimited 2-day shipping for an annual fee. Because quicker deliveries increase shipping costs, retailers are trying various ways to get orders to customers swiftly, including:

  • Shipping items from nearby stores
  • Offering in-store and curbside pick-up of online orders
  • Using personal shoppers to fulfill and deliver orders

 

Personal shoppers are employed primarily by same-day grocery providers, such as Amazon Prime Fresh, Google Express, and Instacart, which charge delivery fees for each order (plus membership fees, in some cases). Given the costs and times involved, though, those programs are necessarily limited to dense urban areas. Even pick-up services have a limited viability.

Nevertheless, the competition between free and fast shipping is playing out across the retail space. Amazon Prime offers both, but admits that its subscription fee doesn’t cover its members’ two-day shipping costs. Combining fast and free clearly isn’t easy, but finding a quick, low-cost delivery method would give a retailer a critical advantage on Amazon and others.

As e-commerce grows, so will the desire to deliver (and receive) orders quickly and cheaply. Ultimately, though, a retailer will be measured by its ability to meet its customers’ expectations. Consumers have consistently proven that they’re willing to wait a few days for their orders if shipping is free. They’ve also shown that they’re willing to pay for expedited deliveries. More than anything, though, they need to trust a retailer if they’re to continue shopping with it. By listening — and responding — to their stated needs and proven behaviors, retailers can satisfy their wishes and keep them coming back, just like the old days.