How shipping can influence an online purchase decision

How shipping can influence an online purchase decision article image

Shipping-related concerns are a crucial factor for consumers when buying online, a new study has found.

More than half of those surveyed said shipping costs determine their decision to make an online purchase overseas. And 50 percent said delivery time is crucial.

The study, commissioned by FedEx Express (FedEx), also found lack of trust is hindering the international growth of small-to-medium-sized enterprises (SME) retailers.

Gaining the confidence of consumers is critical to the growth of online international purchases and the success of SMEs, the study into global behaviour and cross border e-commerce found.

According to the study, 80 percent of Australians purchase online at least once a year from an overseas e-tailer and more than half spend more than $US100 annually.

The study showed only 11 percent of those surveyed would choose to purchase from an SME independent online retailer. Most consumers surveyed preferred to buy through major brand retail sites.

The reluctance to deal with SME e-tailers was due to several reasons including:

  • 48% cited poor website design as a deterrent to them purchasing
  • 41% said lack of recognition or reputation of an SME was a concern
  • 44% said long shipping delays would discourage them buying
  • 37% cited the inability to track packages affected their purchasing decision.

Conducted by Forrester Consulting on behalf of FedEx, the research provides key insights for SMEs looking to expand internationally.

Researchers questioned more than 9,000 respondents in 17 countries and territories, and conducted interviews with small-and-medium businesses with cross-border operations.

Mr Kim Garner, managing director, FedEx Express Australasia, said the findings would assist the company to better understand global purchasing behaviour in cross-border e-commerce.

“Its findings will help us to tailor our service offerings to be an even better fit with what our SME customers need,” Mr Garner said.

“It helps us to look at how we do things and what tools and innovation we can provide to help them – to better connect them to the world.”

Lack of trust

Partnering with well-respected service providers like FedEx would help SMEs gain more trust among e-commerce consumers, Mr Garner said.

“Lack of trust is a big issue according to the study. “In some cases consumers have no idea who the SME offering the product is. “And secondly, if they buy the product they are uncertain whether it will be delivered from that country.

“That is where we (FedEx) provides a big advantage to SMEs. Because of our reputation and strong brand awareness and service, if an SMS is tied to a reputable transport provider it helps the consumer to make a decision.

“They know the delivery process is going to work.

“People don’t like a lack of visibility or not being able to find out what is happening to their package.” 

More than half of those surveyed (52%) also wanted a simple, cost effective return process when buying online.

Integrated service offerings

“Customers need to have confidence that they can return items easily and have access to dependable shipping service, says Mr Garner.

“This highlights the importance for SMEs and international online retail sites to join hands with a reliable logistics provider that can provide integrated service offerings and a global network.”

So why choose FedEx?

“Because we are the best,” says Mr Garner without hesitation.

Innovation and outstanding customer service are the company’s main points of difference, he says proudly.

“We offer a range of different services depending on a customer’s requirements.

“What we offer is a time definite, customs cleared, door to door delivery service.

“We guarantee arrival times and that is what helps people trust and rely on the brand.

“Most people don’t realise the amount of work that goes on behind the scenes to make that happen.

“We can provide fast, medium or slow delivery times as well as the tools and innovation they require.”

Growth of e-commerce

Services include an International Priority Service (FedEx’s premium service), which guarantees delivery in 1-3 days to 20 countries and International Economy – a one- week service.

Mr Garner says the growth of e-commerce has been a “game changer” for most shipping companies.

“One of the biggest trends we have seen in recent years is the increase in residential deliveries,” he says.

With the huge rise in home deliveries FedEx has recently introduced new technology to streamline the process.

Customers are now advised via email or SMS of the date of delivery and are given a broad range of alternative options if they are unavailable at that time.

Customer experience

“This enables us to get a package to them as early as possible so they don’t come home and find their treasured item as been sent back to a depot and they have to wait another day for delivery.

“It’s all about improving the customer experience.”

The new technology is now available to FedEx customers in Sydney, with plans to extend the service nationally in coming months.

Mr Garner says FedEx prides itself on innovative technology to constantly improve its customer service.

In 1994 FedEx was the world’s first shipping company to introduce Track & Trace barcode technology to monitor the movement of goods from door to door.

“With Track & Trace a package that comes through our system is scanned up to 32 times,” Mr Garner says.

The company has also introduced a range of online tools designed to cut red tape and streamline the shipping process for SMEs.

“It’s about listening to our shippers and customers (the people at the receiving end),” Mr Garner says.

People, service, profit

“It’s also about providing them with the tools they need to make their lives as easy as possible.

“We want to provide them with the best possible service experience.”

Mr Garner says the company still maintains the same philosophy it had when its founder Fred Smith started the company in 1974 – People, Service, Profit.

Mr Smith, who is still an integral part of the FedEx Group, believed that if you look after your staff they will provide good service.

“That good service keeps customers coming back, which helps to keep you profitable so you can re-invest in your business,” says Mr Garner.

“That’s how you grow your business and enhance your reputation.

“And 41 years down the track this philosophy is still delivering results … we live by it.” 

About FedEx

FedEx, one of the world’s largest international shipping companies, was launched in the US some 41 years ago with a small fleet of aircraft servicing the domestic market. The company has since grown to become one of the largest airlines in the world, operating more than 650 aircraft worldwide. FedEx provides fast and reliable express delivery and airfreight services to more than 220 countries and territories. The FedEx Group has about 300,000 employees worldwide and handles about 9 million packages a day.

FedEx Australia, established in 1989, with about 900 employees in Australia and New Zealand.

Earlier this year, FedEx Corp was again named as one of the most admired companies in the world, according to a survey published in Fortune magazine.

The annual World’s Most Admired Companies report released in March lists FedEx as the No. 12 ranked company overall, and No. 1 in the delivery industry. 

FedEx has ranked among the top 20 in the Fortune World’s Most Admired Companies list since 2001.


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