So you think you can launch a website as an extension of your existing business and treat your online customers just like the ones who walk through your door? Think again!
The Australian online shopper has, over recent years, evolved to expect a different (and often higher) level of service which some business owners will find difficult to provide. It’s all part of the cost / benefit evaluation all decision-makers need to weigh – the actual cost of running a successful and profitable online business versus the value of sales.
Fast & Free Shipping
All business owners and shipping service providers know there’s no such thing as free shipping. And most online shoppers know the concept is a furphy too… but this doesn’t stop them from demanding it. As more international retailers offer to ship to Australia for free, so your customers come to expect you will offer the same.
While customers visiting your business in person don’t mind paying for transport, petrol or parking costs, they apply a non-tactile discount to online purchases – if I can’t see and touch your products, I don’t want to have to pay for postage on top of the listed price.
To combat this, more eBay sellers and other local eCommerce sites are selling their products at a price that includes shipping costs, but is promoted as “FREE” shipping. Though there’s really no such thing, you might be surprised at how happily buyers flock to anything with the word free attached. The only way to know for sure is to experiment with your own products and customers.
What trumps – cheapest product with highest shipping charges; medium priced product with medium (or actual) shipping charges; or the highest priced product with the promise of FREE shipping?
With the recent launch of eBay Now in the US, and similar one-hour delivery promises from other websites, some shoppers will also be demanding a lightning-fast delivery service (for an additional charge). While this is generally restricted to metropolitan areas only, if you aren’t getting your products into your customers’ hands within two days, you’re not meeting their expectations and not offering a fast service will limit your customer appeal.
Another buyer discount applied for the non-tactile online shopping experience is to expect to return products. Not just those that are faulty – but any product bought online, returned for any reason. Wrong size, wrong colour, just don’t like it… reasons beyond your business’ control.
The smartest businesses are using returns to their advantage and most report that it does not significantly increase overall business costs. Consider the buyer message: “purchase three sizes from us and simply return the ones that don’t fit” versus: “no returns accepted under any circumstances, ever.”
Not only is the latter sending customers away in droves, but the former is likely promoting repeat purchase and strong word of mouth. The real rewards are reaped if you offer returns for a period of longer than thirty days or, as best in class would suggest, you extend returns for a whole year from date of purchase.
The next question is who pays return postage? While your offline business should have budgeted for ‘shrinkage’ (stolen, damaged or misplaced products), your online business should be investing a similar amount in paying to have your customers’ unwanted products returned to your warehouse.
If you think these service standards are impossible to maintain on your current profit margins you may need to revisit your business model, or longevity in eCommerce. An ever-expanding number of local and international e-tailers and eBay sellers are rushing to give your buyers what they really want.Todd Alexander is an eBay expert who has been working in retail and eCommerce for more than twenty years. He is the author of six books about buying and selling online, including the upcoming The New eBay to be released June 2013.