Every retailer wants to achieve perfect fulfillment. But what does perfect fulfillment actually look like in ecommerce in 2021? With consumer expectations higher than ever, the answer might not be as straightforward as you think.
Perfect Order Rate (POR) is a measure that’s long been used by logistics providers and 3PLs to improve the fulfillment and shipping process. But as a legacy metric, POR doesn’t necessarily reflect what today’s consumers are looking for in the brands they support.
In this post, we’re going to explore the perfect order metric, and what retailers need to consider if they’re planning on using Perfect Order Rate as a KPI.
Perfect Order Rate (POC) is a common KPI within supply chain logistics that provides a high-level overview of the fulfillment and delivery process. Put simply, the perfect order metric is a measure of whether or not your current workflows are meeting customer expectations.
The benchmarks associated with the perfect order will vary depending on the business, but usually involves the following:
If you’re able to tick off each of these KPIs, then congrats, you’ve achieved a perfect order. But like most benchmarks, the reality is a little more complicated.
There’s a variety of ways that businesses can approach calculating their POR. The simplest method is to take the total number of orders from a defined period and apply your indicators to measure the success rate of individual orders.
Let’s say you received 500 orders in the space of a month and 56 of these involved some kind of error, such as late delivery or damaged products:
56 / 500 x 100 = 11.2% error rate
This would give your business a perfect order rate of 88.8%. Merchants may then want to drill down into each of these errors in more depth to understand how they are contributing to the drop in your POR.
Of course, no business is able to execute customer orders flawlessly every single time. Even with the most optimized fulfillment and delivery process, there can still be external events outside of your control that result in one or more of the above KPIs being missed. POR is more of an idealized metric, rather than about getting 100% all of the time.
POR provides businesses with a powerful metric that tells them at a glance how well their fulfillment operation is performing. It makes it straightforward to pick out specific links in the supply chain that are impacting the effectiveness of fulfillment and delivery, and to identify mitigating strategies to address them.
Moreover, Perfect Order Rate offers a concrete way of measuring customer satisfaction, a critically important metric that’s notoriously difficult to define in ecommerce. If your Perfect Order Rate is high, it’s safe to assume that customer satisfaction is also high.
However, Perfect Order Rate does suffer from one key weakness; as a legacy metric, it doesn’t reflect how customer expectations in ecommerce have evolved beyond just receiving their order at the right time with the right items. In 2021, this is considered the bare minimum. It might shield you from receiving customer complaints, but it certainly isn’t going to foster customer loyalty.
Why? Because the bar to impress customers has never been higher. Ecommerce offerings that were previously considered exceptional now represent the baseline for acceptable service.
Shipping is one touchpoint in the customer experience where this is clearly illustrated. Once upon a time, free two-day shipping was a major perk that made customers flock to your ecommerce store. Today, you need to be offering same-day delivery to have this effect – something which isn’t financially feasible for most independent online sellers.
In sum, the traditional metrics that make up ‘the perfect order’ are practically obsolete. The ecommerce landscape has changed recognition due to increased digitization and higher order volumes – and this means that our definition of the perfect order needs to change too.
So, what steps do businesses need to take if they want to score a perfect order with today’s consumers?
Today, the perfect order starts way before the order has been placed. This is because the shopping journey itself has a massive influence over whether or not consumers
In an omnichannel world, customers don’t want to be confined to one method of purchasing. By bridging the gap between physical and digital with O2O (online to offline) retail offerings, merchants can more easily meet consumer demands for immediacy and instant gratification. According to The State of Consumer Behavior 2021, nearly half of consumers say that they prefer shopping in physical stores because:
Your ability to coordinate multi-directional shopping journeys is now an expectation amongst consumers who’ve gotten used to taking their browsing offline when the time is right. BOPIS (Buy Online, Pick-Up In-Store) BORIS (Buy Online, Return In-Store), and Ship-from-Store all offer ways to streamline the fulfillment process and take pressure off your home delivery service, especially during peak season.
