The National Retail Federation expects that online retail will grow 8-12% in 2017. The American Red Cross is achieving 50% yearly growth in eCommerce sales, far outpacing eCommerce norms.
Achieving eCommerce profitability is challenging. Given the level of competition and the amount of choices that consumers now have at their fingertips, success is often less about the products you offer, and more about best practices and the user experience that you deliver.
Broken Processes = Lost Customers
eCommerce has several components, including: technology, warehousing & fulfillment, customer service, and digital marketing. The people, processes, and systems that touch these components need to be coordinated and work together seamlessly. According to Gartner, many online retailers end up integrating their eCommerce platform with up to 15 technologies. See our guide, Uncovering the Real Costs of eCommerce Software for more insight on this subject..
How does this impact your business?
Broken processes or systems that don’t communicate in real time can impact order processing, timely shipments, and customer service. The result is a sub-optimal customer experience that can damage your brand if consumers post bad reviews, and hit your bottom line through customer attrition and decreased sales. According to one survey, 78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience. (American Express)
Let’s examine how one organization instantly tapped into time tested best practices when they chose their eCommerce roadmap. Their roadmap has enabled them to develop consistent branding and provide an optimal customer experience that has led to exceptional year by year growth.
Choosing the Right Road Map
In addition to its core mission providing international humanitarian aid, the American Red Cross also sells first aid and safety supplies to consumers and businesses. When it made the decision to evaluate eCommerce options, products were sold at hundreds of physical locations and the organization had costly internal distribution and customer service operations.
The American Red Cross recognized the many challenges of migrating product sales to the online world. The skill sets, resources, and infrastructure that facilitate brick and mortar retail sales aren’t easily adapted to the demands of eCommerce. Launching an eCommerce business is time consuming and requires considerable investment in systems and infrastructure. The Red Cross decided it needed comprehensive support, and an end to end, turnkey eCommerce company to launch their operation. This roadmap provided the following:
- Complete technology
- Consolidated warehousing and fulfillment
- Customer service
- Instant access to best practices & eCommerce infrastructure
- Completely integrated systems, people, and processes
- Low startup investment and predictable costs
Warehousing & Fulfillment – Reducing Infrastructure & Costs
DTC fulfillment has high volume pick/pack/ship demands. Warehouse space, staff, racks, and material handling equipment are needed to meet the requirements. Scanning and inventory management software will be needed to reduce errors and maximize productivity. The costs of infrastructure and technology add up.
The Red Cross was managing fulfillment internally with over 40 full time employees. When they outsourced fulfillment to their turnkey eCommerce partner, they were able to reassign these employees to other positions. They significantly reduced overhead while leveraging the best practices of an experienced DTC fulfillment operation. The decreased operating costs resulted in improved profits and management was relieved of the burden of managing a fulfillment operation. Because fulfillment was part of an end to end solution, the systems and processes were already integrated into the value chain, eliminating the risk of broken links.
Customer Service and Incremental Revenue
7 in 10 Americans said they were willing to spend more with companies they believe provide excellent customer service. (American Express)
In the past, customer service was a department that handled mundane processes: returns, exchanges, resolving customer complaints, and checking on order status. In recent years the bar has been raised for customer service, due in no small part to technology, the internet, and better educated consumers. Today’s online shopper expects that you’ll provide support across multiple communication channels, have a presence and engage on social media, and deliver comprehensive FAQs and rich content that will empower them before reaching out via e-mail or phone.
In addition to customer retention, some organizations now incorporate strategies that enable Customer Service to raise brand awareness and grow revenues. According to a Forrester analyst, cross sells and upsells account for an average of 10-30% of revenue for eCommerce sites. And Amazon has attributed up to 35% of sales to upsells.
In outsourcing its eCommerce operations to a turnkey solutions company, the American Red Cross has access to a US based customer service team. In addition to the customer service basics, this team has been educated with deep product knowledge. This enables them to make product recommendations that lead to increased sales. In addition, the team supports Red Cross B2B relationships. Representatives make outbound calls to advise customers of relevant offers that can provide value. Product training, combined with soft sell strategies have empowered representatives to be true brand ambassadors and grow revenues.
And because the turnkey provider has completely integrated technology, customer service reps use CRM software that provides real time visibility into all relevant facets of the operation, enabling them to answer questions and resolve everyday customer service issues quickly and efficiently.
Read the Full Case Study
You might have guessed by now that my company, Orderhouse, designed and manages the American Red Cross eCommerce business. To access the case study, please click here:
For more insight on end to end eCommerce strategy visit this resources page.