UPS began onboarding customers for its new UPS My Choice for business service in the US. According to UPS, this is the first visibility and tracking solution in the US designed for small and medium-sized businesses (SMBs). Read more
DHL Express has opened a new state-of-the-art customer support centre in Brisbane’s central business district. Read more
A study by Zebra Technologies Corporation found that mobile technology investment is a top priority for 36 per cent of organisations and a growing priority for an additional 58 per cent, to keep up with rapidly evolving and increasing customer demand. The findings of the Future of Field Operations report indicate investments will be made in new technologies and enterprise mobile devices to enhance frontline worker productivity and customer satisfaction in field operations including fleet management, field services, proof of delivery and direct store delivery workflows.
“Driven by the acceleration of e-commerce along with customers’ heightened expectations and more focus within companies on differentiating service levels, the field operations industry is rapidly adapting the way it looks at its mobile technology investments,” said director of vertical marketing strategy, manufacturing, transportation & logistics at Zebra Technologies Jim Hilton. “Our study shows how growing challenges related to the on-demand economy drive organisations to adopt transformative technologies such as augmented reality and intelligent labels to provide visibility and integrate business intelligence for a performance edge.”
Key survey findings
Equipping frontline workers with enterprise mobile devices remains a priority to stay competitive.
- The survey shows today only one-fifth of organisations have a majority of their field-based operations using enterprise mobile devices. This is estimated to reach 50 per cent in five years.
- Respondents indicate most organisations intend to invest in handheld mobile computers, mobile printers and rugged tablets. From 2018 to 2023, handheld mobile computer usage with built-in barcode scanners is forecasted to grow by 45 per cent, mobile printers by 53 per cent and rugged tablets by 54 per cent. The higher levels of inventory, shipment and asset accuracy provided by using these devices is expected to increase business revenues.
- A key driver of productivity, efficiency and cost-savings in field operations is ensuring ruggedised enterprise devices replace traditional consumer ones. Nearly 80 per cent of respondents usually or always conduct a total cost of ownership (TCO) analysis of business devices prior to making a capital expenditure. Only 32 per cent of respondents believe that consumer smartphones have better TCO than rugged devices.
Tertiary concerns and post-sale factors are important for organisations when evaluating frontline worker enterprise mobile devices.
- The survey reveals these TCO considerations when investing in new frontline enterprise technology: replacement (47 per cent), initial device (44 per cent), application development (44 per cent) and programming/IT (40 per cent).
- Almost 40 per cent of respondents say device management and support costs are important as well as customer service (37 per cent), device lifecycle cadence (36 per cent) and repair costs (35 per cent). Such factors increasingly influence the purchase cycle, showing that those who do not provide clear value or cannot control these costs will quickly be overtaken by those who do.
Emerging technologies and faster networks are disrupting field operations.
- The survey shows seven in ten organisations agree faster mobile networks will be a key driver for field operations investment to enable the use of disruptive technology.
- Significant industry game-changers will be droids and drones, with over a third of decision makers citing them as the biggest disruptors.
- The use of smart technologies such as sensors, RFID, and intelligent labels also play a role in transforming the industry. More than a quarter of respondents continue to view augmented/virtual reality (29 per cent), sensors (28 per cent), RFID and intelligent labels (28 per cent) as well as truck loading automation (28 per cent) as disruptive factors.
Key regional findings
- Asia Pacific: 44 per cent of respondents consider truck loading automation will be among one of the most disruptive technologies, compared respectively to 28 per cent globally.
- Europe, Middle East and Africa: 70 per cent of respondents agree e-commerce is driving the need for faster field operations.
- Latin America: 83 per cent agree that faster wireless networks (4G/5G) are driving greater investment in new field operations technologies, compared with 70 per cent of the global sample.
- North America: 36 per cent of respondents plan to implement rugged tablets in the next year.
Survey background and methodology
- The Future of Field Operations Vision study reports why mobile technology investment is a top priority for organisations, with over half planning investments to keep pace with more proactive, customer-centric, business-driven systems.
- The online survey interviewed 2,075 mobility decision makers from 20 countries across the United States, Canada, Brazil, Mexico, Colombia, Chile, Argentina, France, Germany, United Kingdom, Italy, Sweden, Netherlands, Saudi Arabia, South Africa, China, India, Japan, Australia and New Zealand.
