Australian logistics survey highlights e-commerce service gaps

The widening gap between customer demand for improved online shipping experiences and retailer capabilities is leaving businesses vulnerable, according to new research from Australian shipping and fulfilment software platform Temando, as the arrival of e-commerce giant Amazon later this year promises to revolutionise the online market on a never-before-seen scale.
Temando’s annual State of Shipping in Commerce survey found that while 65 per cent of Australian consumers stated that they abandoned their cart due to the high cost of shipping, 61 per cent of Australian retailers struggle to manage the increasing cost of carrier rates. What’s more, 57 per cent of shoppers will buy from competing stores when retailers fail to provide relevant shipping options to suit their needs.
Carl Hartmann, Co-founder and CEO, Temando, said as the competition is heating up between local retailers and the coming of Amazon, there’s a golden opportunity to drive innovation faster on local shores.
“Smart retailers have their foot on the gas and are using the arrival as a huge opportunity to streamline their processes, optimise logistics and embrace digital transformation to put them in a prime position to not only survive, but thrive,” said Carl.
“Shipping is sometimes overlooked in favour of marketing and packaging, but as we enter a post-Uber age, it isn’t just a ‘back end’ issue anymore, but a front-and-centre priority to enrich customer experience and fuel growth.”
The survey identified three major areas for improvement in the local delivery offering – shipping experience, smart technology and order platforms.
In-demand shipping options that cater to convenience such as ‘specified time slot’, ‘same-day’, ‘weekend or afterhours’ and ‘hyperlocal’ was found to be offered by less than a quarter of retailers currently, and a negative shipping experience would put off 59 per cent of customers from shopping with that retailer again. Eighty per cent of the 1,279 shoppers surveyed noted that they would purchase again if they enjoyed the shipping experience, and free shopping would entice 68 per cent of shoppers to do more online shopping.
“We’ve found Australian shoppers react more strongly to shipping experiences compared to American shoppers,” said Hartmann. “New alternatives to standard and express delivery has been largely unmet this year compared to 2016 which opens up enormous opportunity for retailers to re-imagine their retail operations and create meaningful, cost-effective customer experiences.”
Over half of the 258 retailers surveyed acknowledged that technology platform compatibility is an issue, with 58 per cent finding integrating carrier services into their systems a key challenge. While shipping and fulfilment automation was recognised as a challenge by almost half of those retailers surveyed, only 29 per cent are planning to invest on improving these issues in the next 12 months.
When it comes to international shipping, 72 per cent of retailers grapple with the accuracy of costs, with only 21 per cent having the ability to charge all applicable duties and taxes for international customers in the cart.
“Using smart technology to streamline processes will help to remove some of the key fulfilment challenges retailers are facing now and in the future. How businesses evolve with this changing landscape will influence how far their business grows, and how fast they scale,” said Hartmann.
One in four shoppers are using their mobile devices as their primary shopping tool, with Millennials the highest adopters, at 48 per cent, while Gen Z sits at 29 per cent. Access to a wide choice physical and online stores has given rise to two behaviours: webrooming (looking online, buying in physical store) and showrooming (looking in a physical store, buying online) which is engaged by 65 per cent and 51 per cent of shoppers, respectively.
“The race for customers is not going to subside and with the imminent arrival of Amazon, Australian businesses should be embracing the challenge, said Hartmann. “With future growth opportunities existing in the ability to cross borders, its vital that delivery networks and retail operations work seamlessly together to satisfy the customer while managing the bottom line.”