Today, for an e-commerce brand to be successful just offering deals and a variety of quality products is not enough. Now, the online customer wants their purchase to reach them as soon as possible. They no longer accept the 3 - 7-day delivery timeline that used to be the norm of the e-commerce industry. 

What are the new delivery demands?

According to the 2018 Consumer Trends Report by Kibo, an omnichannel e-commerce platform, 63% of the respondents said that speed and delivery options were important to them. 40% said that a delivery timeline beyond 2 days would deter them from making a purchase. 76% replied that access to multiple fulfillment options was a critical criteria for making the purchase. 

Another survey - Retail TouchPoints 2018 Last Mile Survey linked in the article by Retail TouchPoints, highlights similar trends with 65% respondents saying they want flexible delivery options, 61% want quicker delivery, and 51% want to be able to track their purchase order real-time. 

A survey - How consumers view online delivery options, which had 3,500 participants from UK, U.S., France, Spain, Germany, Italy, and The Netherlands, also came up with findings that showed that a lack of quick delivery and flexible delivery options are fast becoming deal breakers for online customers. 60% of their respondents said that they have chosen an e-commerce only because it had better delivery options. 35% of its respondents said they would consider paying more for better options and speed if they required it. 28% of those surveyed thought same day delivery should be free. 71% of the participants showed a preference for getting all their purchases from one e-commerce store as a single delivery instead of multiple individual deliveries. 

The results of these studies tell us that e-commerce customers have very specific demands with respect to delivery and order fulfillment options which, if not met, might impact their decision to buy from a certain online brand. So, reliable logistics is a major factor - it is something that customers have come to expect from an e-commerce brand. 

How e-commerce brands and logistics companies can meet customers’ delivery expectations?

Most e-commerce brands outsource delivery or their logistics and allied activities to 3PL and 4PL service providers like us. So, ensuring delivery and other requirements like flexible delivery time slots, order fulfillment options, and speed are as much a responsibility of the e-commerce portal as it is of its logistics service provider. According to the 2019 Third-Party Logistics Study - The State of Logistics Outsourcing, which studied the relationship between e-commerce businesses and their logistics service providers, “89% of the shippers and 98% of 3PL providers agree that the use of 3PLs has contributed to improving services to the ultimate customers”.  

While the logistics firm may not suffer directly when failing to meet delivery schedules or order fulfillment requirements, it does stand to lose business if the e-commerce website loses its customers due to logistical oversight. 

The study also found that last yard delivery and reverse logistics are fast becoming a necessary requirement for 3PLs and their shippers. Customers today expect to get a wider choice of delivery locations and time slots and Sunday delivery from their retailers. 

While the demands have been clearly put forth by the customers and even understood by the businesses and logistics service providers, fulfilling them satisfactorily still poses a challenge on many fronts for both. 

For example, according to the results of the above study, the shippers from the omnichannel category have cited the following challenges - 42% said last minute order changes are an issue, 35% find lack of visibility in inventory, inventory control, and order management a challenge. 27% have cited system integration to be something that needs to be worked on. 13% find expedited delivery an area for improvement. 12% say they need to work on return management. 

Similarly, the 3PLs servicing the omnichannel have highlighted the following challenges - 42% say system integration is an issue. 40% find last-minute delivery changes a problem. 25% have highlighted the lack of complete customer information as an impediment. 18% of the 3PLs surveyed find return management a challenge. 13% say they need to work on quick delivery.

While these are only some of the challenges mentioned in the report, they sufficiently highlight the issues faced by the businesses and the service providers. As the 2019 Third-Party Logistics Study suggests, to streamline and deliver on the customer’s delivery expectations, both the shippers and the 3PLs need to work together. 

This case study of a BlueGrace e-commerce customer where our team worked with the customer to identify the gaps and helped them integrate their business systems and plan their logistics to improve their services and reduce freight cost is a classic example of what customers and logistics providers can achieve if they collaborate. 

The 2019 Third-Party Logistics Study - The State of Logistics Outsourcing, lists some important measures that 3PLs and shippers can take to improve their services. Four of those mentioned in the study which we thought will enable e-commerce brands and 3PLs to get a better control over their deliveries and improve performance are: 

Communication: Logistical challenges are often the result of poor or delayed communication between the parties involved. So, streamlining communication and exchange of information between the shipper and the 3PL will to a certain extent help improve service and overcome challenges at both ends. 

Technology: Today use of technology has become imperative in all aspects of a business. The right technology can help shippers and 3PLs to manage and track orders, manage transportation, plan inventory, create optimum routes and delivery schedules. 

System integration: We cannot stress enough the importance and the benefits of system integration for improving logistics. The study also highlights this as one of the main challenges faced by both the shippers and the 3PLs. 

A common platform which can be accessed by the shipper, the 3PL, and the customer will help manage the delivery, highlight last minute changes to the order, and facilitate easy tracking of the order. It will also help reduce the exchange of emails and verbal follow up done by each party. 

Brand collaboration: As this study has suggested, collaboration is an option that shippers should explore. The study found that 41% of shippers and 86% of the 3PL are open to collaborating with other brands and service providers including their competitors to optimize logistics costs. This collaboration can also improve delivery schedules and service more routes. 

These measures, if implemented, can help both the shippers and the 3PLs address some of their pressing concerns related to delivery and reduce the gap between customer expectation and service delivered.