How improving your logistics strategy will increase customer loyalty?

Sustainability of your business depends upon regular customer acquisition but its profitability gets decided with a loyal customer base. For ecommerce professionals and retailers, it is not an unknown fact that they need to attract their older customers and have them purchase time and again.

Do you know that attracting new customers is five times costlier than keeping the existing ones?

So, the question business owners ask themselves is “what strategies can help me encourage my loyal customer base to keep buying from me? While there are many strategies like cross-selling, upselling, sending out personalized recommendations based on the data analysis of your customer’s shopping patterns, none of that will matter if you don’t have the desired or advertised product in stock!

Yeah, it’s a no brainer, we know, but how many times have you yourself as a customer seen the “Currently Out of Stock” notification against your favorite product?

“Countless Times” is our bet. While talking about customer loyalty, you cannot just ignore the importance of logistics. The problem is, this impactful point often gets underplayed due to the attention given to product features, customer service, and after-sale communication. 

55% of customers with bad shopping experience confessed they will never order from that site again. – FurstPerson

That’s a huge loss for any business owner! Some retail business owners will differ on the subject, but even they will agree that logistics, if not critical, is a major force behind the customer retention rate.

The solution to such a situation is simple; manage your logistics strategy and increase customer loyalty. In this blog, we will be covering a few tips with you which will help you do the same.

1. Managing the inventory

Inventory management and choosing the best supplier are the most important steps for your supply chain management. Having the items you are advertising on your website/app and having a stock of the same in your warehouse will help you not disappoint your customers. It doesn’t matter if you outsource your inventory management or do it in-house, it must be controlled and managed by you.

What is the best way to do that?

Having a track management system will allow you to control your supply chain management. Mastering the art of supply and demand with regular stock-taking. Have a tool in place that can forecast and calculate the stocks.

These key points help you get inventory accuracy. Also, you can accomplish the task with various inventory management software for retailers, just choose the best one for your business.

2. Your return policy

Once your customers receive their product and they aren’t satisfied, you can be sure of one thing; they will be returning to you – “with ease”.

Yes, we know this is not an ideal business scenario, but it also provides a great opportunity for increasing customer experience and loyalty.

Your shoppers shop again if they have a positive return experience. This makes your job as a retail business owner to provide a better and seamless return experience to your shoppers.

This experience actually starts even before they shop with you. Yes, you read it correctly. You can indulge your customers or prospects with an easy to find and clearly mentioned returns policy.

For making sure that your business survives the harsh competition, you must be flexible with your returns. Making the return experience convenient for your shoppers is important.

Take Amazon for example. They clearly define everything we discussed right before the customer places their order. Even after the purchase is made, there are clear instructions for the return policy and procedures.

Also, do not pressurize your shoppers with a shorter return window. The industry standard is of 30 days post-purchase.

79% of customers appreciate it when ecommerce sites cover the return charges. – ShipBob

Simplify your returns process by sending pre-filled return labels and you can even go for covering the return charges. This move, although costly for you, allows you to have a better chance of retaining the customers. It also helps the customers know that you care for them. 

3. Having best-shipping partners and logistic tools

Your customers don’t know if you have an in-house product delivery system or you are outsourcing it. Frankly, they can care less about it. They went to your site and made a purchase, that is enough. Now, all they want is to see the value for money products get delivered to them at a quick pace.

Any mishaps or delays at this stage will cancel out any good faith your shoppers had in you. Customers do not bifurcate their shopping experience. For them to order the product and receiving it complete their entire shopping experience. This clearly indicates that retailers must prevent choosing a bad shipping partner. 

What must be factored-in while deciding the shipping partner?

The costing!

However, it is not the only important factor. You must always check for

• Successful delivery rate
• Delay rate
• Complimentary insurance
• Customer support

Yes, we know what you are thinking about. Why would any business share such information upfront? After all, they will show the rosy picture while trying to become your shipping partner. That is 100% correct. Businesses won’t show their shortcomings and you will have to do individual research for finding the above-mentioned aspects.

Many tools have been developed for simplifying the shipping process of the e-commerce industry. What you have to look for is shipping modules or seek offers from various carriers. You must also look for tools that enable your business to centralize the shipments.