When offering O2O services, your business should apply exactly the same POR metrics as it does for other types of fulfillment. Speed, accuracy, and documentation are as equally important for click and collect as they are for home delivery.
Today, nearly three-quarters of U.S. adults report being a member of at least one loyalty rewards program. But compelling customers to join a program is one thing; actually getting them to participate is another.
Loyalty programs can be a fantastic way to foster loyalty and increase customer retention – but only if they’re coordinated in a way that connects seamlessly with every stage of the shopping journey.
For every program that provides genuine value, there are ten more that offer few tangible benefits. Customer loyalty is a fickle thing, and giving out a 15% discount or the opportunity to earn double points each quarter isn’t going to make much headway.
But offering perks such as free shipping or premium packaging can transform the fulfillment process into a value-added experience – especially when they’re part of a paid program that customers want to get full mileage from.
Measuring whether these benefits are being executed correctly during the fulfillment and shipping process is vital to your Perfect Order Rate, as errors could cause customer satisfaction to plummet.
Offering more than the standard credit cards has become more important than ever for retailers as digital wallet options proliferate. Today’s consumers want as much flexibility as possible in how they make payments – and when they get to make them.
The rise of Buy Now, Pay Later (BNPL) has totally upended consumer expectations for online shopping. With BNPL to turn over $680 billion worth of sales by 2025, we can expect retailers who decide to opt-out to become less attractive to shop with.
Payment options might not appear to have much to do with order fulfillment. But unless customers decide to complete that payment portal, they’ll be no orders for you to process at all. Making the payment process easy and seamless, as well as having customer care reps on-hand to assist with any questions or concerns, is the key to avoiding problems that may occur that can slow down fulfillment and prevent you from hitting KPIs.
We’re long past the era where offering a single flat-rate shipping option is considered satisfactory. Consumers have diverse needs, and the shipping methods you offer must reflect this. Some customers are happy to wait a week for their order so long as shipping is free, while as many as 70% of online shoppers are willing to extra for expedited delivery,
Offering cheap or free economy shipping alongside, faster, more expensive options gives your customers the flexibility and choice to decide what works best for them. This helps to increase conversions and customer satisfaction in the post-purchase phase.
The last mile refers to the final – and most costly – stage in the delivery process. Because residential delivery involves multiple drop-offs to different locations in a single trip, it’s extremely difficult for businesses to streamline this stage of delivery, which is often known as ‘the last mile problem’. This results in high operating costs and poor customer experience when delivery is late or even failed as a result of incorrect delivery information.
One way to shorten the last mile is to transition to a multi-node fulfillment strategy where fulfillment facilities at located in close proximity to key customer hubs. Keeping the last mile as short as possible eliminates many of the efficiencies associated with longer, short-haul journeys. When combined with real-time order tracking and proactive communications, brands can turn this common point of friction into a smooth touchpoint.
The post-purchase experience is something of a squeaky wheel within many ecommerce businesses. Once an order has been placed, attention transfers to ensuring that it gets fulfilled and shipped as quickly as possible – but often at the expense of communicating with the customer.
As we stated earlier, getting the right items to the right place at the right time is no longer the benchmark for success. If you tick these boxes but leave your customers suffering from delivery anxiety due to a lack of customer care, they’re unlikely to buy from you again. According to a report by PwC, one-third of consumers will stop supporting a brand after just one negative experience.
If you want to foster repeat purchasing behavior, you need to leave customers with a favorable impression that compels them to shop with you again. This is why the post-purchase stage should be an integral part of calculating your Perfect Order Rate.
So, what does a positive post-purchase experience look like?
Every single time you process an order, there should be a corresponding confirmation email flow that guides the customer through every stage of the fulfillment and shipping process.
According to LivePerson’s report, 83% of customers expect ongoing communication about their orders during the fulfillment process. It’s important to remember that your customers have little or no insight into what happens once their order is placed; fulfillment is a hidden process that takes place away from their eyes. So, they’re only going to know about their order status if you make this a part of your workflow.