With online shopping growing at exponential rates, it is inevitable that online shoppers will want to return some purchases, and until recently, returns have been treated by both shoppers and retailers as a hassle. But in 2019, returns policies can be make or break for retailers who are facing a dilemma – how to respond to increasingly demanding consumer expectations without killing their profits in the process.
Power Retail has examined the issue in its latest Spotlight Series monthly report titled ‘Returns – The Profit Killer?’.
The report distils over 5,650 interviews with online shoppers and Australian online retailers, to provide insights and strategies for retailers to balance the art of attracting shoppers while remaining profitable.
Managing director of Power Retail Grant Arnott said: “In this competitive climate, retailers are attempting to both limit and encourage returns. The issue is that the benchmarks are being set, often by large international retailers, who can afford to take a short-term hit when strategising for the long-term, big-picture view. But what consumers view as the ‘new normal’ isn’t actually maintainable for many. Yet at the same time, returns are a massive marketing opportunity.
“There is no single solution to minimising returns, though online retailers such as Hunting for George demonstrate the type of multifaceted approach that is required. From educational videos to providing samples for larger purchases and offering a live chat service, they have engaged with their target audience and designed services that address their specific needs.”
Key findings from the Returns Report include:
- 91% of online shoppers consider a retailer’s returns policy when making a purchase online.
- On average, Australian online retailers have a return rate of 9%. This varies dramatically depending on the category, with some online fashion retailers experiencing a return rate of 40%.
- When it comes to the biggest hassle in returning an item, finding an opportunity to lodge the return (33%) and getting around to it (20%) are interrelated and significant issues, with some prepared to pay for a courier pick-up service.
- 41% of Australian consumers would choose free returns over a range of other desirable options, including next day delivery.
- Females (56%) were much more likely to return their last online purchase because it didn’t fit, or they didn’t like the colour compared to males (34%).
- High quality product images, information and customer reviews all help reduce returns, and Amazon Australia is currently setting customer expectations in all of these areas.
Following an analysis of this issue within the industry, Mr Arnott provides his top four predictions of returns for the next five years.
- The report found that 24% of online shoppers aged under 25 consider returning an item compared to only 12% of those aged over 65. With this in mind, young consumers will continue to hold retailers to ransom, as they’ll only shop with retailers who offer generous returns policies.
- Retailer profit margins will continue to be eroded as growing numbers of ‘serial returners’ take advantage of generous return policies at a significant expense to the retailer. 74% of Australian online shoppers expect free returns on all items, meaning the retailer must bear the cost of the delivery to the customer and the delivery of the returned items.
- Offering free returns and longer return periods in pursuit of a sugar hit in sales and customer satisfaction is a short-term strategy that is unsustainable in the Australian market with the high cost of reverse logistics.
- The genie is out of the bottle when it comes to returns, and hundreds of retailers chasing fickle consumers who love returns policies that allow them to ‘try before you buy’ are going to find themselves in a world of hurt in the next few years. Like discounting, it becomes a race to self-destruction.
The number of Australians jumping online to shop continues to increase, with new research from Australia Post showing the total online spending in 2018 topped $27.5 billion, a 24 per cent increase for the year.
Australia Post has released its annual Inside Australian Online Shopping Report – an overview of Australia’s eCommerce market that provides key insights into who is shopping online, and what they’re buying.
It shows that Australians are embracing online shopping at an accelerated rate – with the online goods spending for 2018 reaching 10 per cent of total retail – two years faster than expected.
Australia Post general manager for parcels and express services Ben Franzi said the report also shows that 73 per cent of Australian households shopped online in 2018 – some 7.6 million Australian households.
“Australians are getting online more and more, and changing the face of shopping. With it, they are also expecting faster service and delivery – with next day deliveries growing by 31.7 per cent, with more than 62 per cent of these fashion-related purchases.”
Mr Franzi also said the way Australians are shopping online is also changing, with smartphones increasingly being the medium of choice.
“Use of the smartphone to make online purchases increased 28 per cent for the year – to now make up more than 26 per cent of all purchases. It now sits comfortably alongside the laptop (32.8 per cent) and desktop (27.3 per cent), both of which fell for the year.”
