Digital consumers expect eCommerce enterprises to 'get delivery right' or risk losing business. In fact, delivery options and experiences affect consumers’ purchasing decisions. One research reveals that 87% of customers are highly likely to shop again with an online store after a positive delivery experience. Also, 38% of shoppers will not buy from a business after a poor delivery experience.
As such, eCommerce companies should perfect their order fulfillment process to increase customer satisfaction, improve ROI and stay competitive. One way of doing this is tracking order fulfillment metrics to identify your performance and areas that require improvement. Which order fulfillment metrics should your business be monitoring? Our eCommerce fulfillment experts explain:
1. On-time Delivery
69% of consumers are less likely to shop with your business if you fail to meet your delivery window. On-time shopping is the percentage of orders shipped before or on the requested date versus the number of shipped orders. It is calculated by dividing the orders shipped on time by the total number of orders shipped. For instance, if you fulfilled 500 orders last week, and only 100 of them were shipped early, or on time, your on-time shipping rate is 100/500=0.2 or 20%.
On-time shipping is a vital order fulfillment metric as it determines the pace of your shipping process. A low metric means that your process is slow, which increases the risk of customer dissatisfaction. There may be delays and inefficiencies in picking, packing, and shipping orders. You can improve this metric by optimizing your pick, pack, and ship cycle so that orders are on transit in the shortest time possible.
2. Fulfillment Accuracy Rate
According to recent statistics, 23% of consumers return products because they received the wrong item. This makes fulfillment accuracy rate an essential metric to track. You measure this metric by dividing the number of accurately fulfilled orders by the number of orders shipped in a specific period. Typically, the fulfillment accuracy rate should be 100%, and every customer should receive what they ordered. Customers will obviously be dissatisfied when they get something they did not order—incorrect size, color, or quantity.
A low fulfillment accuracy rate means that you do not deliver the right products or quantities to your customers. It increases return rates and affects the probability of a customer making a repeat purchase. You can improve this metric by automating your inventory management and working with an experienced order fulfillment company. This way, you organize your product lines and reduce the likelihood of mistakes and confusion during picking and packing.
3. Rate of Return
Consumers return 30% of the products they buy online. Among the major reasons for returned orders include improper packaging, damaged products, long delivery times, a faulty item, incorrect order processing, low-quality products and the product looks different from the online one.
You measure the return rate by dividing the number of returned orders by the number of fulfilled orders. A high rate of return is costly, especially if the shipping was free. Also, it affects customer satisfaction, and some may avoid doing business with you in the future. The best way to address this issue and ensure a low or no return rate is to uncover and address return reasons. For example, if an order was returned due to extended delivery times, you try to streamline your fulfillment process to make the delivery times shorter.
Of course, some returns are inevitable. This does present an opportunity to provide a quick and efficient returns process to keep customers satisfied.
4. Shipping Cost-Per-Order
Shipping cost-per-order is the amount spent to deliver an order to a customer. You calculate it by dividing the total shipping costs in a particular duration by the number of deliveries completed. This metric lets you know how much you are spending on the shipping aspect of fulfillment.
Studies show that 56% of consumers abandon carts because of expensive delivery options. Therefore, online stores should strive to keep shipping costs low. You can lower shipping cost-per-order using order consolidation and negotiating fair deals with shipping companies. You can also partner with a 3PL that will find the best shipping option for you based on shipping costs and expected transit times to optimize your order fulfillment.
5. Total Order Cycle Time
Consumers increasingly require eCommerce businesses to offer same-day and next-day delivery. Around 41% of shoppers are willing to pay a fee for same-day delivery. Consequently, you should track your total order cycle time to determine how long you take to deliver orders to your customers’ doorsteps.
The total order cycle time and customer satisfaction are intertwined. The shorter the order cycle time, the higher the customer satisfaction. If you have a lengthy order cycle time, you need to identify and resolve issues with your vendors and shipping carriers that cause delays. You calculate this metric by subtracting the time the customer orders an item from the time they received it. Then, divide this number by the total orders fulfilled.
Streamline Your Order Fulfillment Process
Order fulfillment is a crucial part of eCommerce. As such, online vendors should take time to monitor and improve their fulfillment process by tracking the order fulfillment metrics listed above. This way, they can increase customer satisfaction, guarantee repeat purchases and improve the ROI. While some fulfillment metrics should be at an all-time low, others should go as high as possible. Rakuten Super Logistics provides eCommerce fulfillment services and logistics you need to meet your business goals. We work with you to streamline the process, so you have time to focus on growing your business. Request a quote today to see how we can provide the supply chain solutions you need to be successful.