Putting customer convenience at the heart of everything
With the increasing dominance of online shopping and Amazon knocking at our door, it might seem like the lowest price is the only question in a customer's mind. In some cases this may be true, but good data is key to understanding customer behaviour.
Retailers in the 21st century have access to more data than at any other point in history. Loyalty programmes and point of sale systems can capture huge amounts of information and payment cards are an important source of data. Even small retailers can work with companies like Marketview to get tailored analysis of their local markets and their customers. In the online world, etailers have the advantage of knowing exactly who their customers are, and what they're looking to buy on e-commerce websites.
Wherever the information comes from, retailers can use this information to tailor their offerings and marketing campaigns to win customers and create great customer experiences.
Outside the grocery sector, 11 per cent of all purchases made by New Zealanders are now made online. In a digital world, data tells us that delivery is a key part of providing an outstanding customer experience.
Most shoppers want fast and predictable delivery times, reasonably priced and reliable freight services and the ability to return items easily if necessary. While price is important, it is only part of the story, and almost daily we are hearing about new innovations that attempt to smooth over these bumps and make the entire retail experience as painless as possible.
The retailer's role is changing in response to customer's desire for a seamless transaction. In fact the very essence of what a retailer is and does is being challenged. Today we are seeing manufacturers and wholesalers selling direct to customers, and providing excellent retail experiences through both online and in-store channels. We are seeing innovation at all points in the supply chain to make the customer experience as convenient and seamless as possible.
Subscription delivery services smooths the annoyance of spending relatively large amounts on freight for small items. Customers can buy whatever they need and have it delivered when they need it, without the worry of additional delivery costs. From the retailer's perspective, the key advantage is that it incentivises the customer to return regularly for a period of time.
Of course, Amazon is driving much of this innovation in this space, and its AmazonPrime subscription service provides a benchmark for other players. It offers unlimited free one-day delivery and streaming of its Kindle and audio-visual content for a fixed monthly or yearly fee. It currently has 80 million subscribers and is likely to become available to Australian (and possibly New Zealand) customers when its local distribution centres open. Currently it's available to US customers for US$99 a year which is pretty reasonable if you shop with Amazon regularly.
Here in New Zealand, NZ Post is trialling a subscription delivery service called Shipmate. At NZ$12 for two months (excluding large items like whiteware), it entitles subscribers to an unlimited number of deliveries from participating retailers. The four Warehouse Group brands are the first to join. Countdown also recently offered a subscription service offering three month’s free delivery of purchases over $80 for $69.
Improved services and increased flexibility
Innovations are also concentrating around making the process of getting products to customers as convenient, flexible, and fast as possible.
In the US, Walmart has recently announced that it is trialling a grocery delivery service that delivers products directly to the customer's fridge or pantry, even if they aren't home. It is enabled by smart home technology and the delivery can be watched remotely via home security cameras. It is also trialling a service in which its staff can opt in to deliver parcels on their way to or from work via an app - reducing delivery times and no longer relying on third party courier services. These innovations allow the retailer to control the entire customer experience - from browsing online to putting the items into a shopper's hand, or fridge!
Third party providers are also innovating in the delivery space. Global disrupter Uber has developed an UberRUSH product for business owners that want fast deliveries. Like the Uber taxi service, users can track deliveries on a map enabling easy and predictable pickups and drop offs. This type of service immediately lends itself to takeaway or restaurant food deliveries and right now multiple start-ups are offering this service in New Zealand's urban centres. They complement businesses like NZ Couriers which has recently opened a new major logistics site in Christchurch.
This type of service offers a sensible options for local businesses that don't have the scale to develop their own delivery solutions. It allows smaller retailers and their customers the convenience the retail giants are building themselves.
A personalised experience
Online etailing is a rapidly evolving space, and retailers are experimenting, based on data provided in customer feedback to see how they can personalise delivery services and make their customers feel loved. Making transactions fast and easy, keeping customers informed about delivery times and, critically, delivering on your promises is now a given. Failing on these will diminish customer trust, but it's not all for the big guys.
What can smaller retailers do themselves to smooth the delivery and returns process and make customers feel they are at the heart of each transaction? Despite the vast difference in scale, local online retailers can do a lot to make their customers feel special. I'm aware of etailers who, for example, include a small chocolate bar, a free packet of seeds, or a handwritten note with customer parcels. Small gestures such as these can be very much appreciated by customers, stick in the mind, and can certainly encouraged repeat shoppers.
Thoughtful packaging is another way to achieve a similar effect, and packaging suppliers are also thinking of innovative ways to make unwrapping an online order a personal and enjoyable experience. For example, Sealed Air are innovating with branded heart shaped bubble wrap! Its sounds simple, but it makes you smile and could make your customers more likely to shop with you again.
by Scott Fisher, Retail NZ CEO
Originally published in the December 2017/January 2017 edition of the NZ Retail magazine.