Fashion continues to be the leading category, accounting for more than a third (35 per cent) of all purchases, with more than 20 per cent growth year on year. Variety stores, health and beauty and homewares and appliances also attracted lots of online shoppers.
Marketplaces such as eBay and Etsy, together with newcomers Amazon, Catch Group, Kogan and Myer, continue to be popular.
“Australians appreciate the convenience that comes with being able to access goods from a variety of sellers in one place – it is quite literally a market, replicated online and providing an abundance of choice for consumers.”
The convenience of Buy Now, Pay Later (BNPL) options such as AfterPay has also sparked joy for consumers, especially amongst millennials – those born after 1981 – who have become the fastest adopters. Unlike a credit card there is no service fee for customers who pay on time.
When it comes to overall volumes, the November/December period was the busiest time of the year – as Australians sought to snag a bargain ahead of Christmas.
“The five weeks from 11 November to 15 December accounted for almost 15 per cent of all online purchases. The peak for this period was the Black Friday / Cyber Monday sales, which accounted for the biggest online shopping week in Australia’s history, recording growth of over 28 per cent, year-on-year.”
Cross-border e-commerce is also booming with New Zealand (29 per cent), China (15 per cent) and India (11 per cent) the leading purchasers of Australian goods online. Fashion is the leading category, followed by health & beauty and baby products which are in demand, due to Australia’s great reputation for producing clean safe and premium-quality products.
The number one online buying location was once again Point Cook in Melbourne’s western suburbs, which topped the list for the fourth year in a row. The top twelve locations are again dominated by suburbs that have an influx of young families.
Top twelve online shopping locations by postcode:
- Point Cook VIC
- Toowoomba QLD
- Mackay QLD
- Liverpool NSW
- Cranbourne VIC
- Gosford NSW
- Hoppers Crossing VIC
- Campbelltown NSW
- Bundaberg QLD
- Wyong NSW
- Rouse Hill NSW
- Cairns QLD
Dematic has announced the launch of its Micro-Fulfilment System, an e-commerce order assembly system for retailers that need to support same day home delivery, as well as click-and-collect.
The Dematic Micro-Fulfilment system is an ultra-local distribution solution that enables orders to be assembled quickly in a location close to the customer, inside a retail store or in an urban / suburban DC (distribution centre). The order assembly system is designed around process improvements and comprised of performance optimising software and automation.
“Dematic Micro-Fulfilment is a high-performance solution that makes rapid response order assembly cost effective for the customer and the retailer. In operation, the automated order assembly solution provides compelling results by minimising the time, space, and cost to fill orders,” said Pas Tomasiello, Senior Director Integrated Systems Group ANZ, Dematic.
The system accommodates a wide range of inventory in a compact, high-density layout that requires a small footprint. It significantly reduces the cost per order picked to a level that allows retailers to offer rapid response e-fulfilment at a price point attractive to their customers, and with the appropriate margin for retailers.
Toyota has launched an all-new HiAce range of vans. According to Toyota Australia, the first new HiAce in 15 years offer improvements in driver comfort, performance, safety and functionality with the same expansive carrying capacity as its predecessor.
As the first new HiAce in 15 years, it has been completely redesigned with a new semi-bonneted configuration to more than meet the needs of commercial, private, corporate and fleet buyers.
Sitting on a substantially longer and wider all-new platform, the new HiAce combines efficient new turbodiesel and V6 petrol engines that deliver more power, refinement and driveability, the latest suite of Toyota Safety Sense features and a redesigned cabin with improved ergonomics for greater driver comfort and convenience.
Toyota Vice President Sales and Marketing Sean Hanley said every aspect of the all-new HiAce has been designed to appeal to owners who often spend long days behind the wheel.
“Its impressive carrying capacity is even more flexible and user-friendly with increased internal width, and increased height on LWB versions, and dual sliding side doors on van models which, for the SLWB variants, can take a standard Australian pallet. We are also providing HiAce customers with the same high level of safety as found in our passenger cars and SUVs with a full suite of advanced Toyota Safety Sense technologies,” Sean said.
