When shopping online, reaching the checkout page or app screen is not a guarantee of a sale. Consumers give up on the purchase intent for various reasons. According to a report, in 2022, only 3 out of 10 customers who add items to their cart complete the purchase. A well-designed checkout page and seamless payment method can lead to satisfied customers, while a poorly executed process can result in frustration and a loss of revenue. This highlights the importance of optimizing the checkout experience to ensure customer satisfaction and boost business outcomes.

What is checkout abandonment and what are the reasons for it?

Crafting an ideal eCommerce checkout experience is a critical element in enhancing customer satisfaction and driving sales conversion rates. Checkout abandonment occurs when customers exit the payment process before completing the transaction, and the reasons for this behavior can vary depending on the industry, target audience, and individual customer preferences.

Every abandoned checkout represents lost revenue for the business, as resources have been allocated toward marketing, operations, and development efforts to bring the customer to this stage of the purchasing process. To optimize outcomes, it is recommended to prioritize minimizing checkout abandonment rates, as it can have a significant impact on the overall financial performance of the business.

Source: Baymard Institue: Cart & Checkout Usability Research

Best practices for streamlining the checkout process in eCommerce platforms

#1 Keep the checkout process simple

Although it may seem obvious, it is crucial to avoid causing frustration for visitors during checkout as it could deter them from completing their purchase.

To minimize distractions during checkout, removing the header and footer may be a helpful consideration as they may draw the user’s attention away from important buttons and options. It is imperative to eliminate any possible obstacles such as lengthy forms with excess fields and mandatory account creation or sign-up during the checkout process to ensure a smooth and user-friendly experience. Some ways to ensure a simple and seamless user experience are:

a. Single-page checkout

With all the necessary steps displayed on a single page, users can complete the checkout process with minimal navigation. Furthermore, a single-page checkout can provide users with the ability to select custom delivery options and shipping methods. This helps to enhance the user experience by giving them more control over the delivery process. Incorporating a progress indicator in the checkout process will help users to track their progress and understand the mini-milestones they have accomplished, which can help to simplify the process and reduce confusion.

b. Smart form filling

This can be achieved through the use of various tools such as shipping address predictors, autofill options like Google Autofill, and form field validation with error notifications. To streamline the process further, consider adding a radio button or small checkbox that allows users to select the same billing address as the shipping address. These tools make form-filling quick, efficient, and error-free.

c. Guest Checkout

Many customers prefer to make a purchase quickly without the hassle of signing up or creating an account. Forcing them to do so can become a source of friction and lead to abandoned carts. By allowing users to checkout as a guest and enter only the minimum required information, they can proceed directly to payment and complete their purchase without delay.

#2 Localized checkout experience

When running an eCommerce website that caters to customers across various nations, it is essential to consider implementing a localized checkout experience. This approach increases the likelihood of converting potential customers by eliminating any barriers that they might encounter while navigating the checkout process. Here’s how you can do so:

a. Support for multiple currencies and payment gateways

To provide a seamless and personalized checkout experience for users of an eCommerce website operating across multiple countries, it is essential to consider implementing features such as support for multiple currencies and payment gateways. Instead of relying on currency conversion options, users should be allowed to select their preferred currency to avoid additional costs and potential friction.

b. Adhere to global tax guidelines

It is important to adhere to global tax guidelines, as tax requirements vary depending on the user’s location. By dynamically calculating international taxes based on the user’s location, the checkout process can be made more streamlined and frictionless.

c. Multi-language support

Supporting multiple languages can also greatly enhance the localized experience of the checkout process. Multilingual checkout options can remove the language barrier for online shoppers who may not be comfortable with English, contributing to a more seamless and pleasant overall experience.

#3 Entice a leaving customer to proceed to checkout

To improve online conversion rates, it’s important to take all possible steps to guide customers toward the checkout process.

a. Upsell your bestsellers

Upsells are a good way to incentivize customers to buy more items, but it’s important to strike a balance and avoid overwhelming users with too many options. Limited-time offers and checkbox buttons can make it easy for customers to add additional items to their cart. Suggested items should include a mix of subscription-based and one-time purchase options.

b. Offer discounts and personalized recommendations

Exit intent pop-ups can be used to offer discounts, provide compelling copy, and present limited-time promo codes to entice customers back to the checkout process. If customers still choose to leave, offering an option to sign up for updates or newsletters can help maintain a connection and encourage future purchases.

