Is super-fast delivery the keystone of e-commerce brands?
If a brand can’t gain momentum, what can it do to stand out from the competition? Twilio’s Sam Richardson takes a look as part of The Drum’s Evolution of E-commerce Deep Dive.
The global pandemic has seen on-demand grocery delivery go from a fringe concept to a common service to a crowded space in an incredibly short period of time. Many of us, confined to our homes over the past couple of years, have explored and relied on online shopping more than ever. As such, retailers have had a unique opportunity to learn valuable lessons about engaging customers based on the rapid growth of fast-paced, home-based commerce.
The rise of home delivery companies like Gorillas and Getir has been rapid, with the average online sales value for UK groceries surging at the start of the pandemic. These companies have not only witnessed, but also fostered, such a shift in customer expectations for availability and speed of delivery – and there’s a lot to explore here about what the growth of these retailers says about the broader role of delivery in the customer experience.
Even though these fast delivery companies now face tougher business conditions, their early success has encouraged a conversation about what fast delivery says about customer engagement versus other priorities. In fact, a Whistl study found that 45% of shoppers would change their mind about a purchase because of poor delivery. It is clear that speed is an area of paramount importance for businesses, not only to ensure that a sale takes place, but also to maintain the respect and loyalty of customers, and therefore make their mark among the ever-growing peloton.
So what does the advent of “ultra-fast” delivery tell us about the wider business world when it comes to customer engagement, and what other considerations do businesses need to take into account? Do customers really care about speed, or is there more to it?
A ‘race to the bottom’ isn’t necessarily the only way to win
Much of fast e-commerce is based on the assumption that online shoppers want to receive their orders as quickly as possible – and while that’s partly true, there’s more to consider here. In the absence of a physical store, these delivery changes have the potential to act as a way to reshape the concept of customer engagement.
It is understandable why speed offers them a point of differentiation from traditional supermarkets, with consumers being seduced by the ultra-fast delivery speed of 10 or 15 minutes promised by these new brands. But if it’s fast and small-scale, it can also be hyper-local, or offer a more personal touch. Consumers increasingly seek not only immediate experiences, but also innovative, hyper-personalized and flexible experiences. In fact, a recent study by Twilio highlighted the fact that speed is just one of the pillars of good customer engagement that people need. For example, while 25% of respondents said speed was the most important thing to them when contacting a business, an equally significant 25% ranked emotion (e.g. getting a friendly and human response) higher, while 24% said expertise (e.g. talking to someone who fully understands the processes and products of the company they represent) tops the list , even if it comes at the expense of speed.
So, to hold up and stand the test of time, merchants not only need to think about fast delivery but also proactive, reliable, and personalized communication throughout the customer journey. As such, racing to be first and scale fastest isn’t the only way to win, especially since hyperscaling presents its own business challenges when it comes to long-term customer retention. For example, our research has shown that friendly service is by far the biggest driver of customers returning to a brand (42%).
Personalization is key for long-term customer engagement
Quick trade businesses are operationally limited to a smaller selection of items than a standard grocery store and therefore need to focus on what customers are really looking for so as not to waste space by stocking the bad products. The same thinking needs to be applied to how organizations interact with customers more broadly, based on an understanding of what they really want from you, whether it’s a certain channel, a tone of voice or something.
This is where first-party data comes into its own, not only helping to personalize the customer experience, but also benefiting the business by allowing them to learn from their user base. Fast-commerce businesses are increasingly using data to adjust the items on sale in each area, allowing them to change the assortment to target a very specific set of customers. This tactic is likely to increase as retailers increasingly break away from a one-size-fits-all approach and become more integrated into the local community.
First-party data provides retailers with the tools to use personalization, which is critical to building lasting and impactful customer relationships. Businesses can explore the use of digital touchpoints to better understand their customer base and thus target their communications more effectively. Many companies use a multi-channel or omni-channel strategy, but they also need to consider consumer channel preferences and adapt their communication approach as needed. By using digital touchpoints in this way, retailers can tailor their customer offerings much more closely to their needs. This will ultimately improve their services in a way that truly serves their audience, increasing their chances of those customers coming back for more.
Think of “trends” as tools
Ultimately, retailers need to be aware that the customer experience is the lens through which the consumer perceives the brand. They need to consider that the rise of rapid commerce may not be a trend to react to, but rather a chance to reassess their “rules of engagement” with their customer base. For those whose business model relies on fast delivery of orders to the customer, superfast delivery can be a competitive tool. For others, an enhanced or differentiated delivery service is better suited.
Knowing what to offer comes down to knowing the customer. But what is increasingly clear is that genuine and thoughtful engagement, delivered holistically, is more valuable than focusing on one element of the customer experience above all else. Brilliant customer experience comes from a brand mastering its understanding of the customer and their relationship – not just because of speed.
Sam Richardson is a Principal Visionary Consultant at Twilio. For more on the evolution of e-commerce, check out The Drum’s latest Deep Dive.