Australian shoppers will be just as likely to open their wallets for online shopping as they will in-store in a decade’s time, with new research by Australia Post revealing that by 2030, it is expected that one-in-two purchases will be made digitally.
The survey of almost one thousand small and mid-size Australian businesses across retail, manufacturing, logistics, financial services, education, health and utilities found that almost half (49 per cent) expect online retail to reach parity with bricks and mortar retail sales in 2030.
The findings come as online shoppers are invited to celebrate their favourite online retailer by voting in the Australia Post ORIAS People’s Choice Award. Voters have the chance to win the ultimate online shopping spree, an opportunity to spend $10,000 in 60 seconds on a range of products across travel, technology, fashion, homewares and leisure.
Australia Post general manager of segment development & marketing Rebecca Burrows said consumer habits have changed significantly over the past few years, with retailers evolving to find new ways that encourage people to buy.
“People want an in-store experience but in the comfort of their own living room – they want to see, touch and try. Trends such as Augmented Reality (AR) are bridging the gap between online and in-store shopping, and AI-driven personalisation and biometric payments are all shaping the way we shop. Leading retailers are also embracing mobile commerce and voice-activated shopping. It is those in tune with customers and willing to embrace the latest online technology trends who will have the winning strategy.”
One company doing this is fashion-tech company GlamCorner, a contender for this year’s Australia Post ORIAS People’s Choice Award.
Co-founder & CEO Dean Jones said GlamCorner’s vision is to revolutionise the way Australian women think about their wardrobes by providing a smarter and more sustainable alternative that is better for the community and the environment.
“One of the most important initiatives we’ve implemented over the past 12 months has been in direct response to customer feedback. We’ve introduced a monthly subscription box service, which gives our customers near-unlimited access to three pieces of designer clothing each month for formal occasions, workwear or everyday wear,” he said.
“The service is growing at an exponential rate, contributing significantly to the 30 tonnes of clothing we process each month. As a result, our customers are telling us their wardrobes are shrinking, while they still have a fresh new look every day.”
Voting for the Australia Post ORIAS People’s Choice Award for 2019 runs from 1-31 May via www.auspost.com.au/shoppingspree.
The Amazon effect
Industry experts are still divided on the impact services like Amazon Prime will have on the retail sector. Many believe the behemoth doesn’t do enough to differentiate itself in Australia, and that consumers are unlikely to get on board – however Woolworths CEO, Brad Banducci, calls it out as a new benchmark in terms of consumer expectations of delivery.
“We think Amazon Prime is the key vehicle, we see them being successful with that in the US and we will simply need to be better at on-demand,” he said, in line with the news of Woolworths-owned Endeavour Drinks Group’s 4.5 percent sales increase. “F18 was the year of pick-up for us.”
In the US, more than 50% of shopping journeys start with Amazon – and there’s no reason to believe Aussies won’t follow suit.
Amazon’s logistics, product range and deep knowledge of its customers pose a significant threat to Australian retailers. The e-tailer knows everything about its customers, to the point where it can predict what they will buy based on past transactions, and what they might like to buy in the future.
“Unless you’re using data effectively, you’re fighting with one arm tied behind your back.” Jonathan Reeve.
According to speaker, author, e-commerce fulfilment consultant and General Manager of Eagle Eye ANZ, Jonathan Reeve, local businesses are too focused on selling. “What I’ve seen over the last 17 years is that 80% of everyone’s attention has been on the digital challenge of selling,” he says. “The physical challenge of actually getting the products to the consumer has been given 20% of their attention.”
This trend needs to be reversed, says Reeve, as customers are buying an experience. They want cheaper and more convenient delivery, and that is what Amazon is providing.
With the entrance of Amazon, the continued presence of eBay and local operations like Catch.com.au, e-commerce in Australia will continue to grow rapidly whether we like it or not. To survive this surge, retailers must enhance their ability to collect, analyse and store data, and collaborate with other businesses and consumers to offer better service and better delivery.
“Customers are buying an experience. They want cheaper and more convenient delivery, and that is what Amazon is providing.” Jonathan Reeve, General Manager, Eagle Eye ANZ.
