Pulse check for the post and parcel sector

Post & Parcel spoke to Ryan Hunter, Chief Sales Officer for DHL eCommerce, to understand more about DHL’s latest  Online Shopper Trends report and find out why retailers should prominently display their delivery partners this peak.

Why is the Shopper Trend Report important for DHL?

 For our Online Shopper Trends Report, we surveyed 12,000 online shoppers across 24 of the most significant e-commerce markets worldwide. We wanted to have a deeper understanding of consumer expectations not only from online retailers but also their partners. We consider logistics and parcel delivery to be integral parts of the customer journey, and the findings of our report support that view.

 In the report, we found that a business may have put a lot of time, effort, and resources into creating an exceptional online store, complete with attractive inventory, detailed descriptions, compelling images, and positive reviews. But, if they fail to meet customer expectations regarding delivery and returns, there is a pretty good chance that the shopper will abandon their purchase. In fact, 48% of global online shoppers frequently abandon their shopping carts when their preferred delivery option isn’t available. This statistic clearly shows the vital role that logistics and delivery partners play in turning website browsers into buyers.

In your opinion what were the most surprising results of the survey and why?

 I think it’s that most people underestimate how important delivery and returns are to online shoppers; you would think it’s the user experience, or even the payment options. The fact that shoppers are even willing to abandon their shopping carts if their preferred delivery option is not available or if the delivery costs are too high, is something that most e-tailers possibly don’t even consider.

That said, this situation also presents a fantastic opportunity for online retailers. By offering the right delivery options, you have the potential to convert those browsers into buyers.

Most operators are already focusing on the upcoming peak season – how can the insights from your research help them prepare?

 It all revolves around the impact of the delivery provider and delivery options on the customer journey. These factors can play a truly decisive role – for example, 65% of online shoppers consider it important to know the delivery provider, and nearly half abandon their cart if their preferred delivery option is unavailable.

Based on that, we’d suggest that e-tailers not only provide a range of delivery options but also prominently display the delivery partner.

Another nugget is that 76% of customers prefer to track deliveries within the retailer’s app. To meet this preference, it is important for retailers to integrate all their shopping platforms with the chosen delivery provider, making parcel tracking extremely convenient for shoppers.

Then there are the more obvious outcomes – like optimizing the shopping experience for the devices customers use most. In this case it’s smartphones (preferred by 57% of shoppers), so merchants should make sure they offer truly mobile-friendly design and functionality.

We also found that social commerce is really gaining popularity, with 67% of online shoppers using social media for shopping inspiration and making direct purchases on the platform. Targeted campaigns on these platforms can help reach new customers.

As you can see, these insights provide valuable guidance for improving the conversion rate not only during the peak season but also in the long run.

How can this research benefit the post and parcel sector in general?

For the post and parcel sector, our report serves as a pulse check. Divided into five chapters – “e-commerce trends,” “online purchase trends,” “delivery and returns,” “cross-border” and “beyond the basket” – we provide insights into the sentiment, satisfaction, and trends within the online shopping and delivery experience across 24 of the most important e-commerce markets. The fifth chapter, “beyond the basket,” along with 18 country guides that focus on specific markets, are scheduled for release on October 22. In this final chapter, we will delve into three personas to gain a better understanding of the factors influencing social, sustainable, and cross-border shoppers; all providing great insights not just for e-tailers but for delivery and postal providers too. Our goal is not only to capture current trends but also to identify areas for improvement and enhance the overall customer experience, for the benefit of the entire industry.

By this time next year do you envisage the Out of Home delivery figures to have increased or plateaued? You quoted that the market is set to grow by 2.5 billion by 2032 yet globally home delivery is still overwhelmingly the preferred choice – is it likely for the US to make that shift?

While I don’t have a crystal ball, I can share that we undoubtedly see a growing trend in out-of-home delivery, especially in Europe. We’re confident enough in the trend increasing that we continue to make strategic investments in our OOH network (which is already over 140, 000 strong in Europe). One recent example, in Italy, is our joint venture with Poste Italiane called “Locker Italia”, where we’re creating a network of 10,000 parcel lockers across that country.

When it comes to the US market, an interesting observation from our report is that only 5% of US respondents prefer direct delivery to parcel lockers or shops. However, when it comes to returns, the numbers are different. 47% of respondents prefer to have their items returned via parcel lockers or service points, such as convenience stores. This indicates a clear demand for these options as well.

In regards to the rise in social commerce – how can the sector adapt/ cater for this new trend? 

 An important aspect, although it may seem quite obvious, is to meet your customers where they are. Just like any other buyers, online shoppers prioritize convenience and a seamless, consistent customer journey. This includes engaging with customers on the platforms they actively use. Of course, this approach should align with your brand identity, but it’s essential to consider reaching potential customers through various channels.

 Say you are selling screws and bolts online and discover that a significant portion of your target audience is active on TikTok, why not consider reaching out to them through this platform? Embracing new selling funnels and exploring new distribution channels is crucial. By doing so, you can stay ahead of the competition and ensure that you are capturing the attention of potential customers. And failing to do so means that you might lose business to competitors who are more proactive in exploring new avenues.

The rate of customer satisfaction for respondent’s most recent purchase seemed fairly high to me – at a time when many businesses are trying to save money, is this an area they still need to invest in and if so why?

