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Eloise Freygang | 30 September 2016

Retailers – Do not promise what you cannot deliver

Retailers – Do not promise what you cannot deliver

People often make promises at the drop of a hat, with no real intention of keeping them. “Let’s do lunch,” “I’ll call you later,” and “I’ll be there in five minutes” are all examples of throwaway promises that are frequently made but seldom kept.

A promise made is a …

But how does this relate to your business? With increased competition to offer lower prices and better service, retailers are now making wild promises: same day delivery and returns, ever faster and better service. Implementing these changes can, however, skyrocket operating costs, especially if you are a small business. When you break a promise, no matter how small it may seem to you, you risk damaging your relationship with the customer - and your reputation [click to Tweet]. Think about it: when somebody breaks a promise to you, doesn’t that make you feel angry and cheated? You can’t help wondering whether you will ever trust that person. The same goes for your business. To lure more customers, retailers are often making wild promises about their speed of delivery. Some of these promises, though, they simply cannot keep, leaving customers frustrated when they fail to deliver. Even if you have provided an excellent customer experience, and the customer was very happy with price and product, the last mile – the delivery process -is out of the control of most retailers. The problem for many smaller retailers is that giants like Amazon or Tesco have set the bar very high. They know delivery; they have a clear idea what people want, and they nail it. Their huge infrastructure and revenue base enable them to provide market-leading delivery services and prices. On the other hand, smaller online retailers have to rely on mailing or courier services. When third parties become involved, there is much room for complications and delays. During the last holiday season, almost a third of UK shoppers experienced problems with the shipment of the items they had ordered online. The high frequency of delivery snags - even among major retailers – led British newspaper The Guardian to wonder whether 2015 would be the year people would abandon online shopping, and go back to the high street. Delivery issues are made worse for customers by the sheer amount of time wasted, either waiting for parcels that don't arrive, or waiting in call queues trying to chase up and reroute deliveries.

Simple ideas can be hard to execute

Many retailers are offering Click & Collect services in an attempt to reduce costs, improve their service and offer greater convenience to customers. But even this strategy is not foolproof. What if you break your good service promise of convenience? Some retailers make this mistake by having their Click & Collect pick-up desk too far into their stores. Although this strategy is designed to increase spur-of-the-moment buys, customers are often annoyed at having to walk for a long time just to pick up their order. The levels of customer dissatisfaction increase even further if, when they finally reach the counter, there are long waiting lines.

Does it get any easier?

As sales grow, the volume of returns grows too. The ratio of returns is even higher when it comes to heavily discounted items, as many customers buy in a rush attracted by the low price and then return all the bargains that didn’t quite match their expectations. By the time retailers add in the costs of product returns, including repackaging, handling, storage and/or re-distribution, any profit they had made has already been consumed. This issue is particularly important for fashion retailers, who can easily experience 40 to 50% returns rates. They need to recycle goods quickly and efficiently, to avoid being left with a warehouse full of last season’s returned stock.

Setting realistic targets

In conclusion, do not make promises to customers that you cannot deliver. For example, it is better to say 3-5 working days delivery and be 100% accurate, than claim overnight shipment and let many customers down. It is much smarter to be accountable, thus getting a customer for the long haul, than making wild promises for a quick sale. Get people’s trust, and maintain it. With respect to returns, shoppers expect to be able to return goods. Retailers must help themselves by developing better quality controls, improving the accuracy of product information and imagery on their websites and providing consistent sizing in apparel. If not, the goods will just keep coming back.   Does your system support you to help you keep the promises you make to your customers? Contact us today and let’s discuss how we can help you keep your promises and grow your business.