Stock availability issues and unsuitable delivery times have resulted in retailers losing nearly a fifth of their customers to rivals over the Christmas shopping period, according to the third annual JDA/Centiro Christmas Customer Pulse report (conducted online by YouGov).
As many as 12 percent of UK adults online said they used an alternative retailer because their preferred retailer did not have items available online. In addition, seven percent stated they had shopped with an alternative retailer because delivery times failed to meet their requirements.
“Christmas shoppers have become increasingly savvy, as they look to use the channels that best suit their budget and lifestyle. This means retailers cannot afford to stand still if they are to meet customers’ growing online shopping expectations,” said Jason Shorrock, Vice President of retail strategy, EMEA at JDA. “Customers expect products to be available 24-seven and for retailers to offer convenient delivery and collection options.
“This is the added level of complexity that retailers must be able to cope with. Ultimately, a smarter and more effective supply chain shouldn’t just be for Christmas. Without one, retailers risk damaging customer loyalty and their profits throughout the year.”
Click & Collect issues
Overall the research revealed a slight decrease in the number of delivery and Click & Collect issues encountered by UK online Christmas shoppers as 32 percent of online Christmas shoppers stated they had experienced issues with their online purchases (a decrease from 33 percent the previous year).
Of those shoppers that encountered an issue, 31 percent experienced late deliveries, 23 percent never actually received the items that they ordered and 22 percent received damaged items. Nearly a third of Christmas Click & Collect shoppers encountered issues with their online orders, which is a decrease from 36 percent the previous year.
From the issues listed, long waiting times due to a lack of in-store staff, and staff being unable to locate or taking a long time to locate items in-store, were cited as the primary reasons that had a negative impact on the Christmas Click & Collect shopping experience.
While such issues remain, it isn’t surprising that 78 percent of UK adults online said they would switch to an alternative retailer when shopping online, due to a poor experience with ordering an item online at Christmas. Specifically, 76 percent would switch to an alternative retailer because of a poor home delivery experience, 66 percent due to a poor Click & Collect experience, 74 percent as a result of a poor returns experience, and 78 percent due to poor issue resolution.
“While it is encouraging to see a slight reduction in Christmas online delivery and Click & Collect issues, retailers shouldn’t be cracking open the champagne just yet. These findings must be tempered by the fact that Christmas online sales volumes continue to grow,” added Jason Shorrock. “While many retailers focused on providing dedicated areas for Click & Collect this Christmas, long waiting times and staff being unable to locate items in-store continue to tarnish the customer experience.
“Even more worrying is the significant number of shoppers who either didn’t receive their online goods or found they were damaged. This is unacceptable at any time, but especially at Christmas. There will be little festive cheer for retailers next year if poor online customer experiences drive shoppers to the competition.”
Cost and convenience
The research highlighted that 39 percent of online Christmas shoppers used Click & Collect Services, compared to 41 percent (2015) and 39 percent (2014) the previous two years. However, of those respondents that used Click & Collect services at Christmas, one in five said they would use Click & Collect more next Christmas.
Interestingly, while Click & Collect shoppers stated that avoiding delivery charges (53 percent) was their reason for using the service, it was closely followed by it being more convenient than home delivery (50 percent). This three percent difference compares to seven percent when the same question was asked last year, indicating that convenience is becoming just as important as cost to online shoppers.
This year, many retailers again set Christmas ordering deadlines to try to ensure items were received in time; this shaped shopping behaviour in the lead up to Christmas. More than a of Christmas online shoppers ordered items online earlier than planned, while 21 percent shopped in store, instead of online; compared to 19 percent in 2015.
Niklas Hedin, CEO of Centiro, commented: “Christmas delivery deadlines have become a crucial necessity for many retailers as they look to keep order promises. However, as many online shoppers increasingly come to expect same- and next-day deliveries as the norm, the prospect of customer loyalty for promises kept brings with it significant potential gains.
“Those retailers that can effectively scale their delivery networks to offer flexible delivery options while at the same time guarantee order promises will be the winners in 2017.”