In 2011, internet retail sales increased by 14 per cent to more than £50bn, and this growth is anticipated to reach ?77bn this year.
The online retail boom is the result of a number of factors, most notably affordable 24/7 internet connections, simple and secure payment systems and the ever increasing functionality of mobile devices, which has allowed mobile-based retail sites to flourish.
However, as the rate of online shopping increases, customer expectations rise with it, and although many are prepared to pay for the convenience of home shopping ( £3,632m is being spent per year on delivery charges), many are not happy with the current service they receive.
The online retail boom
A study recently commissioned by Trimble which surveyed 1,000 British adults revealed that convenience is cited as the key motivation for shopping via the web, but crowded high streets and shopping centres, and busy lifestyles are also driving UK consumers online. The most popular items bought online are books, clothes and DVDs, CDs, video games. Hardly surprising, considering that online retail giant Amazon announced its 2011 fourth quarter sales results as being between $12-13.4bn.
Affordable, modern PCs and the rise of smart phones and tablets are major contributors to the online retail era. 45 per cent of 25-34 year olds surveyed admitted to buying goods online via a PC on a monthly basis and 21 per cent online via a mobile device. As a result, a staggering 65 per cent of respondents held the view that online shopping (via a PC, smartphone or tablet) will increase in the next five years, prompting the decline of the high street.
A recent Capgemini survey revealed similar results and highlighted the emergence of “showrooming” and the expectation that by 2020 many physical stores will exist merely as giant display cases to showcase products available for online order. The expectation of showrooming comes as most consumers envisage a shopping experience that combines various channels, including social, web, mobile and physical stores.
Delivery and customer satisfaction
More often than not shopping online requires a delivery charge and when asked why consumers are prepared to pay for the delivery of goods, common responses included that, “it’s far more easy and convenient to shop online than it is to visit a store”, “online shops have a wider selection to choose from” and “if goods are too heavy to carry home it is easier to get them delivered”.
Trimble’s research revealed that consumers are prepared to pay to get the items they want, when they want them; 40 per cent of consumers are willing to pay for next day delivery, 22 per cent would pay for delivery within a two-hour slot; 13 per cent would pay for a Saturday delivery and nearly three quarters of respondents agree that fast delivery is a key factor when shopping online.
However, although consumers are prepared to pay for delivery charges, one quarter of UK adults believe that delivery costs are too high and are dissatisfied with the current service they receive. Effective delivery is critical to a positive service experience, but many companies are not meeting their customer’s needs. Tardy arrivals, missing deliveries and the inability to specify a time and date for arrival are the key contributors which have left consumers feeling let down by online retailers. It is no longer acceptable to say “anytime during the day”. In fact, one third of respondents have to take annual, sick or unpaid leave to wait for delivery and service.
Technology is available today that can help retailers improve their service for consumers. The key is making and keeping commitments and then ensuring the customer is informed along the way. As the online era is here to stay, retailers have a real opportunity to improve their brand recognition and leapfrog the competition by providing excellent customer service.
The role of technology
Managing the performance of a fleet of vehicles and drivers who are out in the field delivering service to your customers is not an easy task and in order to do this effectively, businesses require a complete overview and understanding of what is occurring in real time. The right technology can allow service managers to monitor the day’s work in a snapshot and react to any changes, from an emergency job to employee sickness, and make the necessary changes to keep customer expectations on track.
Today’s fleet and work management technology includes the vehicle location, speed, time, route as well as time on site and job status information, enabling every aspect of mobile operations to be measured, recorded and analysed. This insight delivers greater intelligence to managers, which they can use to inform customers, manage their resources effectively and also use retrospectively to identify improvement gaps and implement best practice.
Trimble recently carried out an independent study amongst managers and directors operating large field-based work forces in the UK and found that only 18 per cent possess fully automated scheduling, dispatch and mobility tools. The majority are operating partly-manual, partly-automated systems, integrating a diverse mix of often incompatible legacy systems. This is preventing many organisations from realising the full potential of technology to increase workforce efficiency, which is ultimately a crucial factor in achieving field and customer service excellence.
Ultimately, customer satisfaction can go hand in hand with the online retail boom if companies embrace the capabilities of technology. You cannot manage what you cannot measure, and taking steps to achieve optimum productivity and on-time service delivery whilst keeping consumers informed along the way can pay dividends when it comes to keeping your customers happy and your brand reputation intact.
Mark Forrest is general manager at Trimble Field Service Management.