The changing face of brand loyalty
According to Councillor Susan Riley, who is responsible for the City of Melbourne’s Small Business, Retail and Hospitality portfolio, “customers come back [to boutique stores] because they like you and they know they’re going to get the service they want. Online doesn’t provide that.
“Online is a real issue for Melbourne. So many customers come in to the store – look, feel, shake – and then go buy it online,” she says.
But brand loyalty looks very different than it used to. The in-store/online balance is key for small businesses – they must become more experiential, so that people will come in-store for the activities that surround the buying experience, as much as the buying itself.
Retail industry executive at Telstra Gareth Jude said: “Based on our studies, Australian retailers achieve up to 20% attachment rates on sales for click’n’collect. Customers buy online then come in-store – and because of the great service and experience they’ve received, they decide they need to purchase something else while they’re there.
“Boutique retailers can complement their physical, in-store experience with an online presence and function.”
While Councillor Riley may be concerned about the notion of a “city of empty shops”, e-commerce provides a significant value-add for physical retailers. As Localz’ CRO James Westlake explains, when you use Woolies’ click’n’collect, you go in to pick up your shopping – but you browse around and shop in-store first before picking it up. Or even if you don’t, by the time you get home, you’ve forgotten something you needed to include in your order.
“Brand heritage now is a reduced value compared to convenience,” he said. “When a retailer gives customers back the time they were going to lose [by enabling them to shop online], they reward the business by doing more shopping. Gifting customers this time is what creates brand loyalty.”
Mr Westlake refers to UK clothing company, River Island, as another example.
“River Island has repositioned itself as a tech company that sells clothes, so it can fulfil customer journeys. It realises clothes are its commodity – but its ability to form a relationship with its customers and help them with their lifestyle is what maintains brand relevance and loyalty.”
For High Street stores, brand is something that keeps their customers coming in the door. But now shoppers can come in the door, try something on, then go online to buy it – with next day delivery included and at a lower price than in-store.
Today’s retailers need to consider brand value versus convenience. If you’re relevant to your customers at this moment, they will like you. If you’re not relevant, the customer won’t be interested.
So, what is the answer for small and medium-sized retailers who can’t count on brand loyalty to get customers through the door (or clicking online?) According to Localz’ Louise Robertson, they need to become more experiential.
“Where you used to find a coffee shop on the high street, today you’d find a coffee shop in the back of a hairdresser’s, or with art on the wall,” she said. “Businesses are merging and becoming more experiential, which is critical for them to reinvent themselves. It’s not good enough to do what they did 20 years ago.”
“We think Amazon Prime is the key vehicle, we see them being successful with that in the US, and we will simply need to be better at on-demand. Brad Banducci, CEO, Woolworths.
Data is knowledge is power
Consumers want complete control over their experience – and to provide this, businesses must know their customers intimately.
The key to getting e-commerce right comes down to data – and lots of it – about your customers and their habits, likes and preferences.
“As a retailer, you can always serve your customer better if you know more about them than the next guy,” said Telstra’s Gareth Jude.
Major e-tailers are continuing to turn data on its head, in stark contrast to the early periods of e-commerce when companies gathered plenty of information about their customers but didn’t know what to do with it. Businesses implemented complex CRM systems – only to have the data lay dormant.
“There’s a competitive imperative to get data right,” continued Mr Jude. “If you’re not doing anything with your data, Amazon, Alibaba and all the rest of them certainly are. And they’re going to eat your lunch.”
Jonathan Reeve concurred: “Unless you’re using data effectively, you’re fighting with one arm tied behind your back.”
Computing power and analysis are readily available as services – so there’s no excuse for Australian businesses not to be leveraging them. “Many technologies are converging, and there’s a lot more processing power available,” said Charles Edwards, Manager of supply chain management consultancy GRA. “This enables us to drive more insights from data with more data collection points, and we have the technology and computer power available to analyse it.
“It’s all about driving insights from consumer behaviour.”
“Boutique retailers can complement their physical, in-store experience with an online presence and function.” Gareth Jude, Retail Industry Executive, Telstra.
Over the horizon: the inevitable consumer mindset shift
The irrational, emotional, uneconomic Australian consumer is coming – and local businesses need to be ready. Although we might be reluctant now to share our data, the mindset shift is just over the horizon. It’s a journey that will organically happen.
