What is Logistics? And why is it important to your Online Store?
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There are several key aspects to the success of an online store, such as building a strong brand identity and enhancing the customer shopping experience. But when the product does not arrive on time or does not arrive at all, everything else becomes secondary. That is why it is essential not only to know what logistics is, but also to understand why it is so important to your online store.
What is logistics?
Logistics is the management of storage, flow and distribution of physical resources. In the case of an online store, logistics involves the management and coordination of products, from their storage, through the stock to the dispatch of the products to the customer. And often also from the customer to your store. This is called reverse logistics.
Today there are 3 main logistical models used by online stores worldwide: dropshipping, fulfillment centers and self-operated. This choice will greatly change the way your online store handles logistics. But what does not change is the importance of this part of the operation to your success.
But why is logistics important to your Online Store?
The logistics of an online store begins with the storage of products. Items must be well identified and packaged to avoid sending wrong items and to minimize the risk of damage. Stock management should be done on a regular basis, as it should always be in accordance with what is presented on your sales platform. If your customers order items that are unavailable, your store will eventually suffer. Especially if it happens often. The credibility of your business will be affected and this will, in the long run, affect your sales. And both of these steps are important because when they are done efficiently and effectively, they decrease the lead time and accelerate the next step in the logistics process: the delivery of orders.
The logistics of delivering is one of the most important steps of your business. At the end of the day it is what will ensure that your product reaches the consumer and that’s all that the customer remembers. So if a delivery does not run as expected, it not only harms your revenue but also your reputation.
According to an Addressy study, one in 20 orders never reaches its destination. In addition, about 57% of consumers avoid buying from an online store with whom they have already had a negative delivery experience. And even if it’s not your fault, 78% of consumers blame you for a bad delivery.
However, a poor delivery does not stop there. In addition to a consumer talking to an average of 16 friends about their negative experience with a brand, many also go to their own social networks complain about what happened, increasing the range of their discontent.
And, whether it is related to complaints on social networks or not, about 65% of retailers say that late or never-arriving deliveries entail huge costs for their business, amounting to nearly €170,000 for some retailers.
These numbers show that in the case of eCommerce, contrary to what the saying goes, it is not the first impression that remains, but the last one. A good buying experience can be hampered if the consumer has problems with delivery logistics.
The changing logistics
The truth is that consumers no longer care about just the timely arrival of their orders. Since the emergence of specialized eCommerce companies such as Amazon and Alibaba, the logistics world has changed. They have made the logistics process much more efficient and faster, completely changing customer expectations. They are now more demanding and impatient than ever, becoming increasingly complicated to please.
To begin with, there are certain aspects that have to be guaranteed for consumers to even consider purchasing from an online store, such as the possibility of returning items.
Free delivery is also one of the key aspects that consumers take into consideration when buying online. According to a 2017 MetaPack study, 73% of consumers are even willing to spend more to reach the minimum value to not pay shipping.
Another aspect that the consumer appreciates is the possibility of choosing the carrier. About 55% of consumers between the ages of 27 and 38 say that this is a priority for them, as they have already had poor experiences with certain companies.
Flexibility at the place and time of delivery is also something that customers are looking for. According to Metapack, 77% of buyers expect their delivery options to be on the product page, and many take advantage of the different delivery options they have. In 2017, 82% preferred home delivery, 44% in-store delivery, 39% pick-up point and 19% delivery in the workplace. And about 35% of consumers are willing to pay more to have the items where they want, when they want.
The Role of Logistics in an Online Store
Nowadays, logistics is an indispensable part of a business. If a few years ago merchants could only think of that part of the operation as a wheel that made their business work, now they can use logistics as a competitive advantage.
Consumers are more demanding than ever and expect their orders to be compatible with their lifestyles. So if your business can take advantage of this by delivering interesting and relevant solutions to consumers in an efficient way, it’s on its way to success.