Monday, April 7, 2014

Split shipments from same FC

Here is a new report from Kurt Salmon Associates about ecommerce shipping from Cyber Monday 2013. The quote that stood out to me is:

Forty-two percent of multi-unit orders arrived in multiple packages originating from a single distribution center. “In some instances, multiple shipments may be unavoidable for items that are bulky or that cannot be packed with other orders,” noted Gregory. “However, in many of the cases we observed, the splitting of shipments was indicative of broader systems and fulfillment design issues that allowed items that could have been packaged together to ship separately.”

This is a little surprising! However, from my point of view, there is good news as well: more for researchers like me to do to optimize the systems!

Wednesday, April 2, 2014

Online-to-offline

A few days ago, the Chinese ecommerce giant Alibaba invested $692 million for a 35% stake in a bricks-and-mortar retail chain. As the article reports, this is part of a strategy to develop its "online-to-offline" business. Given that one of the goals of this blog is to explore how brick-and-mortar retailers can survive/thrive in the brave new world of ecommerce and Amazon, this story is very interesting. Details are lacking, but I would expect to see more activity in this area soon.

Contrast this with the fears of "showrooming" a few years ago, when companies felt that customers were coming to brick-and-mortar stores simply to look at physical versions of the items that they would later buy from Amazon.com. Then, brick-and-mortar stores were sending traffic online, while we are now seeing a bit of a shift towards an online strategy that drives customers to the brick-and-mortar stores!

Monday, March 24, 2014

Do ecommerce customers care about returns?



In our survey, 73% of respondents said that they research a company’s return policy before they order from them.  This was surprising to me because usually these return policies do not make for light reading, and therefore could be easily overlooked, or blindly trusted.  I believe that this large proportion comes from the effect Amazon has in giving customers access to new online retailers.  People have far less trust in a small retailer than they do in say Target; therefore, customers will be more likely to research a company’s return policy, especially with the large bias towards finding the cheapest price – assuming that many small retailers are showing the cheapest price.

 

One interesting cross tab is with the age of respondents.  This shows us that as age increases, the percentage of respondents who said they do not look up the return policy also increases.  This could be because of greater trust by older customers, or less motivation to dig around the website to find the information. 


Finally, in the follow up question, respondents overwhelmingly said that when they research the return policy, they look for an enclosed shipping label (indicating free returns).  This, partnered with the effect of Amazon’s small retailers, explains the high rate of respondents who say they research the return policy.  It all comes down to the cheapest price, and if you might need to return your item and you care about price, free returns is a large bargaining chip.


[- Michael Werley]