More than three quarters (78 percent) of adults would likely switch to an alternative retailer the next time they shop for products online if they have a poor ordering experience, according to the third annual Customer Pulse 2017 Report from JDA and Centiro, conducted by YouGov.
The new UK study comes at a time when problems with online orders are on the increase—more than half (56 percent) of adults surveyed had experienced a problem with an online order in the last 12 months, an increase compared to 53 percent in 2016 and 47 percent in 2015. Of those who had experienced a problem, 42 percent had experienced late delivery, 37 percent had missed a delivery despite being at home, 25 percent never received an item and 24 percent received a damaged item.
Retailers are continuing to perfect the art of Click & Collect
The research found that retailers are addressing the problems customers were previously having with Click & Collect. The number of UK adults that have used Click & Collect in the last 12 months and experienced an issue with the service fell to 43 percent; down from 45 percent in 2016, and 47 percent in 2015. Among those that experienced problems with a Click & Collect order within the last 12 months, 26 percent cited long waiting times due to a lack of staff (down from 35 percent in 2016) and 18 percent said staff had been unable to locate Click & Collect items in store (down from 32 per cent in 2016).
These positive steps are being made at a time when Click & Collect use remains high—with more than half of the UK online shoppers surveyed (54 percent) stating they had used Click & Collect in the last 12 months. Retailers are also now beginning to realize additional benefits from Click & Collect, with nearly a quarter (23 percent) of these users stating they had made an additional purchase in-store when picking up a Click & Collect order.
“As the data shows, UK retailers face a challenge on several fronts when it comes to online shopping. Fulfillment and ‘last-mile’ issues continue to hinder retailers’ efforts at a time when consumers are becoming increasingly intolerant of poor service. Today’s shoppers expect retailers to offer a high-level of service across all channels—those retailers that fail to keep up with demand put themselves in serious danger of being left behind,” said Jason Shorrock, vice president of retail strategy, EMEA region, at JDA, in a news release. “However, it does appear retailers’ continuing investments in Click & Collect are starting to pay off. Almost a third of UK adults made an additional purchase when visiting a store for a Click & Collect item, which demonstrates the new revenue streams that can open up when a customer sets foot in a physical store. In the online age, some might argue that footfall has lost some of the importance it once held, but these figures could signal the start of an about-face.”
Returns remain a retail headache
As reported in JDA/PwC’s CEO Viewpoint 2017: The Transformation of Retail, almost three-quarters of global CEOs stated that handling customer returns was impacting on profits. This year’s Customer Pulse study revealed that a third (33 percent) of UK adults who shop online return up to two non-grocery items a year, and 25 percent return three or more non-grocery items a year.
The most popular reason for making a return among UK adults was due to items not being what they were expecting (38 percent). This was followed by the item being faulty (32 percent) and the fact that they ordered several alternatives with the intention of returning the items they did not want (17 percent).
“Effectively dealing with returns can’t be ignored. The research shows that for nearly two thirds of consumers, the ease of being able to return items factors into who they shop online with,” said Niklas Hedin, CEO of Centiro, in the release. “Retailers need to see returns as another customer touchpoint, and a way to make a positive impression that engenders greater customer loyalty. It will be those retailers that offer a full-circle brand experience that will capture the larger share of customer wallets.”
People ‘getting real’ about delivery charges
With the cost of fulfilling orders being increasingly identified as a pain point by retailers, many of them have started to introduce minimum order thresholds for free delivery. The CEO Viewpoint 2017: The Transformation of Retail report revealed that 62 percent of CEOs plan to raise minimum order thresholds in 2017, up from 39 percent in 2016. In comparison, the JDA Customer Pulse research reveals that shoppers are adapting to these changing conditions, which is encouraging for retailers. Seventy-five per cent of UK adults would be willing to exceed a minimum order value to qualify for free delivery.
Mobile investments set to pay off
The research highlights the fact that a growing number of consumers are embracing mobile as part of the retail experience; nearly half (46 percent) of UK adults are using mobile devices in stores. Thirty per cent of them use mobile devices to check/compare prices, 22 percent read product/service reviews on a mobile device and 21 percent use a mobile device for entertainment while queueing. The research indicates the use of mobile will be central to shoppers’ interactions with retailers in the future. When asked about the technologies they will use to interact with retailers in five years’ time, the most popular was mobile (30 percent).
“Now is the time for retailers to make difficult decisions if they want to ensure long-term profitability. The days of trying to be ‘all things to all people’ are coming to an end. To get ahead and stay ahead, retailers need to think smart—finding the perfect balance between cost-effectiveness and a great customer experience. For traditional ‘bricks & mortar’ retailers especially, this remains a challenge with the likes of Amazon eroding their market share. However, by developing a deeper understanding of customers and all fulfillment channels, retailers can start to win back customers and revenue,” continued Shorrock.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,070 UK adults. Fieldwork was undertaken between 29-30 December 2016. The surveys were carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).