#4 Build trust and assurance

Building trust and assuring customers is essential for any business to succeed. During the checkout process, customers may have concerns about the product, support, or transaction security. To address these concerns, businesses can take several steps to assure customers.

a. Provide social proof

One effective approach is to incorporate customer testimonials or case studies with positive reviews on the website. This can help reassure customers about the quality of the product and reduce the risk of abandoned carts. By showcasing the real-life experiences of other satisfied customers, businesses can instill confidence in their potential buyers.

b. Easy access to customer support

Providing a live chat option or a support phone number during the checkout process can be a great way to offer assistance and address any concerns. Customers can get immediate help with their questions, and this can help to prevent them from abandoning their carts.

#5 Make checkout convenient and flexible

Streamlining the purchase process and providing customers with more options and flexibility are some effective ways to customer retention.

a. Multiple payment options

A common reason for cart abandonment is the unavailability of preferred payment methods, which vary across different countries. In some regions, credit cards are widely used, while in others, consumers may feel more secure using alternative methods such as Digital wallets like Paytm, Amazon Pay, or Apple Pay. By offering multiple payment options, you can enhance the customer experience and encourage them to complete their purchase.

b. Ensure mobile-friendliness

With mobile eCommerce sales on the rise, it is imperative to optimize the checkout process for mobile devices. According to Insider Intelligence, in 2023, mobile eCommerce sales are expected to account for 43.4% of total retail eCommerce sales, up from 41.8% in 2022. Neglecting to optimize your eCommerce checkout for mobile devices could result in missed opportunities for sales. Therefore, it is important to ensure that the mobile checkout process is just as seamless as the desktop and to test the effectiveness of the call-to-action buttons.

c. Providing convenient purchase options

Providing customers with both one-time purchase and subscription checkout options can offer flexibility and cater to different customer preferences. Offering subscriptions can also help to increase customer loyalty and retention. Therefore, it is recommended that eCommerce businesses consider providing both one-time purchase and subscription checkout options to enhance the customer experience.

#6 Be attentive to security and privacy

Ensuring security and privacy in online shopping is a crucial factor that demands attention. Customers often prioritize the perceived security of their transactions while shopping online. Additionally, displaying security certifications and trust seals at checkout instills confidence in concerned customers.

a. Meet security guidelines

It is recommended to obtain a Secure Sockets Layer (SSL) certificate for the eCommerce website, which establishes a secure connection and encrypts credit card information. Adherence to the Payment Card Industry Data Security Standard (PCI DSS) is also vital to safeguard card information and ensure secure payments.

b. Compliance with data privacy regulations

California Consumer Privacy Act (CCPA) and the General Data Privacy Regulation (GDPR) adherence is necessary when storing sensitive information collected from customers, such as phone numbers, credit card information, shipping address, and email address. Additionally, following Multifactor Authentication (MFA) standards provides added security beyond the traditional username and password login.

#7 Keep experimenting to find your fit

As an eCommerce merchant, it’s important to remember that there’s no one-size-fits-all approach to designing the perfect checkout experience for your customers. Prioritizing the design of your checkout and engaging in continuous experimentation is key. Regular testing and analysis can help identify areas that need improvement, ranging from CTA placement to image reorganization within the checkout design.

a. Consider A/B testing to find the fit

This involves creating two versions of a checkout page and testing each version with a group of customers to see which one performs better. By testing different variations of the checkout page, you can identify the elements that work best for your customers and improve the overall checkout experience.

b. Using analytics tools to understand customer behavior at the checkout

This can help identify common pain points and areas that require improvement. For example, if you notice a high cart abandonment rate on a particular page, you can investigate the reasons behind it and make changes to improve the user experience.

Wrapping Up

The process of checking out is undeniably a critical component of the buying journey, and therefore, it is prudent to consistently strive for its optimization, as this effort will yield favorable outcomes in the long term. Enhancing the checkout experience is an extensive and continuous undertaking, and adopting the following best practices can serve as a starting point, allowing room for experimentation to determine what tactics are most effective for your specific circumstances.

