Turn Logistics into a Revenue Center for your E-Commerce Business

By 

Ura Verma

Published 

November 11, 2022

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In this webinar, learn about how logistics can transform into a high ROI center for your business, turning your brand into a revenue-generating beast.

Our experts Vishal Totla (Co-Founder and COO, Shipyaari) and Rishabh Ladha (Co-founder, SquadStack) shed some light on the challenges e-commerce businesses face during the buyer journey and how they can be solved.

Watch the full webinar video below, or read on for key highlights!

What does the webinar cover?

  • Understanding logistics, delivery processes, and ways to improve customer experience
  • NDR/RTO best practices to reduce returns
  • Increasing review generation and repurchase rates
  • How customer feedback can transform your marketing messaging, sales, and product

Major Challenges for E-Commerce Businesses 

High abandoned cart rates

The average industry abandoned cart rate is anywhere between 51-60%. Surprisingly, some businesses report a rate as high as 70-80%. 

NDR & RTO

NDR raises can happen because of 2 reasons, customer-related or carrier related.

The Indian e-commerce business experiences 60-70% of COD orders, which increases the NDR rate heavily.

RTO happens when a shipment doesn't get delivered and is sent back to its origin. The ratio is low for prepaid orders, but COD orders see a 30-40% spike in RTO rates.

Poor customer reviews 

Every brand is looking for product validation. If you don’t have a review strategy, you are throwing away validation and not creating an organic user base or a well-known brand.

Repeat orders

Lack of  reviews and repeat order strategies affect your customer lifetime value (LTV), increasing your CAC. Not having a repurchase strategy can drastically affect customer buying behavior.

Gathering actionable insights

Some business owners and founders spend 6-7 hours a week reviewing customer feedback and discussing solutions with their support teams. Doing this is good but definitely not scalable.

Most teams don’t have the framework for taking insightful feedback from customers. In a competitive market, a strategy for this can help retain customers and improve products/services.

The Solution

E-commerce businesses have three essential pillars; product, marketing, and logistics. You compromise on either one of them, and the entire system collapses.  

You can create a great product and spend lots of capital on marketing. Yet, revenue generation will always be a struggle if you can’t logistically deliver the product and give the customer what your brand promised.

The solution? Prioritizing customer experience over cost, always.

Some businesses invest less in logistics and expect excellent outcomes in customer experience. This is impossible since logistics is a service. The more you invest in it, the higher your customer satisfaction will be.

Bad logistics compromise on customer and product experience leading to low repurchase rates, bad reviews, and lost revenue.

Why should you choose customer experience/ good logistics over cost?

  • Why should you choose customer experience/ good logistics over cost?
  • Faster delivery with higher success rates.
  • Better reviews due to excellent customer service
  • Drives repeat purchases

Breaking Down the Challenges

During order

Reasons for high abandoned cart rates may vary. It can be because of payment methods, consumer buying mindset, website issues, etc. This is a low-hanging fruit since the buyer is towards the end of their order journey, which  yields a considerable revenue loss.

How to fix this?

WhatsApp messages, texts, and automation can lead to a 10-20% lift.

But calling always performs better when it comes to abandoned cart conversions.

If a buyer is not buying, then there must be a concern. With this mindset, companies have seen an easy 5-10x lift in abandoned cart rates by deploying telecallers to reach out.

Calling also increases comfort and trust; it boosts delivery ratios.

During delivery

NDR & RTO are the main issues during the delivery journey. NDRs can happen because of payment issues, unavailable customers, wanting future date delivery, etc.

How to fix this?

Having a strategy in place for, e.g., whenever an NDR/RTO is raised, you can contact the customer and understand the issue, then decide the next steps accordingly. E.g., redelivery returns, etc. It is vital to give the next steps to the carrier within the same day for optimum service.

After-delivery

The challenge after a delivery completion is retaining the customer and driving repurchase rates.

When you drive repurchase rates, your LTV and CAC ratios increase, which increases revenue. Through this, you also boost brand value, trust, and referrals.

The solution?

Having a repurchase program is essential. Businesses spend so much time and money getting new customers when they can cross-sell and up-sell to their existing database.

Ways to increase repurchase rates; 

  • Whatsapp, email, calling outreach 
  • Cohort-to-cohort outreach strategy: Categorize different personas based on demographics, cities, buying habits, etc. and then schedule feedback calls accordingly. 

Power of Customer Feedback

Taking customer feedback seriously and improving the system through that data is still at the nascent stage in India. Usually, product and journey improvements are gut-driven for various businesses, which can be detrimental. E-commerce companies sit over magnitudes of customer data that can be channeled correctly. 

Why is feedback culture important? 

  • Brands and categories are super competitive in the e-commerce business. Actionable customer feedback can help distinguish your brand, understand improvements, and support selling strategies.
  • Gut vs. data-driven: E-commerce is entirely a data-driven business. Customer feedback gives you direct and unedited data that can help the company. 
  • Getting feedback and driving insights is a high ROI activity. You are addressing problems at the grassroots level, which improves your marketing, product, and customer journey. 

You can take feedback through various cohorts; 

  • Low net promoter scores (NPS)
  • Low customer satisfaction score (CSAT)
  • Customers who have returned product 
  • New product feedback
  • If you want to do a basic audit 
  • If you have promoters, you can get their product feedback 

Finally, just because you have feedback doesn't mean your business will magically transform. The idea is to use that actionable data to run an intelligent business. 

Conclusion and Key Insights

  • Have an intentional data-driven strategy for your logistics 
  • It is essential to have an outreach set up for consumers for each stage of the journey. 
  • Invest in good logistics to improve customer satisfaction, i.e., customer experience > cost.
  • Drive reviews and feedback for business improvement, brand trust, and increased repurchase rates.

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