Australian retailers must invest more in the last mile and their post-purchase experience as Amazon seeks to monopolise the market, according to a whitepaper by Jarden and Shippit.
The Courting the Consumer via Last Mile whitepaper shows that online penetration will continue to lift as the experience improves and consumers seek out value. The three key drivers of where consumers shop online are price, post-purchase experience and range.
Customer expectations are rising with respect to the post-purchase experience, in large part led by growth and investment from Amazon, Temu and Shein. Poor delivery experience loses customers with one in two choosing to no longer shop with a brand after a poor experience. Younger demographics are less loyal and increasing the need to collect first-party data and lift execution.
Overall, greater investment is needed in Australia for three reasons:
- Amazon continues to expand its Australian DC capabilities with JARDe >20 RDCs, a fully automated distribution centre underway in Victoria and a new Western Australia DC opened, allowing to expand one-day delivery and lifting customer expectations.
- Choice means more options are available and customers are less loyal, cross-shopping more. Companies need to expand their range to grow baskets and compete with Amazon which has a range of over 200 million SKUs.
- Cost of customer acquisition is rising for CPC, +19% in Q4, with marketplaces like Temu and TPW heavily investing in marketing and customer acquisition. This increases the need to drive loyalty and find higher ROI ways of driving loyalty via experience, loyalty or true pull vs. push models.
Shippit co-founder and co-CEO, Rob Hango-Zada (pictured) said, “Delivery is the next frontier in retail. While many brands focus purely on their products and price point to carve out a competitive edge, delivery is one of the most influential – but often overlooked – factors that impact customer retention or customer churn. Fast and reliable delivery experiences are more important than ever.
“Our whitepaper with Jarden revealed that four in five (78%) Australians said the post-purchase experience was either very or extremely important, while 62% consumers would be less likely to shop a brand again if their delivery experience was poor.
“A convenient, reliable and memorable post-purchase experience is no longer a mere nice-to have, it’s essential; particularly as Amazon, Temu and Shein continue to capture a greater share of the market, and train long term habits and loyalty. Local retail incumbents need to provide increased transparency, reliability and confidence throughout the post purchase experience.”