Changing lifestyles and leanings towards outsourced services compared to doing it yourself are propelling the growth of numerous services, one of which is the on-demand laundry service. The pandemic has accelerated the adoption of on-demand laundry. Property prices have further created leanings toward on-demand laundry services. Since most households may be able to afford a washing machine, but they may not be able to afford dedicated space or time for washing, drying, ironing, etc. In B2B, increased outsourcing of laundry is seen as the hospitality industry focuses on utilizing available real estate for revenue generation activities. Consequently, the on-demand laundry business has witnessed fast growth across different geographies. India’s laundry market is expected to grow to $15 billion by 2025, from $11.3B in 2019, according to a RedSeer Report.

As a business, on-demand laundry has its unique advantages. It is one of those businesses that have no receivables. Inventory or consumables are meager and do not block a significant part of the capital. Digital technologies are helping control the collection, delivery, and movement of garments, thereby permitting scale. The trend of increasing demand coupled with the ability to scale using digital makes on-demand laundry services the next upcoming industry.

Let’s dive deeper into what goes behind the operations of such an on-demand laundry service.

On-demand laundry service components and their digitalization

An on-demand laundry service lends itself to digitalization which enables tight control and management of every step of the operations. The similarities in B2C and B2B businesses simplify the digitalization of entire operations. Moreover, digitalization enables scalability of operations as it is now convenient to replicate the model in other cities nationwide as well as globally.

Following are the on-demand laundry service components discussed in detail:

Pickup & delivery

#1. Pickup

Service partners can take the help of route optimization tools to provide a hassle-free doorstep pickup and delivery experience to their customers.

a. Payments

Payment for purchase orders can be made during the booking process when choosing the time slot for pickup or during actual pickup. The customer can also be provided options to make an online payment at convenience.

b. Using QR Codes to pick up orders – Pick-up of garments

When a service delivery partner reaches the customer location, each customer is provided a QR Code induced bag to fill with laundry items for different wash orders. Each item is then photographed and provided with an individual barcode to keep count in the database. It creates an inventory management system where each item by the customer is tagged by the type of service requested and stored in the bag. The bag, in this sense, becomes an in-process inventory store.

Therefore, we can see that the entire process of controlling the inventory is crucial and can be automated completely with QR Codes and barcodes. This aspect of inventory management is useful for not only laundry but also manufacturing or construction as well.

c. Periodic schedule setup for pick-up

Customers can use the automatic scheduling feature to pick-up garments for cleaning and other purposes regularly. The customers won’t have to set aside any specific time daily for scheduling a pick-up and can set it for months or a year.

#2. Delivery

The bag with QR Code from the staging area goes into a van. The van scans individual bags and takes them to their respective hubs. Hubs will again scan the QR Codes of the bags and give them to the delivery partners. The delivery partners will now give the scanned bags to the respective end user.

#3. Subscription services

The end user can have different subscription options based on the time period and service. One can have free pickup and delivery if they have a subscription. In case one doesn’t have a subscription, they can be charged a certain amount after a total order value. This entire thing can be managed automatically on a digital platform.

Logistics

The following stages for the on-demand laundry service come right after the garments are picked up. They are part of the logistics management for the whole service.

#1. Driver management and Vehicle management

The laundry service providers can use driver management systems to control and manage the fleet of pick-up and delivery vans along with their drivers. Each van is assigned a tracker, which helps in real-time location sharing with the service provider and the customer.

a. Absenteeism

A daily attendance tracker can also be implemented to keep track of any absenteeism among the drivers. This helps avoid or manage any shortage of pick-up or delivery vans. The service providers can arrange for alternatives accordingly to keep a customer happy. Also, thorough background verification of the drivers is conducted to discourage any misplacement of garments.

#2. Hub management

A city is to be further broken down systematically into separate hubs. Each hub will have between 10 to 20 service delivery partners. All delivery partners in their respective work shifts will bring the entire bags into their respective hubs.

Hubs now will have to simply scan the QR Code of each bag and put it aside to update the entire inventory in the backend system.

#3. Delivery van management

The delivery vans are assigned to city hubs according to the available number of customers and order volume. Some areas may require a larger number of pick-up and delivery vans, hence, any idle delivery van from other hubs can be reallocated accordingly.

Central Processing Unit or CPU

The entire inventory from the hub is now scanned and put into a van. The van, now becomes the mega-store of inventory, delivers the bags to the central processing unit.

It is the factory where the actual washing will take place. The van consisting of QR Code bags is now unloaded after scanning at the CPU. These bags are delivered to the processing unit. The processing unit then opens the bags and assigns individual barcodes to each item in the bags.

