Five key strategies to make eCommerce in Nigeria the engine of growth for delivery organizations

Five key strategies to make eCommerce in Nigeria the engine of growth for delivery organizations

Clearly, this is a critical time for post and parcel organizations. They need to prioritize the competitive edge o‑ered by delivery options to increase market share or, at the very least, investigate innovative solutions that will slow further parcel and package erosion.

Here are five areas of focus:

  1. Happy consumers

Above all, eTailers want happy customers, and the way to do that is through o‑ering greater control and predictability. Indeed, our study reveals that the three most important delivery provider features for eTailers all relate to consumer needs. Large and small companies alike were united on wanting services that allow their customers to choose delivery times.

This is echoed by shoppers themselves. In other research, 91 percent said an allocated delivery time was the most important shipping feature for them, and 74 percent said they would shop more online if they had more control over delivery.8 Consumer needs have to be at the center of everything as delivery organizations transform their eCommerce and digital capabilities.

2.Parcel returns impact financial returns

Research has found that about 30 percent of all products that are purchased online will be returned.9 Consumers want better returns options and services—81 percent would shop more with a retailer that made returns easy.10 Understandably, 79 percent of eTailers place returns capabilities among the most important criteria when evaluating a delivery provider.

Innovative returns services are now key di‑erentiators for delivery organizations. Singapore Post (SingPost) has recognized this as a key part of its expansion into eCommerce services. Last year it purchased 30 percent of Hubbed, an Australian company that uses hundreds of newsagents as hubs for the collection of eCommerce returns.11 SingPost revenue surged by 20.1 percent in the first half of the Group’s current financial year (2015 to 2016), much of this due to eCommerce growth which now accounts for 29 percent of total revenue.

3.Price intelligence

eTailers are not only highly sensitive about angry customers, they are equally sensitive about something else: price. The top reason eTailers give for sticking with one provider is to consolidate volume and get the best volume discount on price (70 percent). This suggests that post and parcel organizations should test volume discount levels to make sure they o‑er terms that will help promote eTailer exclusivity, or at least primary provider status. However, the top reason providers give for choosing to use multiple providers is also to get the best pricing (73 percent).

Price is both the biggest reason for remaining loyal and for shopping around-what should delivery organizations take from these findings?

Clearly, pricing o‑ers delivery organizations an excellent lever to capture market share. With 64 percent more parcels going to the primary provider, the key is to use pricing e‑ectively. The aim is not to be the only provider, but to move from being a second choice to first place. These organizations will need to be more sophisticated about price setting, leveraging as much information as possible. The right digital tools, particularly analytics, can help post and parcel organizations make smarter pricing decisions. This will not only help to maintain customer loyalty. Richer market data on how prices impact demand for services will help maximize profitability through faster, more evidence-based pricing decisions.

 

4.Segmented features

Whatever their size, eTailers want the best price—yet the needs of smaller and larger eTailers diverge in other areas. Our survey shows that as companies grow bigger the complexity and diversity of services they require increases rapidly. For example, larger eTailers are significantly more interested in services like warehousing and fulfillment, onsite installation of purchases. This suggests that while basic services are sucient to capture smaller businesses, more robust features will be necessary to keep them as they grow. Properly segmenting customers to develop targeted products will be the key to win both the price and feature battle.

5.Cross-border easiness

Finally, one critical area that requires post and parcel organizations to customize their o‑erings is cross-border business-to-consumer (B2C) eCommerce. Globally, this market is set to grow to US$994 billion by 2020, when it will represent 29 percent of all B2C eCommerce. Seventy-eight percent growth is forecast to come from new customers in emerging markets, particularly those in the Asia-Pacific region. These new cross-border shoppers have di‑erent needs and expectations compared to traditional cross-border customers.

Tailoring services has become critical for global eTailers to successfully take advantage of these new market opportunities. Providers that ensure seamless, simplified and reliable international delivery services will quickly become the primary and preferred provider that eTailers seek. Despite identifying the importance of cross-border services, only 26 percent of eTailers fill out the required customs documentation for customers online and, in general, cross-border services scored low satisfaction ratings in our survey.

Global integrators are already investing heavily to localize and improve the eciency of cross-border services. FedEx, for example, has purchased Bongo International, a cross-border technology provider with capabilities such as duty and tax calculations, export compliance management, fraud protection, currency services and local language interfaces.13 This followed UPS’s acquisition of a similar company, i-parcel, in mid-2014.14 Both acquisitions provide localized look-and-feel plus fully-landed total prices—seamlessly integrated into eCommerce websites.

This kind of customization helps merchants attract more business and makes international shopping much easier for consumers, thereby fueling ever-greater use of cross-border delivery services.

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