Online shoppers have high expectations. Shoppers expect morefrom online shopping than easy-to-use websites. Successful onlineretailers are creating online shopping experiences that encouragerepeat customers and reward shopper loyalty. In 2013, UPS (UnitedParcel Service, Inc., Sandy Springs, GA) conducted a series ofstudies to gain insight about the shopping behavior of customers.The studies found that customers want to be able to shop anywhereat any time, and they want other services such as the flexibilityto choose delivery dates and locations. There are several trendsthat affect shoppers’ delivery expectations:
1. Omnichannel Fulfillment - Shoppers want an integrated buyingexperience across a firm’s multiple buying channels (its stores,website, and third-party retailers). According to the UPS study,44% of online shoppers want the option to buy online and pick upthe items at their local store. Another 62% said they wanted theability to make purchases online and make in-store returns. Thestudy also found that of the shoppers who use the ship-to-storeoption, 38% of them purchased other items while in the store.
2. Delivery Time Frames - Slow or delayed deliveries are one ofthe main reasons consumers do not shop online. Nearly half ofonline shoppers abandon their online carts before checking out whenthey find that the products they selected have long shipping times.Furthermore, very few potential customers are willing to pay higherprices for same-day delivery. On the other hand, when customersknow how long it will take for their products to arrive, they aresurprisingly patient with the retailer (for free shipping, they arewilling to wait as long as 7 days for delivery).
3. Customized Delivery - Ninety-seven percent of shoppers wantorder tracking services available so they can instantly determinethe status of their order. Whether through e-mail alerts or byaccessing the retailer’s website, customers demand updatedinformation on the shipping and delivery dates for their orders
4. Easy Return Policies - The number of people returning orexchanging orders has grown nearly every year since online shoppingbecame commonplace. Customers expect that returning orders will be“painless” and easily accommodated by online retailers. It alsopays off in terms of future sales, with 67% of consumers sayingthey will shop more often with a retailer if they offer ahassle-free returns policy.
Many of the expectations that online shoppers bring to theretail experience have implications for inventory management,suggesting that firms with fully integrated information andinventory control systems will be better prepared to compete forthe growing ranks of online shoppers. Between the steps ofintegrating upstream inventory, avoiding stock-outs, dealing withthe expectations of immediate delivery, and ease of use, today’sonline systems are critical sources of inventory management.Indeed, the organizations that are best at fully integrating withinventory systems will be best able to compete effectively foronline shoppers’ business.
A. Think of some aspects of inventory management discussed inthis chapter (for example, inventory costs or cycle-stockpatterns). How does online shopping affect them?
B. How is omnichannel shopping changing the way inventory ismanaged? How will modern inventory management systems makeomnichannel selling easier?
C. Suppose you are working for a local drugstore developing anonline shopping site. Think of some products you routinely sell,and apply the ABC classification system to them. How would the ABCclassification help you in planning for online sales?