Now each item is sent to respective wash jobs – washing, dry cleaning, ironing, etc.

a. Receipt and issue of garments

The bags from pickup vans are collected, segregated, and scanned to keep a record of each customer in the backend system. The bags are then moved forward to initiate the washing process.

b. Processing department – Barcodes based

i. Inspection – Call center

The service provider assigns specific people to look for irremovable stains on garments and call up the customers if it’s there. The customer is then provided with a choice to continue with the processing or return the garments.

ii. Processing

This is where the actual washing or dry cleaning takes place. Each item is assorted according to their wash order instructions and put into respective washers or dry cleaners.

1. Independent wash – Some customers may opt for independent wash or dry clean of their clothes. Here a camera is fitted across washers for such orders, and the entire process is recorded. The recorded video is then accessible by the customers for a specific number of days.

iii. Racking

After processing is complete, each item is now put into a rack. Racks will have QR Codes associated based on customer orders. Let’s say a customer ordered two washing and three dry cleanings. The rack will be incomplete until it has five items against the total customer order. Once the rack contains all the customer orders, it will signal that the order is complete, and all the items in the rack will be picked up and go to the finishing table.

iv. Finishing table

The repackaging of customer items takes place at the finishing table. Based on the item type, it puts a plastic wrap around the cloth item, put a hanger for suits, or wraps with paper on each item. All the items are now packed together and made into a single package which now goes into the staging area.

v. Staging Area – Issue

In the staging area, the package is put into a bag with a QR Code to return to the hubs and then to the customer via delivery vans.

Customer benefits

• 24-hour turnaround: Any type of wash order (apart from large clothes) can be turned around back to the customer within 24 hours. Non-urgent sizeable items such as carpets and curtains can be returned within 72 hours.
• Washing bulky items: Managing bulky items such as curtains and carpets is a challenge for businesses and households alike. With its pick-up and delivery services, on-demand laundry makes it conducive for customers to welcome their services.
• Easy order placement: The customers can do a 1-click order placement via the mobile app and set it for repeat order placements.
• Time slot convenience: Customers can choose their time slots for pick-up and delivery according to their own availability and convenience.
• Wide selection of services: The services offered can range across all types of washing and dry cleaning. Hence, the customer doesn’t have to set up any extra household system for such tasks.

Business benefits

• Green, clean environment: The central laundry processing unit is now designed for recycling water and heat-processed disposal of detergents along with cleaning agents, thereby reducing carbon footprint and being environmentally friendly.
• Tight inventory control: Digitalization of the whole operation helps the service providers to keep tight control over the movement of items across various stages.
• Scalable: One of the major advantages of the digital model and its platform is that it is scalable to cover multiple areas within a city, grow to multiple cities, and even expand to multiple countries. Thus, the model permits starting small and growing as the business grows.
• Shorter breakeven period: Since laundry businesses are not mandated to be in a prime locality, business viability improves. Also, the sector itself is growing in volume. These factors contribute to an earlier breakeven which is estimated to be around 3 years for this business.

Tech stack and microservice architecture for developing an on-demand mobile solution for a laundry business

A possible three-tiered microservice architecture diagram for an on-demand laundry service:

The following could be the technology stacks that can be used to create an on-demand laundry service:

Looking forward

As lifestyles evolve, on-demand laundry services will grow. Digital platforms enable scalability, inventory management, and tight financial control. This unique feature applies to not only laundry services but other industries like manufacturing and construction. As we can see, implementing an automatic inventory tracking and update solution can increase the inventory turns, thereby reducing the capital requirement. Using QR Codes and barcodes can regulate the tracking of inventory goods in store and in transit.

In its current state, on-demand laundry service is quite a manually managed and fragmented market and offers huge opportunities for new businesses to create a niche. One can offer doorstep service and provide better garment care, eliminating the need to locate in prime areas and reducing capital requirements. One can use high-quality laundry products to clean delicate fabrics, maintain hygiene, and extend the life of the fabrics. The ability to maintain hygienic conditions counters the increasing prevalence of skin diseases such as rashes and allergies, which is yet another reason for its growth. The possibility of global scalability without receivables issues is a compelling business proposition.