Mr Edwards: “The first time I used an Uber, I thought – ‘I’d never get in to a stranger’s car!’” But his mindset changed as soon as he used the service and was amazed at its accuracy and cost-effectiveness.
Furthermore, there’s already a cognitive dissonance around how consumers share their data, and who they share it with. NBN Co’s Megan Park exclaimed: “Everyone’s opting out of MyHealthRecord – but they’re sharing their whole lives on Facebook!”
Pressure from consumers is also now being felt in the field services arena, with everyone wanting to know who, when and where their service will be delivered. The increased criticism and regulation of the European utilities is sector is driving a flow-on impact, and confidence in the Australian utilities sector is at an all-time low.
“Expectations of service delivery and parcel delivery are becoming converged,” said Localz’ regional sales director for A/NZ, Gareth Phillips. “Customers want more control and visibility of what they experience when they have their internet connected or their solar panels fitted. The Iconomy conversation is an important one for utilities and service companies to be involved in, as much as retailers.”
“Customers want more control and visibility of what they experience when they have their internet connected or their solar panels fitted. The Iconomy conversation is an important one for utilities and service companies to be involved in, as much as retailers.” Gareth Phillips Reg, Sales Director, Localz.
Online retail is only going to grow, and it remains an opportunity to be lost for local brands if they don’t take control of their own destinies and make the most of the data and the delivery services they have.
Australian businesses need to get their data analysis and deep learning right to give irrational, emotional and uneconomic consumers command of their delivery experience.
Localz’ Louise Robertson concluded: “It’s all about the human. Whatever technology we put around them, it’s all about emotions and data.”
Part 1. of this article appeared in the January-February issue of MHD Supply Chain Solutions magazine, which you can read here: https://bit.ly/2TZ3qnB. For more information visit www.localz.com.
Retailers who move quickly to invest in next-generation customer service technology are more likely to lead the battle for sales in a tightening economic environment, according to two of Australia’s most innovative online retailers.
The insights come as the search for Australia’s favourite online retailer kicks off, with the Australia Post ORIAS People’s Choice Award providing online retailers with a platform to elevate their brand, gain industry recognition, build trust, and grow customer loyalty.
One of last year’s winners Koh, credited the updating of its customer service software – ahead of many of its competitors – with helping it double revenue over the past 12 months.
Founder Adam Lindsay, who recently launched the eco-friendly cleaning products company into the UK, said the focus was on giving both existing and new customers what they want.
“If you don’t service existing customers properly, you’ll have to deal with a leaky bucket – and therefore spend more time and money on acquiring new customers,” Mr Lindsay said.
Kogan.com, which took out the 2018 Award for best large online retailer, reiterated its commitment to embracing data-driven insights to improve its customer service capability.
Director of customer care Daniel Beahan said Kogan.com considered itself a statistics business masquerading as an e-commerce company.
“Data is key to unlocking our customer expectations and it is our mission to understand the wants and needs of our customers better than any other online retailer,” Mr Beahan said.
“Company growth relies on us delighting our active customer base time and time again, and our mission remains to make the most in-demand products and services more affordable for all Australians.”
Last year’s winners highlighted a customer-first focus, an ability to change and be nimble, the importance of personalisation to create a tailored customer service experience, the continued embrace of social media platforms like Facebook and Instagram to drive awareness and advocacy, and the harnessing of data and analytics as all being key to online retailers.
The launch coincides with an Australia Post report that found the number of purchases online has grown by more than 20 per cent for the year, with online shopping now making up 9 per cent share of traditional retail spend in 2018.
Australia Post general manager of enterprise Andrew Chamberlain said Koh and Kogan.com exemplified e-commerce-savvy businesses that embraced innovation to enhance online experience, ultimately driving customer loyalty and sales.
“In considering potential winners of the Australia Post ORIAS People’s Choice Award, one of the key things consumers look at is a personalised experience that supports ease of purchase – an area in which both Koh and Kogan.com are excelling,” Mr Chamberlain said.
Registrations for the Australia Post ORIAS People’s Choice Award for 2019 are open now, with applications to close 31 May. Voting takes place from 1 May-31 May.