Marketing Ecommerce E-commerce

Is ultrafast delivery the be-all and end-all for e-commerce brands?

By Sam Richardson | Principal Visioneering Consultant

September 20, 2022 | 8 min read

If a brand can’t win on speed, what can it do to stand out from the competition? Twilio’s Sam Richardson takes a look as part of The Drum’s Evolution of E-commerce Deep Dive.

Speedy delivery

The global pandemic has seen on-demand grocery delivery move from a fringe concept to a common service to a crowded space in an incredibly short space of time. Many of us, confined to our homes over the past two years, have explored and relied on online shopping more than ever before. As such, retailers have been granted a unique opportunity to learn some valuable lessons about customer engagement based on the rapid growth of quick and at-home commerce.

The rise of home delivery companies like Gorillas and Getir has been swift, with the average value of online sales for UK groceries suddenly spiking at the start of the pandemic. These businesses have not only witnessed but also fostered such a change in customer expectations around availability and delivery speed – and there is much to be explored here about what the growth of these retailers indicates about the broader role of delivery in the customer experience.

Even though these rapid delivery businesses now have to grapple with tougher trading conditions, their initial success has encouraged a conversation about what speedy delivery says about customer engagement versus other priorities. In fact, research from Whistl found that 45% of buyers would change their mind about a purchase due to poor delivery. It’s clear that speed is an area of huge importance for businesses – not only to ensure a sale goes through, but also to retain customer respect and loyalty, and consequently make their mark among the ever-growing pack.

So, what does the advent of ‘superfast’ delivery teach us about the wider business world when it comes to customer engagement, and what are the other considerations that businesses must factor in? Do customers really care about speed, or is there more to it than that?

A ‘race to the bottom’ is not necessarily the only way to win

Much of fast e-commerce is based on the assumption that online shoppers want to receive their orders as quickly as possible – and while this is partly true, there is more to be considered here. With the absence of a physical store, these delivery changes have the potential to act as a way to reshape the concept of customer engagement.

It’s clear why speed provides a point of differentiation for them to traditional supermarkets, with consumers enticed by the ultrafast 10- or 15-minute delivery speed promised by these new brands. But if it’s fast and small-scale, it could also be hyper-local, or offer a more personal touch. Consumers are increasingly seeking out not only immediate experiences but also innovative, hyper-personalized and flexible ones. In fact, recent Twilio research pointed to the fact that speed is just one of the pillars of good customer engagement that people crave. For example, while 25% of respondents said that speed was most important to them when contacting a business, an equally significant 25% of people ranked emotion (eg getting a friendly and human response) higher, while 24% said expertise (eg speaking to someone who fully understands the processes and products of the business they represent) is at the top of their list, even if this comes at the expense of speed.

So, in order to keep up and stand the test of time, retailers must not only think about fast delivery but also proactive, reliable and personalized communication throughout the customer journey. As such, racing to be first and to scale fastest is not the only way to win – particularly as hyperscaling presents its own business challenges around long-term customer retention. For example, our research showed that friendly service is by far the biggest factor in customers returning to a brand again (42%).

Personalization is key for long-term customer engagement

Quick commerce companies are operationally limited to a smaller selection of items than a standard grocery store and, therefore, need to home in on what customers are really looking for so as to not waste any space stocking the wrong products. The same thinking should be applied to how organizations engage with customers more broadly – based on an understanding of what they actually want from you, whether that’s a certain channel, tone of voice, or something else.

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This is where first-party data comes into its own, not only helping to personalize the experience for customers but also benefiting the business by enabling them to learn from their user base. Data is increasingly being used by quick commerce companies to adjust the items on sale in each area, allowing them to change the assortment to target a very specific set of customers. This tactic is likely to increase as retailers increasingly break away from a homogeneous approach and become more integrated into the local community.

First-party data provides the tools for retailers to employ personalization, which is key for building long-lasting, impactful customer relationships. Businesses can explore the use of digital touchpoints to understand their customer base better and therefore target their communications more effectively. Many businesses use a multi or omni-channel strategy, but they must also take note of consumers’ channel preferences and adapt their communication approach as needed. By utilizing digital touchpoints in this way, retailers can tailor their customer offerings far more closely to their needs. This will ultimately enhance their services in a way that really serves their audience, in turn increasing their chances of those customers coming back for more.

Viewing ‘trends’ as tools

Ultimately, retailers need to be aware that the customer experience is the lens through which the consumer views the brand. They should consider that the rise of quick commerce may not actually be a trend to react to, but rather a chance to reevaluate their ‘rules of engagement’ with their customer base. For those whose business model is built upon getting orders to the customer quickly, ultrafast delivery can be a competitive tool. For others, an enhanced or differentiated delivery service is a better fit.

Knowing what to offer comes down to knowing the customer. But what’s increasingly evident is that authentic and thoughtful engagement, delivered in a holistic way, is more valuable than focusing on one element of the customer experience above all else. Brilliant customer experience comes from a brand mastering its understanding of the customer and their relationship – not simply as a result of speed.

Sam Richardson is principal visioneering consultant at Twilio. For more on the Evolution of E-commerce, check out The Drum’s latest Deep Dive.

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