Ownership of, or association with a certain kind of brand has long been seen as a reflection of one’s identity – whether it’s a car, a phone, club membership or a watch. Fashion brands which encompass personal effects such as clothes, jewelry and accessories are best reflective of one’s personality and even status. In the world of fashion, there is clearly a ‘class divide’ among mass and luxury brands. While there are strong brands with tremendous equity among their target audience in mass market too, what differentiates luxury brands are the experiences they offer, the scope for self expression offered by the brand across touch points and the emotional connect all of these evoke. Hence, the design of digital experiences in this category – beyond just ‘look & feel’ plays a critical role in delivering the brand edge.

Physical or digital: it’s all about the experience

In retail, it is common to list the three most important aspects of success as ‘location, location, and location.’ It is a tongue-in-cheek way of emphasizing the importance of visibility. In the case of luxury fashion brands it can be interpreted as the company a brand keeps – as reflected in such brands choosing a brick & mortar store in the most upscale of malls or localities. The Apple Store is always at locations considered to be the most exclusive location in a city (as in the Fifth Avenue in New York city, Regent Street in London or the Dubai Mall in Dubai) or the most ‘coolest’ one (such as the Grand Central Station in New York). Angela Ahrendts, Apple’s former SVP of Retail said, “We want to be more like a town square, where the best of Apple comes together and everyone is welcome”.

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In Paris, the Triangle dOr is a fashion district where Avenue Montaigne, Ave George V, and Avenue des Champs-Élysées have outlets of several luxury brands. Such efforts help in creating an air of exclusivity – cueing that these brands are for a select, affluent few. But beyond location, successful brands in luxury fashion make the destination an experience to cherish. It could be through the décor, display of merchandise or the personalized customer service.

In the digital world, there are certain points of difference compared to traditional retail. Firstly, a website or an app can technically be accessible to everyone. Second, luxury fashion brands have the scope to be seen in the vicinity of mass market brands in platforms such as Instagram. Earlier, a print ad for a Rolex or Chanel can be shown only in a certain kind of magazine. But in the digital world such ‘gated’ experiences are not always possible in a consumer’s social media feed. Hence, the experience at every touch point in the digital world has to be carefully crafted to match the brand values and exude an air of exclusivity.

Moreover, in the digital world upmarket brands were targeted more at an older demographic. However, the new luxury buyer is younger and savvier than ever. The common thread is that experience matters – be it seamless discovery on the website, a personalized shopping experience in an app or initiatives which satisfy the need to indulge in immersive experiences. Another common factor in these initiatives is the use of a range of emerging technologies.

H&M, the European fashion brand, has launched an immersive experience in the metaverse through online gaming platform Roblox. They have created H&M Loooptopia, which lets players design virtual garments and interact with fellow designers.

Nike, the world leader in sportswear has reinvented itself as a digital-first, D2C brand. After acquiring the NFT platform RTFCKT, Nike is targeting the Web3-curious audience, who can not only buy Nike NFT shoes and apparel, but also co-create designs and share Nike’s revenue using blockchain. And if there was a doubt about how this adds to the bottom line, consider this – a pair of Cryptokicks (virtual sneakers) designed by artist Takashi Murakami was bought for $134,000.

Artificial Intelligence has found use in analyzing customer data to improve personalization and the shopping experience aside from being useful in inventory management and forecasting trends. Virtual and augmented reality technologies enable several clothing, furniture and eye-wear brands offer virtual try-ons both at the physical store and on their website & apps.

Fashion as self-expression in the digital world

In March 2022, brands such as Dolce & Gabbana and Tommy Hilfiger took part in the Metaverse Fashion Week hosted by Decentraland. Gucci launched Gen Z-focused platform Gucci Vault where it plans to host immersive experiences in the metaverse.

The intent is to enable consumers to explore and buy physical and digital goods. Consumer interest is apparent: new report from BoF Insights reveals that: approximately 70 percent of US general consumers (Gen-Z to Gen-X) rate their digital identity as important and 50 percent are interested in purchasing a digital asset in the next 12 months — whether a digital skin or other item in gaming, digital fashion, digital avatar and/or an NFT. Another survey, found five primary reasons why people buy digital fashion: for its long-term investment potential, to feel a sense of belonging, to access a particular brand through ownership, to kit out a virtual avatar and, finally, to be able to create a sense of self in a virtual setting.

