What lessons have established e-commerce brands and brick-and-mortar stores with e-shops learned from the pandemic?
Internet shopping has become an integral part of the lives of most Slovaks in recent years. The popularity of e-shops had been growing steadily for a long time, but the corona crisis has significantly accelerated the adoption of new habits. For some months in the past year, online stores were the only way to get access to certain goods, and some consumers started to prefer using e-shops to eliminate the risks of infection.
As a result, some online stores enjoyed huge increases in sales. For example, the turnover of Alza, one of the largest e-shops in the Czech Republic and Slovakia, rose by 70% year-on-year. According to Eurostat, in the pandemic year of 2020 almost 70% of Slovaks shopped online, with an average of two purchases a month worth 214 euros.
Retailers realize that, to a large degree, consumers will maintain their newly formed habits. This is why many retailers took quick decisions to take actions they had originally planned for several years in the future. According to analysts’ estimates, the e-commerce sector as a whole has moved forward several years in terms of its thinking, strategy and, in some cases, investment in the past year.
So what were the most important lessons that retailers learned from the pandemic?
The first important takeaway was that only players who can respond to extreme sales fluctuations are able to ride the wave of online shopping growth. This applies to maintaining delivery dates as well as to responding to various customer requests, such as the refunding of payments for cancelled prepaid orders or handling claims.
Unlike in the past, when e-commerce retailers or companies with an online channel were able to predict and adequately prepare for fluctuations in demand, such as before Black Friday, no one could predict the sudden increase in sales during lockdowns. For example, Nay’s online sales grew by up to five times in the first days of the pandemic.
However, immediate revenue growth was not the only factor where scalability turned out to be the key differentiator for e-shops. To a large extent, scalability sets them up for future success or failure, which depends on their ability to build a reputation, acquire new customers, and deepen relationships with existing ones. Disappointed and frustrated customers do not come back.
This brings us to the second prerequisite of success in the world of e-commerce underlined and highlighted by the pandemic: customer service and the overall customer experience.
Despite rising unemployment, the economy slowing down, declining consumer confidence, and general economic uncertainty, price sensitivity in purchasing decisions has paradoxically been reduced during the pandemic. As many as three-fifths of consumers claim they have no problem paying a premium for products and services if a brand offers them a better customer experience.
In other words, today consumers are less willing to tolerate poor customer support, order delays, and the prolonged handling of complaints or refunds than any time before. One third of them lose patience with a retailer after their first bad experience, and up to 90% would not buy from a retailer anymore after two to five bad experiences.
If an e-shop fails to scale its processes and provide a first-class customer experience, it loses customers and unnecessarily increases customer support costs. Because, for example, if the customer does not have the information about the status of their order available, or if they cannot get it automatically on request, they will unnecessarily burden the customer helpline. Worst still, they can cancel the order. This also increases the risk that next time they will choose to buy from a competitor.
The two key lessons for e-commerce from this pandemic – the need for process scalability and an improved customer experience – have a single common denominator. The principal factor in ensuring both prerequisites of success is automation and customer self-service, to the maximum extent possible, which includes Robotic Process Automation (RPA). In other words, this refers to software robots that are able to automate any repetitive rule-based processes.
Just for illustration, imagine the sequence of steps triggered by a simple order cancellation request. Staff must find the order, verify the status, stop the goods dispatch process at the supplier, inform the customer, and possibly also refund the payment. Software robots can handle all these steps almost instantly, regardless of the number of cancellations received by the e-shop per day.
The same applies to other processes, the volume of which may significantly vary depending on demand. This includes checking the availability of goods at suppliers, checking and handling complaints, and internal processes such as report generation and the processing of the attendance records of temporary workers.
Naturally, even robotic software automation is not a panacea. If appropriate processes are not selected and the availability of input data and the natural limitations of robots are not considered, it can fail like any other project. At the same time, however, there is no doubt that to scale traffic and provide exceptional customer service without RPA will be extremely inefficient, if not impossible, for e-shops in the future.
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