March 27th, 2017
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How Distribution Affects the Customer Experience
Here are some eye-opening figures about the scope of online shopping:
- 69% of Americans shop online monthly
- 33% of Americans shop online weekly
Now that online commerce has become the preferred way for many people to buy much of their stuff and for most people to buy some of their stuff, the distribution process has taken on a new urgency.
Creating an easy and simple online marketplace is the simple part. But fulfilling orders nationally and internationally while accounting for sudden dips and surges in order volume is one of the biggest challenges for any enterprise dependent on distribution.
That is troubling. As order delivery has become a central part of the shopping experience, the success or failure of that delivery now has a huge impact on the customer’s perception of the company and product. Since the delivery is the only direct touch-point most customers have with a company, the quality of that delivery weighs heavily on the customer’s overall level of satisfaction. Here are some stats that illustrate just how deep that impact goes:
- 29% of shoppers will abandon a retailer if just one delivery is incorrect.
- 62% of shoppers are less like to return to a retailer for future purchases if a delivery does not arrive within two days of the promised window.
- 68% of shoppers have higher expectations for perfect delivery during the rush of the holiday season.
What these statistics make clear is that the quality of the distribution process is one of the single greatest drivers of customer satisfaction. Unfortunately, perfect delivery is considered unremarkable, while anything less than perfect is considered unacceptable.
This is only complicated by the fact that a customer’s perception of distribution is based on factors besides simply when a package arrives. Customers now have the expectation that every aspect of the delivery will be flexible enough to meet their exact needs and perfect no matter what form it takes. Here are some factors that will influence how a customer feels about distribution.
- The availability of all products at all times
- The number of delivery options available
- The cost of the delivery and the availability of free delivery
- The speed of the delivery regardless of when an order was placed
- The ability to track the delivery
- The condition of the package once it’s delivered
- The contents of the package and whether they are correct and undamaged
- The ease of making a repeat purchase
Consider how perfect a distribution network must be in order to live up the expectations of today’s consumers. Then consider how little it would take for a distribution network to fall short of expectations and turn a paying customer into a brand antagonist. At this point it is not just important but absolutely essential for companies to have a finely-tuned distribution network that is able to respond to the unexpected without is impacting the customer.
Achieving that takes more than just extra staff, new equipment, or more rigorous policies. In fact, these kinds of short-sighted solutions are likely to introduce more disruptions than actual process improvements. The only way to make meaningful and reliable improvements to distribution is to gain perspective over the distribution network as a whole, and to integrate it with other customer-facing departments like sales and marketing.
A tool like ERP distribution software makes it easy to spot what is working and what is not. It also highlights issues that could compromise one order, or a million orders, before those orders are even placed. Finally, it integrates the efforts of everyone involved with promoting, closing, and fulfilling orders so that they never work in conflict.
The link between distribution and customer satisfaction will only deepen as the internet grows into the dominant marketplace for all goods. The companies that make a serious effort to optimize distribution and order management will gain a significant competitive advantage. All others will fall away.