It can be easy to focus on short term challenges as opposed to the issues ahead. While the end of year rush is a vital opportunity for industrial and logistics companies, it’s now vital to be ready for the busy January sales.
The strategies you have in place may be able to deal with the problems brought about over Christmas, but are they equipped to overcome the challenges that emerge at the beginning of the year? Here are some important factors to consider after the peak season.
E-commerce and the law
In spite of its ever-growing popularity, there are many consumer fears around buying goods online; the risk of an item breaking in transit, receiving the wrong delivery, the parcel being placed in an inappropriate storage location being stolen. With several recent controversies surrounding parcel delivery firms, a perception has developed that the sector is poorly regulated and operators are willing to cut corners. However, the law around e-commerce is extensive and clear, and businesses that are compliant with legislation will operate smoothly and guarantee customer satisfaction.
The relevant legislation includes the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 20133, the Consumer Protection from Unfair Trading Regulations 20084, and the Price Marking Order 20045. The regulations cover the information that e-retailers must provide to consumers prior to the purchase when cancelling or refunding an order, the delivery requirements and call costs. E-retailers must outline the details of their products, delivery details (including charges and restrictions), a cancellation policy, return charges, payment means, and contact details.
Consumers are entitled to 14 days to cancel an order after purchasing a product, plus the right to cancel an order in case of late delivery. A product refund needs to be made within 14 days of it returning to the retailer, including the standard cost of delivery if any. Items need to be delivered within 30 days, apart from when a retailer and consumer agree otherwise, plus the delivery process is the e-retailer’s responsibility until the consumer receives the goods. When a post-order phone line is provided, calls charges are not to exceed the basic rate.
Meeting consumer expectations
In 2016, the UK’s e-commerce market grew into the world’s third-largest, with international marketplaces like Amazon becoming increasingly dominant in the country’s retail sector. Millions of consumers have signed up to the company’s Prime subscription scheme, which provides a range of postage options, including one-day delivery and same-day delivery; major brands like ASOS, Next and Argos also offer a variety of postage prices and next day delivery times, reflecting the fierce competition for online consumers.
Figures show that only 43% of shoppers are willing to pay a delivery charge, of which 48% deemed the capacity to reserve a certain delivery time as highly important, suggesting that consumers are divided about delivery costs and what features should be available. Additionally, recent years have seen consumers become more conscious about pressing issues like sustainability, whether it’s reducing the amount of packaging used or the emissions generated by delivery vehicles.
As we’ve seen from major brands, it’s key to offer consumers choice, whether it’s a premium one-day service, free click and collect, or evenly priced standard delivery. Businesses need to package their goods in a way that is consistent with their brand, whether it’s Amazon’s stripped-back cardboard boxes or Glossier’s elaborate pink wrapping, while aware of the potential consumer backlash. Furthermore, it’s vital to have clear shipping instructions and effective, personable customer service to win and retain customers. The choice in today’s market is simply so vast that consumer expectations must be exceeded, even if they can appear contradictory.
Mastering reverse logistics
After the struggle of the festive peak season comes the new year’s inevitable influx of return orders. For instance, UPS has called 2nd January it’s National Returns Day, with a projected 1.9 million inbound packages set to be processed, a rise of 26% from the previous year. Returns are estimated to cost UK retailers £60 billion per year, with a third of that due to e-commerce; to that end, major retailers like Amazon and ASOS have amended their returns policies as a way of reducing losses. It can cost double the amount for a product to be returned into the supply chain as it does to deliver it,” states Iain Prince, Supply Chain Director, KPMG in the UK. Larger businesses may be able to cope with losses, but with so many competing industrial and logistics small enterprises, it’s vital to create efficient reverse logistics processes.
To master reverse logistics, measures include offering extra storage space for returns; configuring supply chains for items that are returned for repair, refurbishment, recycling or disposal; identifying the frequency and specificity of items that are returned; establishing effective customer service for return inquiries; and having the manpower to keep up with ad hoc, unpredictable return orders. With the end of the year and January sales to contend with, businesses must seriously judge whether their reverse logistics processes are equipped to cope with the pace of demand.