The e-commerce train is leaving the station - have you got your ticket?

Are you looking for a seat on the highly competitive, yet potentially profitable e-commerce train? This white paper will give you an understanding of how Place might be more important than ever to meet customers’ demands and needs, and thus, why Place should be the engine of your e-business strategy.

Place engines your e-commerce strategy
Location, location, location – The mantra taken from real estate business might be the least of your concerns. How is location important in e-commerce as the whole concept builds on a non-physical shop virtually located in cyberspace? Yet, location is still where your customers get hands on the products bought, and location is the first physical place your customers meet your company, hence the concept of Place takes a broader meaning to it in e-commerce. Even though you are not present, place is where you build relation with your customers. Place is where you meet your customers’ expectations to the service you provide. But as you are not present, place is also where you risk disappointing your customers without you being able to influence the experience. Consequently, it is of highest importance for you to collaborate with logistics providers that will ensure the best possible last mile service that will comply with your customers’ demands and needs. Place is your ticket to a seat on the fast-moving e-commerce train.

The unstoppable e-commerce freight train
The e-commerce market is growing rapidly with seemingly endless potential, with more and more people becoming digital shoppers. Especially younger generations, the so-called digital natives, have embraced the convenient treats that come with e-commerce. Statistics from EuroStat and Norstat support the idea, that e-commerce will take a larger share of the overall consumer spending. Not only young consumers are more active e-shoppers, but also the elder are becoming increasingly confident and familiar with internet shopping. Moreover, a report from DIBS , Danish Internet Payment System, suggest that the e-commerce market in Denmark has increased with double digits rates every year over the past five years. Additionally, An APEX Insight forecast estimates that the number of parcels delivered in Denmark will increase by nearly five percent from 2017-2022. However, this does not mean that you can just lean back and enjoy the ride looking out the train window. With more consumers at the e-commerce market, competition from domestic e-retailers as well as e-retailers from abroad will evidently increase too. Therefore, keeping up with customers’ demands and needs will be paramount not to crash.

Keep on track with customer’s demands
While dominant companies like Fona and Blockbuster did not react and never arrived at the station, other companies such as Matas and H&M are struggling not to get derailed.

While there are definitely diverse and complex reasons to these companies’ challenges, there is one common denominator; the companies have not met their customers’ demands and needs; customers no longer depend on opening hours, products being on stock, and they don’t need to physically move themselves to a shop. Research point towards, that the most important reasons to shop online is that customers are able to shop when it suits them, it is time-saving and it is simply easier – common for these reasons is that they target convenience as the main reason why customers prefer online shopping. But how exactly is Customer Convenience transferred to place in e-commerce?

How can you make the train ride as convenient as possible?
Convenience as a parameter is not exclusively reserved to the Internet as a platform – convenience is equally important as a parameter of place. Specifically place as location and service of delivery. Customers point out two aspects of convenience when choosing which e-shop they prefer; flexibility in delivery and speed of delivery – these conditions must be met to attract customers to your digital store. Firstly, flexibility in delivery means that customers wants to be able to choose between several delivery options; whether they want to pick up the product at a physical store, the nearest supermarket, have it delivered at their workplace, at home, or at the nearest parcel locker. Because of customers diverging demands to delivery it is critical to your e-business’s success that you offer a flexible and far-reaching network of pick-up options. Secondly, customers have changed their demands to delivery time during the past few years. People expect their ordered products delivered faster than before. A PostNord report suggest that customers want their goods delivered within two to three days, with three days being the limit to customers’ patience. Moreover, the share of people who expect day to day delivery has quadrupled in just one year from 2015 to 2016, while the share of people who accept delivery from four days or more have decreased by 10% within just two years, which emphasize the importance of swift and flexible delivery service - parcel lockers seem to be the solution that will guarantee this.

Service fuels your business’ engine
The solution to customer’s demands is to deliver their ordered products where and when the customer wants it. A flexible and far-reaching delivery network of parcel lockers ensures a convenient and, as we discussed in last week’s white paper, Cost Efficient Last Mile Ecosystem, which will fuel your e-business’ engine and ensure that you stay on track with your customer’s demands. However, Customer Convenience along with Cost Efficiency means nothing if you don’t communicate it to your customers. Communication, as the third of the 4c’s will be the topic of next week’s white paper so stay on the train until we reach the final destination.

1. EuroStat, Digital economy & society in the EU, 2017
2. Dansk Erhverv, E-analyse, 2016
3. DIBS, Dansk e-handel, 2017
4. Apex Insight, Global Parcel Market, 2018
5. DIBS, Dansk e-handel, 2017; PostNord, E-commerce in Nordics 2017, 2017
6. PostNord, E-commerce in the Nordics 2017, 2017