Tapping logistics data to drive e-commerce growth and cost savings

After two years of exponential growth, we see a slowdown in e-commerce. The leading causes are inflation, rising fuel costs, and pent-up demand for physical retail experiences. Yet, there is a growing demand for better delivery experiences at a lower cost. Customers expect more delivery options, faster shipping, and complete visibility around their purchases, just as the market is also getting saturated with more product options that facilitate cross-border commerce.

For e-commerce businesses, that translates to an urgent need to optimize logistics operations and build clear differentiating values based on the post-purchase experience.

Now for some good news. Merchants are already sitting on tons of data they can use to their advantage to achieve their goals. But just having data isn’t enough. E-commerce business needs to make sense of it before it can be used.

Operationalizing insights from logistics data for smarter decision-making

E-commerce merchants are producing more data than ever before. But how can they collect the right data, operationalize it, and apply the knowledge to their business decision-making?

How e-commerce businesses can realize the full potential of logistics data

  1. Last mile logistics management remains complicated, and customers are seemingly never satisfied with the delivery performance. By standardizing, aggregating, and analyzing logistics data, merchants can identify the best-performing carriers for various types of deliveries based on regions and seasons. A solid handle on logistics data will also give them greater leverage when negotiating logistics provider contracts and services for their parcel volumes. With an end-to-end overview of delivery, data merchants have the chance to investigate delivery issues as they arise. Even more important, they have a solid basis for collecting SLA (service level agreement) penalties should carriers fail to deliver on their promise. Investing in the correct data setup ensures smooth operations and cost savings on this sensitive part of the customer’s buying journey.
  2. Real-time delivery data can also improve operational visibility and communication from the first to the last mile. Customers long to receive accurate, proactive, and actionable tracking notifications throughout the entire delivery journey with complete visibility over their order whereabouts. This level of transparency already eliminates a great number of customer service tickets caused by WISMO (Where Is My Order) inquiries, as customers are always in the know. On top of that, customer service teams can leverage a 360 degrees view of the logistics data to proactively reach out to customers whose parcels face delays or other issues. They have the chance to turn difficult situations into great customer experiences and do their job with improved efficiency.
  3. Tracking data provides the opportunity to influence the customer experience even before customers hit the ‘buy’ button. More than 80% of online shoppers prefer to shop with retailers who show exact Delivery Dates at checkout. Over 59% of customers claim they will remain home to receive parcels on delivery days to ensure successful deliveries. However, carrier data can be unreliable and provide customers with conservative windows for estimates (up to 5- 10 business days). Not knowing when deliveries arrive can be a significant source of frustration – or cart abandonment. If logistics data is enriched via machine learning and AI-powered algorithms, merchants can present Estimated Dates of Delivery with up to 98% accuracy. Merchants can leverage this data to drive higher checkout conversions and successful deliveries and build customer confidence and trust.

Taking Logistics data the extra mile to monetize on customer experience

From a macro view, a data-driven strategy can improve business growth in many ways. But at the same time, there are more refined ways that a merchant can leverage data to improve the business further.

Case in point, the post-purchase experience: Nothing beats the anticipation of parcel deliveries by customers. Consider this fact: Over 90% of shoppers actively track the delivery status of their online orders, and some check on their order statuses at least once a day. Instead of sending customers to carrier tracking pages, merchants can proactively update customers with all parcel tracking information through notifications and route them back to their webshop. This is where merchants can delight them with additional information about their purchase and leverage valuable up- and cross-selling opportunities.

The many moving parts of delivery logistics, from potential warehousing issues to last-mile complications, could render carrier data inaccurate. Good predictions from this data can prove tricky. Hence, innovations in machine learning present more sophisticated solutions for delivery predictions. With the help of actionable logistics data and innovative post-purchase communication strategies, e-commerce brands can create unique and memorable brand experiences, generate repeat business and save on marketing acquisition costs.

Closing the gap between carrier and merchant

For merchants with little control over their post-purchase processes, the transition from checkout to fulfillment can be chaotic, and customers certainly won’t appreciate it, nor will they return. The remedy sounds simple enough; collect data from carriers and freight operators, aggregate it, and make it transparent to customers and internal teams.  But is it really that simple?

E-commerce shipments have multiple scan points from the first to the last mile, potentially producing a wide array of unique and individual events across the first to the last mile. Collecting this data results in a substantial pile of unstructured and unstandardized sets and metrics. Adding to the complexity, there is no global standard for parcel tracking, the data remains diverse across different logistics carriers, languages, and time zones. Making sense of the disjointed and disparate data standards can take a significant effort, and the data might already be outdated when the analytics are finalized.

But if the goal is to take control of mercantile processes by establishing visibility across e-commerce operations, implementing data-driven technology is of utmost necessity. Having the right setup to streamline and standardize e-commerce logistics data can be a cornerstone to operational success and further business growth.

Today, we have only scratched the surface of what data can do for e-commerce businesses. What’s clear, however, is that e-commerce businesses need to start forming a digital strategy that is led by data aggregation and structuring. With more e-commerce executives agreeing that logistics data holds the key to an amazing future for the e-commerce industry, delaying it can end up causing irreversible effects on long-term growth and market share.