In the recent past, ‘brand purpose’ has become an important aspect to consider for enterprises. It refers to a higher-order purpose for the business to exist and often involves association with a cause with a do-good benefit to society. A major trigger for such comes from the belief system of millennials and Gen-Z generation. In fashion too, younger consumers seek brands with cultural credibility. The manifestation is in seeking luxury brands that are timeless, build emotional connection, be worn by opinion leaders and by consumers’ social circles, and have social responsibility.

When crafting a digital experience, brands must take cognizance of these tenets in order to create affinity.

‘Engineering’ emotions: at the intersection of tech & design

Steve Jobs famously said that ‘Design is not just what it looks like and feels like. Design is how it works’. A design system is made up of colors, typography, iconography and the tone of voice in which a brand wants to have a dialogue with the end user. It becomes extremely important to achieve the right balance of all of the above to in order to make everything ‘just work’. Typography plays important role in such premium experiences. Different fonts and font sizes can bring the look-feel and help in highlighting the most important statements. The rule of thumb here is to not exceed two fonts and six font weights. Along with the fonts, the copy needs to be crisp, meaningful, contextual and owing to the tone of voice for consistent experience throughout.

Other notable aspects of luxury fashion is creating a sense of mystique around the brand
– an aura, as it were, to make it more appealing. In every decision we take is driven by the emotional brain, though many believe that it’s the rational brain which guided them.

Evoking the emotional appeal is even more important with luxury fashion as very often it is an irrational purchase. One may wonder at the reason-why some pay an exorbitant amount for a watch when what it does – display time can also be done by a far cheaper brand. But as we said earlier, a mix of reasons are at play – a display of one’s self-identity, self-worth and an expression of one’s style.

Copywriting for websites or UX writing for mobile apps have to account for such nuances in luxury fashion. Richard Mille, an upscale watch describes itself as ‘A racing machine on the wrist’. It is not an ordinary watch but describes itself as: ‘Diminutive marvels of technology, painstakingly produced in limited quantities, Richard Mille timepieces are designed specifically for those with a true appreciation of fine watchmaking’. Its heritage is eloquently brought alive with this statement:

‘The brand has one foot in the 19th century—because we are faithful to the great Swiss tradition of horology, with extremely complex movements assembled and finished by hand—and the other foot in the 21st century.’

~ Richard Mille

Larger grids and compelling visuals evoke a craving in us.

Even what is considered to be mundane – the product description has to be written in a manner that justifies or feeds the rations brain even though the purchase maybe simply led by ‘I want it’ feeling. A product description from Dolce & Gabbana bag says:

Iconic style is being given some contemporary edge, creating a new vision of the brand’s signature aesthetic. Defined by its refined geometric lines, this new medium shopper pays tribute to our Logo, the undisputed star of the new collection. Practical and spacious, it comes in 100% calfskin and features the quilted 3D-effect DG logo.

Keeping the user journeys short and simple is another aspect that designers should focus on. Menus in the navigation should be minimal and user journeys have to be designed in such a way that within not more than two clicks a user should be able to achieve the desired task.

In sum, crafting digital experiences for any brand is about understanding the consumer needs and making their lives simple – allowing them to complete their tasks intuitively and seamlessly. In the case of luxury fashion brands, the exclusivity factor is an important one to consider along with that of individual expression. Hence the coming together of design, copywriting, visual imagery and tech has to be evolved, sophisticated and compelling to drive a strong brand affinity.

In his book, ‘Measure what matters’, the venture capitalist John Doerr said famously ‘Ideas are easy. Execution is everything’. In business, last mile delivery of virtually any idea, especially in services sector is akin to getting the execution right. In retail, it is even more critical as it refers to the last leg of a package’s journey; from the time it is picked up at the transportation hub to when it reaches the customer. We can say that while first impressions matter, this is a powerful moment for brands to make a lasting impression. Not surprisingly enterprises are betting on last-mile delivery to be quick, smooth, and as frictionless as possible.

As online buying continues to boom, the environment is one of intense competition. Exclusive offers, online buyer engagement, delivery times, and easy returns are important differentiators and factors influencing customer loyalty. That’s why a streamlined and cost-effective delivery process can promote brand affinity and become a business edge.

Tech that collaboration

Technology is the fundamental enabler of this entire last-mile segment, now an industry of its own. Estimated at USD 40.5 Billion in 2021, the global last mile delivery market is predicted to return revenues of USD 123.7 Billion in 2030.