For the perfect order, you should make it a KPI to offer updates at the following points:
Today’s customers love having control over their own customer experience. Why? Because it allows them to engage with a brand on their own terms. According to Bizreport, 73% of consumers want the ability to solve product or service issues on their own.
Customer self-service is when a brand gives its customers the tools and resources they need to troubleshoot issues on their own, rather than forcing them to contact a customer service representative. As well as increasing the bandwidth of your customer care team, self-service leads to high-quality interactions with your brand that increase familiarity and trust. By enabling customers to decide how they want to handle an issue, you’re creating a true customer-centered experience.
You can turn self-service into a POR metric by tracking what ratio of customers are using self-service tools versus contacting your customer care team directly. If customers are seeking answers from representatives that they can find elsewhere, you may need to look at how you can better empower customers to take charge of their experience.
Consumers are far more likely to feel loyal to brands that genuinely value their opinions and experiences. Giving them the opportunity to share what they think directly, rather than tagging you on a social media platform to get your attention, is a sign of transparency and investment in the customer experience.
Today’s consumers want to have full insight into the end-to-end delivery process, including estimated delivery date and time, possible delays, and their parcel’s current location.
By implementing a real-time order tracking system, your customers have no need to reach out for updates from your customer team. All they need to do is click the link provided in their order confirmation email, and they can alleviate their anxieties about how far away their order is.
Order tracking also helps to build customer anticipation and excitement for their purchase, which works particularly well when combined with an attractive unboxing to enhance the delivery experience.
Unboxing experiences, the attractive presentation of consumer goods through premium packaging, inserts, and free samples, help to bridge the ‘experience gap’ in ecommerce between buying a product and receiving it. It’s a sophisticated customer retention strategy because it gives generic items a higher perception of value than the same product offered elsewhere.
Through often elaborate, unboxing experiences don’t have to break the bank; even small additions such as branded stickers and packing tape make a huge difference to the impression you make upon delivery. Setting these inclusions of KIPS for a perfect order helps to ensure consistency in the customer experience.
Given that retailers lost an estimated $428 billion in merchandise to returns in 2020, it might seem odd to include the returns process as part of your Perfect Order Rate. After all, surely you want to try and avoid returns at all costs?
Returns might not be the desirable outcome for a business, but it still represents an opportunity to secure customer loyalty; 95% of consumers say that they would shop with a brand again after a positive returns experience – but over half of consumers say they won’t shop with a brand that doesn’t offer hassle-free returns.
You can execute the perfect order during the outbound fulfillment and delivery. But unless the returns experience is just as seamless, that customer is unlikely to shop with you again. That’s why the following checklist is crucial to ensuring customer satisfaction:
Forcing a customer to wait days or even weeks for you to approve their RMA is disempowering to customers – not to mention leaving resale opportunities to dry up and saddle you with dead stock. By contrast, self-service returns enable you to reach KPIs involving return processing much more easily.
Giving customers a unique return link when they place their order helps to alleviate worries about a product not being fit for their needs, and demonstrates trust by allowing them to take action as they see fit. This also takes a huge amount of pressure off your customer care team, who are often tied up with administrative tasks involving returns.
The experience of shopping with a retailer, whether online or offline, should always be cohesive from beginning to end. Sudden changes to your brand identity during the shopping experience can create friction and uncertainty, especially when it comes to key touchpoints such as payment or returns portals.
Directing your customers to a fully branded returns portal from their order confirmation email or your main website creates a seamless brand experience that inspires confidence in your ability to coordinate the returns process smoothly.
Achieving the perfect order may sound intimidating, but striving for flawless fulfillment is the best way to put yourself as close to 100% as possible. The higher your POR is, the happier your customers will be.
By redefining your definition of the perfect order to cater to the expectations of consumers in 2021, you can ensure that your brand stays relevant to customers and is able to foster lasting loyalty.