Magazine Article | March 1, 2002

Make A Last Impression

Source: Innovative Retail Technologies

Merchandise fulfillment doesn't end once it leaves your warehouse. Take responsibility for shipments throughout the package delivery process and your customers will thank you.

Integrated Solutions For Retailers, March 2002

No matter how impressive your start, you must have a strong finish to stay in the race. In the case of e-tailing, nothing illustrates this more than strategic package delivery. Every retailer must outsource this key business function, but too many assume their work is done once they turn packages over to their carriers. In the process, the retailer makes a potentially deadly customer service mistake and misses a competitive opportunity.

Like it or not, package handling is an imperfect business. Statistics show that package carriers deliver approximately 5% of residential packages later than promised. In addition, nearly 1% of packages end up missing in action. So if your company is typical, nearly 6% of your e-tail customers will have an unsatisfactory buying experience due to poor carrier performance.

Perhaps these service lapses would be acceptable if your customers blamed your carrier. But the reality is, most will blame you. Consumers don't say, "I ordered something for my mom's birthday from, and the company's package carrier delivered it late." They say, "I missed my mom's birthday because didn't get my order to me on time." Worse yet, you risk alienating or losing a customer. And considering that it costs approximately $40 to acquire a customer, that's a big price to pay.

It's All In The Handling
Take a more proactive approach to parcel management. While you may not be able to reduce your carrier's late deliveries, you can improve the way you communicate with your customers. Consider these two scenarios. In Scenario A, you ship a customer's order via a carrier, promising a delivery window of three to five days. One week later, your customer calls to inquire about the missing package. You must then work with the carrier to track the package, explain to the customer what happened, when it will be delivered, etc. Throughout this reactive process, you've inadvertently sent a number of messages to that customer: "Your package isn't really our concern." "The left hand doesn't really know what the right hand is doing." "Customer service means having to say we're sorry." In Scenario B, you ship the package via your carrier; however you monitor the progress of the package throughout your carrier's delivery stream. One day before the package is due to be delivered, you see that the package still hasn't reached the carrier's local terminal - a sure sign it's going to be late. You immediately notify your customer via phone or e-mail that the package has been delayed so that the customer knows it won't be delivered when promised. You take steps to correct the situation for the customer - perhaps sending out another package the same day without a charge for shipping. Throughout this proactive process, you're also sending indirect messages to your customer, including: "We're in control." "We're quality conscious." "We go above and beyond." In addition, you're building a reputation as a company that stands behind its products before, during, and after the sale. It's not difficult to discern which approach yields more loyal customers.

Timing Is Everything
There are some who say Scenario B is superfluous. After all, many package carriers have spent millions of dollars implementing their own package tracking systems, which consumers can tap to do their own package tracking. Additionally, there are those who would argue that a late package delivery is still late, even if you do give the customer a heads-up. What these critics forget is that requiring Web shoppers to spend extra time doing their own package tracking removes one key advantage of Internet buying. And letting them find out about a late shipment after the fact deprives them of the opportunity to make alternate arrangements if necessary. Also, there is a difference between a commodity and a brand. If you believe that your Web site exists merely to sell products, then perhaps your work truly is done when the product leaves your fulfillment center. If, however, the objective of your Web site is to create a happy customer, then you cannot relinquish your responsibility for any part of the selling process - not if you want to stand out from the competition.