In every delivery aspect of e-commerce, technology is already bridging the demand-supply gap between the seller and buyer through innovative solutions and services. For instance, specialized and affordable, online, on-demand services like Postmates, Deliveroo, DoorDash have truly gone the extra mile to help smaller, local retailers in overcoming the delivery limitations of global logistics giants such as UPS and FedEx.

Technology interventions also enable opportunities for retailers to experiment with delivery models, innovative solutions, and collaborations to create market differentiation and optimize costs. When fast-food chains like Domino’s and McDonald’s built in-house delivery capabilities, they turned to technology to orchestrate online customer experience, automate order taking, and coordinate driver delivery, giving them greater control over the delivery experience. Emerging technologies continue to redefine the last mile segment, offering businesses new ways to evolve all the time.

Here are some innovative technology solutions that truly stretch the possibilities of the last mile for ecommerce players and delivery service providers:

• Drones complement autonomous delivery modes

The use of drones to deliver packages has immense potential to solve last-mile reach and challenges of speed and cost, while also offering an environmentally safe and sustainable option to ground-based delivery vehicles like trucks or cars. In 2021, retail giant Walmart partnered with DroneUp, a global leader in drone technology, to launch multiple airport hubs that would cater to delivery on demand. Today, Zipline’s drones drop off medicines and healthcare products in parts of the US as well as the remote corners of Ghana and Rwanda.

• Bots which help buyers

While home delivery bots are not yet fully autonomous, they are drawing a lot of investor attention. Starship Technologies is one example; the company uses self-driven delivery bots that can cover short distances, moving at pedestrian speed to deliver parcels, groceries, and food. They have successfully fulfilled millions of orders around the world without human intervention. Domino’s partnership with robotics company, Nuro is another example where bots deliver pizzas.

• On-the-go traceability and route optimization through GPS

GPS technology has been the foundation of the last-mile delivery segment. Using GPS tracking for customer orders not only helps the retailer/fleet service provider track the number of orders out for delivery but also optimize the number of drivers deployed, chart faster routes and service pending orders. In fact, driver management and route optimization by robust algorithms are making a huge difference in improving operational efficiencies and reducing fuel consumption. A delightful benefit of tracking technology is that customers are able to see where exactly their order is, and delivery staff can coordinate directly, reducing the load on operations teams and customer service. Static optimizers which create one-time optimal routes for delivery can become ‘dynamic’ by taking into account real-time traffic scenario of the area and re-adjusting the route.

Technology is set to play an even bigger part in transforming last mile delivery

While millions of stores have rapidly adopted technology, they have not completely eliminated last-mile challenges like cost and process inefficiencies. Traditional retailers need to make additional investments to match up to the popularity of direct-to-consumer brands who have ready access to mature last-mile solutions and logistics service providers.

They need to choose from the wide array of technologies available to them, to understand the capability and benefits, as well as the integration, scalability and security challenges of each.

Besides GPS, which is the backbone of last mile delivery to customers, it’s also important to integrate technologies that link up the warehousing and storage aspects with the delivery to customer service sector.

Like the RFID tags popular in warehousing for tracking inventory, barcode and QR code are set to play a key role in last mile delivery wherein the delivery person scans the code that sets off a notification and status update corresponding to it. Feedback links can be sent to the customer so that they are fully engaged during the last-mile journey of the package.

Sensors are proving to be a cost-effective means to are being delivered. They can also be strategically used in automating certain processes of warehouse management, which is now a critical area as retailers scramble to fulfil reduced turnaround times.

Using GPS live tracking for customer orders will not only help the retailer/fleet service provider track the number of orders out for delivery but also optimize the number of drivers deployed and available to service pending orders. Here too last mile fleet solutions like GPS and Google Maps Platform are helping ensure the end-user is able to track and review the last leg of order fulfilment.

Technology is also available to help the system to accurately pick the item from the nearest store in which it is available thus speeding up the process. These include pick indicator systems, which could be voice- or light-operated that locate the item and apprise the system accordingly. Smart glasses like the ones offered by Google Glass are making their way into warehouses helping operators locate, pick, and place the item(s) for delivery.

Last mile delivery software and cloud capabilities embedded in shipping will help optimize routes and direct delivery operators with updated information and maps throughout the journey. The software eliminates guesswork by mapping routes based on actual data of traffic jams, road repairs, detours, weather forecasts etc. and thus, averts stressful traffic situations and delays for drivers.

