Post-COVID: Retail Consumer Expectations in Transportation Spend Management
In 2020, the retail industry ran into two challenges that became game-changers: a surge in direct-to-consumer shipping volumes and more rapidly changing consumer expectations. In the US alone, 2020 saw a 44% YoY increase in e-commerce sales. Shipping massive volumes accurately and cost-effectively through a landscape riddled with COVID-19 pandemic closures and boundaries grew more complex when factoring in the established consumer expectation for fast shipping. So, consumers changed their expectations.
During the pandemic, consumers did allow for slightly longer shipping times—increasing from 5 to 8 days. But In turn, they expected free shipping, easier returns, and an overall better customer experience. As many as 86% of consumers expect to continue shopping online even when social distancing measures are removed. History has taught us that once consumers get a taste of a better customer experience, they’re unlikely to forget it. Those higher expectations are likely to stick around.
We’ll walk you through the main consumer expectations post-COVID, as well as how you can continue to meet and dare to exceed them, leaving your competition behind.
Faster Shipping at Low or No Cost
The expectation for expedited delivery at low or no cost was molded prior to the COVID-19 pandemic. As what is now known as the ‘Amazon Effect’, the e-commerce giant made it the norm for consumers to expect fast delivery at low or free costs. Other companies, such as Walmart and Target, adapted quickly to jump on the bandwagon. Customers noticed.
The pandemic went on to elevate the average consumer’s regard for speedy delivery, as 88% of retail customers are willing to pay for same-day or faster delivery. The conundrum comes in when factoring in the cost, though, as 31% of consumers are willing to pay up to only $5 USD for that service. Finding that balance between customer satisfaction and scalability is key for businesses to survive and compete with e-commerce giants.
To strike that balance, we’ve created the Trax Transportation Spend Management Maturity Model, a framework that provides a roadmap for large, global enterprises to shift from a lack of visibility and control to a fully-optimized and accurate data-based transportation network—for all modes and geographies. During unprecedented times, such as the pandemic, a company that has optimized its Transportation Spend Management wouldn’t be scrambling and hindered by the pandemic; it’d use the challenges as an opportunity to get ahead of the competition and attract new customers. Our plethora of tools, such as Rate Manager or RFx Manager, help you seize these opportunities to become a leader in the market.
Real Time and Upfront Transparency
While many retail consumers experienced delays in their shipments during 2020, the majority of consumers were kept well-informed of delays or updates. In today’s world of real-time communication, customers are more tolerant when they’re always ‘in the know’ and are more likely to exhibit brand loyalty.
This buyer expectation is here to stay. Although companies vary in their communication style—a website notification, text message, email, or otherwise, the important point is a client wants to know about delays before or as they happen, not after.
In order to offer this real-time visibility, you need complete visibility over real-time freight data. When you’ve optimized your Transportation Spend Management, you have a constant feed of real-time data on shipment locations, carrier performance, and more.
On-Time and Quality Deliveries
Consistently offering timely, quality deliveries is key for maintaining customer loyalty. In 2020, 36% of customers experienced significant delays in shipping, while 21% say that they would leave an online shopping website if their preferred method of delivery was not present.
Shipping has gained growing importance with customers as the face of a company. Consumers have come to view delayed or damaged shipments as a negative sign of the company’s professionalism. This can lead to negative branding, lost sales, reduction in cash flow through constant returns, or more.
The key is to create and control a robust logistical network and rectify areas of weakness or possible risk. This can be done through enhanced visibility into carrier performance, as it highlights where shipments are going wrong with any global or multimodal carrier. Astutely assessing carrier performance can also provide you with a clear view of which carrier provides the services that meet your exact needs.
Through our Carrier Management Services and our Performance Manager solution, you’ll gain end-to-end visibility into the state of your shipments. By creating customized carrier scorecards with the most important KPIs for your needs, you can easily identify the best carrier for the job, as well as know who to rely on in times of crisis. You want to constantly deliver quality, which means consistent on-time and undamaged shipments—something that optimizing your Transportation Spend Management allows you to do.
Free and Easy Return Shipping
As online purchases increased in 2020, companies had to adapt to a new return mechanism. A growing number of consumers “bracket” their purchases. This became such a major trend that companies had to factor return shipments into their costs, as 70% of customers make a purchase based on the return policy.
Companies now have to factor in return costs and operations when conducting online sales. This hectic forecasting has led to companies setting up certain delivery points for returns, cycled return shipments, and return shipment payments. It’s those companies that could walk the fine line between good customer experience and cost allocation that led the way in 2020. Customers will expect this to become the norm going forward, and it’s now up to companies to adapt to this new need. However, this is a complicated task that necessitates having the right data at your fingertips through the right tools, such as Trax’s Budget Manager, and efficiently and swiftly filing claims to boost your cash flow with our Claims Manager.
Maturing through Trax’s Transportation Spend Management Maturity Model helps you to better forecast and plan and execute swift, efficient returns to keep your customers happy and your bottom line bolstered. Having real-time data insight means you can allocate costs at a more accurate level, identify which products and/or markets are susceptible to higher return rates, and more. To deal with this efficiently and continue to jump on new opportunities, you need to free up resources from other tasks, such as claims management, accruals management, and more. This is possible with outsourcing these and other tasks, such as freight audit and payment, to an expert partner like Trax.
Greater Expectations Require Better Transportation Spend Management
As consumer expectations evolve, so should retail supply chains. To meet the new standard, and even go beyond it, you need full visibility and control over your retail Transportation Spend Management. Those who master it will thrive in a post-pandemic age. To learn more about how to optimize your Transportation Spend Management, contact Trax today.
Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.