2022.12.15
E-commerce and new consumer demands: how is transport adapting?
The delivery of goods must be increasingly precise and include additional services to better satisfy customers.
In recent years, the weight of e-commerce has continued to grow. This expansion, amplified by the pandemic and the lockdowns that led many citizens to place their first online order or to make more use of this mode of consumption, has prompted players in the sector to rethink their methods.
How do we manage the constantly increasing quantities of orders and parcels? How do we envision the delivery of increasingly heavy or cumbersome objects? And how do we meet the new expectations of consumers, who have been conditioned by the market leaders in customer relations to expect high-quality service? Here, we update you on the latest developments in the sector, at the dawn of 2022.
How do you get from start-up to marketplace?
Clothing, furniture, decor, food: drivers of the e-commerce boom
As you know, there are two major types of e-commerce: the online sale of services, such as train tickets, concerts or next-generation banks and insurance, and the online sale of goods. The latter, which we will focus on here, has experienced robust growth since the early 2010s. Because companies have grasped the value of having a website where they sell their products with the option of having them delivered directly to their customers.
Growing uses that vary by country
In some countries, consumers were immediately won over by the concept… That was the case in England and Germany, where mail order sales via catalogs were historically very common. In England, e-commerce currently accounts for no less than 27% of total retail volume.
Other places in the world also have high figures. It is around 14% in the United States and in France, a country in which fears about the security of credit card payments took longer to dissipate than in neighboring European countries.
In all, according to FEVAD (France’s e-commerce and distance selling federation), internet sales reached €129.1 billion in 2021 in France, an increase of 15.1% in a span of 12 months. This acceleration is explained by the pandemic, with unprecedented peaks in business during the two lockdowns. “Between those two periods, sales remained at a high level,” the Federation also noted. At Christmas, the increase even reached 24%.
A specialized delivery market to meet diversified demand
How far will this trend go? According to our experts, several sectors should stand out in the coming years. The current market is mainly dominated by clothing, consumer products, furniture and decor. But sporting goods, DIY, household appliances and gardening supplies are also among the categories expected to be the most dynamic.
This diversity is quite unprecedented. It will require changes from logistics and transport companies. Indeed, most of these goods are bulky and heavy, up to a few dozen pounds ‒ quite different from the objects such as cultural goods and textiles that historically allowed e-commerce to explode.
Among the players in the shipping market, the first tier is occupied by legacy providers: national postal services which hog 3/4 of the market by handling small parcels that move through highly mechanized warehouses adapted to this type of flow. In the business, this is called “small parcel delivery”, which mainly concerns parcels with an average weight of 6 to 11 pounds. Next comes the fast-growing segment of parcel shops, such as Relais Colis and Mondial Relay.
Meanwhile, integrators are international carriers that manage road or air freight from start to finish with their own resources. They intervene directly at the customs stage or operate as freight forwarders, generally handling packages under 65 pounds. DHL, UPS and FedEx are notable examples.
Businesses can differentiate themselves by focusing on niche markets. Some specialize in non-standard parcels (works of art, items weighing more than 220 pounds, etc.) while others, like GEODIS’s Distribution & Express business, focus on non-sortable items, i.e. parcels bigger than the postal standard and weighing 45 to 150 pounds, a market with a promising future.
Although everyone has their own specialty, everyone will have to adapt to new consumer demands to maintain the status quo or to grow.
What are the new consumer demands relating to shipping and delivery?
The types of parcel being sent are not the only changes we are seeing in e-commerce. The expectations of end customers in the B-to-C setting have also evolved.
More precision and impeccable quality
Their first demand is for precision, as reflected in the delivery times and windows proposed by carriers and in the ability to track a package in real time.
The quality of service is also essential. Good shipping is fast shipping, within the stated turnaround time. Express mode is often preferred: according to a study by the magazine E-commerce Mag, 82% of respondents believe that speed is an essential criterion. It’s the “everything, right away” trend. On average, Europeans report they are willing to wait just 3.1 days, and no more than 4.4 days. More than 45% of French people expect to have the ability to receive their parcel the same day if they order before noon.
Increasingly personalized services
You also have to find the perfect balance between digital and human. While recipients can now manage their shipments using their smartphone, the ability to contact the driver or an efficient customer service department is a real plus. This makes it possible to reassure customers, assist them if there is a problem, and help them ensure their order is delivered by giving an oral description of the delivery address, door code, etc.
Quality of service is also determined by factors like the option to schedule delivery appointments on the merchant’s website, honoring turnaround time commitments and courteous drivers. 31% of French people say that a previous negative experience with a carrier has prompted them to abandon a purchase.
In response to changing expectations, carriers are broadly diversifying their range of activities and offers.
How carriers are diversifying their offer
Tailor-made offers
Today, carriers must provide on-demand or “à la carte” solutions. When it comes to delivery windows, we now talk in terms of half-day slots and some specialists are even looking at a third slot with an evening option (6 p.m. to 9 p.m., for example) or weekend option.
In the realm of “track and trace”, there are several innovations to more closely track one’s package in real time. Tracking is more and more detailed. On the morning of an express delivery, a parcel’s recipient can get a text message that indicates a shorter delivery window of just two hours. Since January, GEODIS text messages have offered a third tier of information for express deliveries with an additional message sent one hour before indicating the package’s ETA (estimated time of arrival). The customer can then see the driver’s geo-positioning on a map with real-time updates.
While this is clearly a boon to the end customer, the carrier and the company that contracted with it are also winners. The service prevents the recipient from being absent and reduces the rate of unsuccessful deliveries, which create dissatisfaction all around. The recipient absentee rate drops from 6% to less than 2% thanks to these tools, which are constantly evolving.
As for the quality of service, how can you be sure that the interaction was positive? At GEODIS, recipients now receive an email after their delivery, which contains a link to a customer satisfaction survey. This allows you to evaluate the interaction and verify that everything went as planned. The response rate is close to 30%, indicating recipients’ interest in providing feedback about their delivery experience.
Delivery beyond the doorstep and extended take-back guarantee
This survey is all the more important as delivery people are taking on more and more tasks. The package is no longer just moved from the truck to the front door. It may be carried upstairs, or even installed in the room of use (a bed in a bedroom, a refrigerator in the kitchen, etc.). Taking back packaging, picking up old equipment or managing parcel returns also raise issues. In France, the AGEC Act (a law to prevent waste and promote the circular economy) has required any merchant selling household appliances to take back old appliances from its customers. This take-back guarantee was recently extended to other categories such as furniture, which, it should be remembered, is one of the growing e-commerce sectors.
Parcel returns must also be taken into account, in terms of the volume and quantity of goods. By relying on a company that specializes in e-commerce transport and logistics, businesses and retailers can benefit from a solution that ensures they meet their regulatory obligations.
Also read: Build customer loyalty with an effective return policy
As we have seen, the emergence and the ensuing explosion of e-commerce have turned the world of logistics and transport upside down. Consumers want increasingly precise and scheduled deliveries. They want to be able to choose between different options and have their packages taken upstairs, right into their home to the room of their choice (sometimes with the removal of the property being replaced) by the most professional and friendly carriers possible who, ideally, have eco-friendly delivery fleets.
While this obviously generates new challenges, such as managing returns and collecting old objects, offering an efficient delivery solution from A to Z is not mission impossible. You just need to be well informed… and to partner with the right service providers!