 Customer satisfaction is the foundation of our business, and I cannot stress enough the importance of consistently delivering on this aspect. Building trust and satisfaction with customers requires a lot of time and effort, but it can be easily undermined in a matter of seconds. One key finding from our report is that logistics and delivery play a critical role in the value chain and customer journey in e-commerce. Although multiple parties contribute to the overall process of a successful purchase, customers perceive it as one integrated experience. This becomes even more apparent when facing fierce competition in the market.

Let me give an example: Imagine three online shops sell the same grey shirt at similar prices. In one of these shops, the customer has a dreadful delivery experience characterized by delays, insufficient updates on shipment status, and ultimately receiving the parcel drenched in rain. Where do you think this customer would choose to purchase their next shirt from?

That doesn’t even consider the potential negative reviews, affecting other prospective customers. It is crucial to prioritize the delivery experience and ensure seamless and reliable service to keep customers loyal and create positive word-of-mouth.

How can delivery companies manage customer’s continued desire for free shipping? Does having a good customer experience enough to convince  people to pay more for shipping?

Well, it really depends on what you’re selling and how much it’s worth. But actually, there’s no such thing as totally free shipping or returns.

According to our findings, 41% of surveyed shoppers expressed that they would abandon their cart if the delivery cost is too high, and 67% believe that free delivery would enhance their online shopping experience. Also, when it comes to returns, 41% of shoppers said that they only purchase from retailers offering free returns.

With these insights in mind, I’d suggest that retailers carefully evaluate delivery and returns costs as part of their overall calculations. It is crucial to provide a range of delivery options, including both free and paid choices, as well as fast delivery options, to accommodate the diverse preferences of consumers. By offering a variety of delivery options and transparently communicating associated costs, retailers can meet the expectations of cost-sensitive shoppers while also giving flexibility for those willing to pay for premium services. It’s about striking a balance between affordability and convenience.

Is speed still as important for environmentally conscious shippers or is the trend for next day shipping fading?

When it comes to speed, it’s kind of like delivery costs – it really depends on the value of the goods. Our survey found that 47% of customers worldwide expect faster delivery for higher-value items compared to lower-value ones. Interestingly, the significance of delivery speed also varies depending on whether it’s a domestic or cross-border purchase. But here’s something even more intriguing: 60% of online shoppers surveyed globally actually prioritize reliability and transparency over speed. So, it’s not just about being lightning fast, but also about being dependable and keeping customers informed. But hey, let’s not forget that sustainability is not just about speed when it comes to deliveries. More eco-friendly options do come at a certain cost. It’s actually pretty encouraging to see in our report that over half of the global consumers we surveyed recognize the importance of sustainability when shopping online. However, here’s the catch – only 25% of them are actually willing to pay extra for greener delivery options. This shows that we need to work together and find solutions in this area. Right now, sustainable fuels and alternative transportation methods are still pricier compared to the traditional options. But I’m optimistic that things will change over time.

Why do you think customers desire end to end delivery tracking? Do you see it as a deal- breaker for customers?

Customers want end-to-end delivery tracking because it provides transparency, reassurance, and helps them plan their schedules. While not a deal-breaker for all customers, it has become an important feature in the e-commerce industry. It enhances the overall customer experience and can be a deciding factor when choosing between online retailers.

If you compare this year’s results to 2023 – what has been the biggest shift?

We’ve definitely observed ongoing developments such as increased environmental awareness among customers and the growing significance of out-of-home delivery in addition to home delivery. However, this year, we have expanded the scope of our survey to dive deeper into the topic of e-commerce, aiming to assist businesses in securing online sales. Some key areas we have explored cover how shoppers browse and make purchases online, including the emerging trends of voice search and using smart speakers for ordering goods. We have also discovered that shoppers are more inclined to make purchases when presented with offers, discounts, exclusive access, or the option to subscribe. Lastly, a key insights we’ve found is that user-generated content, such as customer reviews and pictures, plays a vital role in influencing purchasing decisions.

What do the results tell you in general about the challenges and opportunities in the market?

Let’s focus on two important aspects: free delivery and sustainability. Customers now expect free delivery and returns, all while demanding a more sustainable approach. You might think it’s contradictory, but it’s a challenge we must face head-on. I take pride in being part of a company that established a strong sustainability strategy with clear targets years ago. We have a solid plan to decarbonize transportation and logistics, aiming for net-zero emissions by 2050. However, it’s important to recognize that sustainability requires a collective effort and comes with additional costs. But here’s the exciting part: 59% of online shoppers are conscious about sustainability. This presents an excellent opportunity for retailers to position themselves in this area and use it as a competitive advantage.

How does DHL eCommerce plan to use the survey results?

I would describe our approach as twofold. Firstly, the results help us become even better advisors and subject matter experts for our customers. By working with them, we can work towards improving our services and helping them grow and scale their business.

Secondly, these results give us valuable insights into areas where we need to improve ourselves and identify emerging developments and trends that are worth exploring. It’s a continuous learning process that helps us stay ahead and deliver the best possible solutions to our customers.

About Ryan

Ryan Hunter is the Chief Sales Officer for DHL eCommerce, and a member of their Global Management Board. With two decades of experience in logistics and supply chain, he has held a variety of senior commercial leadership positions across the world, including in Europe, the Americas and Middle East and North Africa.

 An avid voice for the customer, Ryan has helped countless companies take their brands to global markets, not just supporting some of the world’s biggest multinationals, but also effectively driving the e-commerce vertical, and advising businesses in this sector. An experienced leader in e-commerce, Ryan’s diverse background and passion for profitable growth makes him a global logistics executive with a strong understanding of e-commerce CX and how to drive global expansion.