You can always consider using a retail solution with an integrated shipping module. Such a solution allows you to review the shipping services/cost and save time done on researching individual couriers.

4. Offer more options to the customers

Transparency is the best policy when it comes to retaining your shoppers and increase customer loyalty. When combined with the flexibility, it will help you gain the trust of your customers and also show them that you do care!

Which brings us to our next point. Modern customers are self-centered and want the retailers to offer better options that match their convenience, needs, and lifestyle. These characteristics are of importance to retailers when it comes to logistics and delivery of the products.

Shoppers often abandon their cart and the reason can be price, duration of delivery of the shipping charges (if applicable). Most often, the reason is the delivery time or approach which does not match with their convenience. Allowing the customers with the option to pick up their own order or give them priority delivery.

Around 56% of consumers are aware that the in-store pick-up option for online purchases is provided by retailers. – SmartInsights

In the same survey, it was revealed that 71% of these consumers have tried it and 67% were really satisfied with the experience. Now when you consider this same statistic in the post-Covid-19 scenario, you might feel that these statistics do not stand true now.

With all the safety regulations applied by respective governments, the shopping and return procedures have gone some changes.

5. Show the shipping prices and terms of conditions

The amount of trust your customers have in your business shapes their loyalty. – Rory Sutherland, VC of Ogilvy Group.

If you practice transparency in key areas such as price and shipping, you will surely earn the loyalty of your customers. When you are aware that there will be possible delays in delivering the order to your customers, you must be upfront with them.

If there will be a delay in delivering their order or the item is being imported from somewhere else and there are other charges associated with the same, let them know about:

• possible delays such as bank holidays
• expected dates for delivery
• associated costs
• return conditions

Keep your customers informed regarding every development and prove them with realistic expectations so that you do not end up giving them any unwelcome surprises. Also, make sure that you are straightforward while giving them details and don’t beat around the bushes.

That said as much as being honest in your approach is an absolute necessity, it ultimately won’t win the hearts of your customers if what you’re showing them is too restrictive.

Conclusion: Plan everything out with a digital process and tools

“Returns are so misunderstood that retailers have accepted them as the cost of doing business,” says Peter Sobotta, CEO of ReturnLogic.

Well, you must know this, low returns and maximum profitability won’t always work in sync. Don’t reject the thought of accepting returns and head for a bottom-line driven approach. Here are a few steps to help you do the same.

Step 1.

Fix all the operational problems, such as logistics and enforcing the return policies. Look for questions like “where’s my refund” or “where’s my exchange” that your customers generally raise post making their purchase.

Step 2.

This is where you will need the help of a big data analysis tool for coordinating your return rates with net sales. Create a return profile for your most and least profitable customers.

You can leverage tools like Inventory-management systems (IMS) and order management systems (OMS). These tools specialize in managing

• inventory levels and locations
• order fulfillment like priority, pick and pack, postage, and tracking
• stock with sales across channels

Step 3.

You can also merge or synchronize Warehouse-management systems (WMS) with IMS and OMS. When online retailers opt for third-party logistics (3PL), it enables them to outsource the fulfillment requirements.

Let’s go over the points which we have discussed until now. For improving your logistics strategy and increasing customer loyalty, you must give them better service, have a transparent returns policy, have the right tools, choose the right shipping partner, and provide various delivery options.

All these factors will benefit you in improving the logistics strategy and increasing customer loyalty. When we talk about providing better logistics and increasing your customer loyalty you must consider

• How big data analysis will come into play?
• How can an AI-based assistant be integrated into your support architecture?
• How can you personalize the offers of your customers based on their shopping patterns?
• How can you integrate your inventory management system with your website and run it alongside big data analysis tools?

Rapidops has been helping online retailers develop an architecture that allows them to merge all these technologies and create a database that is easily accessible. From custom web development to creating smartphone applications and to synchronizing it all with the inventory management system, Rapidops has made life easier for the online retailers and ecommerce giants in the US.

If you want to know more about managing the inventory and stock management with the help of modern technologies, simply talk with us.