Designing the UX for the last mile in retail needs business insight and user contexts

The ecosystem of the last mile is like the players of a complex symphony in which technology plays the role of an orchestrator – bringing together the warehouse, the products and inventory, the delivery staff and the customers. It unifies and coordinates the roles of different players who come with deep understanding of their specific domains and processes. Therefore, designing any application in the last-mile must draw from the needs of the multiple users – the warehousing staff, fleet operators and drivers, delivery staff, customer service staff and of course, the customer.

To start with, they’ll need to design apps and websites that have the right architectural framework, audience connect and personalization with end-users, and integrate seamlessly with last mile delivery platforms and warehousing. Like ecommerce giants such as Amazon, Walmart, Alibaba, and Otto, they must capitalize on technological advances to enhance the overall customer experience and secure their brand loyalty.

Here, thoughtful design that draws its information from technology, can play a crucial role in addressing changing expectations and needs of modern buyers while ensuring the last-mile-delivery platform is set up in a way that facilitates fast, frictionless, and enduring experiences.

Typically, last mile delivery can be split into four main stages based on which design of the user interface can be developed by strategically thinking and mapping the various aspects and requirements of each stage.

Stage 1: Goods are picked up from the warehouse based on order requests that need to be delivered to the end users.
Stage 2: Routes are optimized, and delivery personnel allocated to fulfil the order.
Stage 3: Tracking of orders to avert any losses along the route.
Stage 4: At the drop location, the fulfilment of order needs to be verified.

At each stage, design thinking uses insights from technology to play an important role in ensuring seamless and smooth order fulfilment. At stage 1, for example, it needs to pivot around aspects such as:

• What is the type of delivery?
o Regular
o Refrigerated – medicines, blood, organs, food perishables- end to end cold chain

• What are the possible delivery methods?
o Delivery person/van/bot
o Drones (remote places, urgent deliveries, small payloads)

• What are the delivery options?
o Home delivery
o Kerbside delivery
o Pickup at nearest showroom/center

At stage 2, specific design considerations must be made. One essential design feature is for checking the end user’s availability at the time of drop so that the delivery route is worked out based on availability.

At stage 3, the tracking feature must be embedded in the design to ensure the delivery proceeds as per schedule and any changes or detours are noted, and updates are provided to the end user accordingly.

At stage 4, design needs to consider the delivery option chosen. For example,
• In case of kerbside delivery, the facility to generate a QR code must be embedded so that items can be matched with the customer’s details.
• If C.O.D is included, then a feature to collect inputs on the customer’s availability must be included.

The technology behind last mile can be anything from autonomous delivery modes using robots, drones to big data analytics and forecasting using IoT systems, connected vehicles, sensors, and even smart dust. All of them want to remove any cause of friction, delays, and unnecessary expenses in this all-important phase of delivery.

With thoughtful design, countless innovation possibilities unlocked by technology will come alive for ecommerce businesses – from industry leaders to freshly sprung entities. And so, they can aspire to breach the last mile while guaranteeing the last impression of the brand is as good as the first.

Fast & Furious. It is not just a reference to the famous franchise, but a principle the time-scarce millennials today live by. Whether it is content to be streamed, coffee or noodles – everything must be instant, and the sooner it is, the more appreciated it is. The latest to join this trend is Q-commerce, promising to deliver customer delight in 30 minutes or less.

Valued at around USD 20-25 billion in 2021, the quick-commerce industry is expected to grow to USD 72 billion by 2025. A major contributing factor for this is the ongoing pandemic, which has not just fast-tracked digital transformation by decades for businesses, but also altered consumer behavior, a shift that will stay for years to come. Consumers who were earlier willing to step out and visit their neighborhood mom and pop stores or malls now prefer to stay home and be served. Add to this the work-from-home lifestyle for the busy professionals and the concerns of the aging population to step out, the consumers today are willing to pay a higher price for on-demand instant delivery. As shifts like urbanization, rising disposable incomes and single households continue to grow, this number will only multiply.

Beyond US, quick-commerce is a global phenomenon. According to a report, 30 new quick-commerce companies have emerged in ten months in Western Europe alone. Berlin-based Gorillas became the fastest company to achieve unicorn status in Europe – just nine months into launch. In India, while existing delivery startups are overhauling their operations & supply chain to cater to this segment, specialty players are now targeting this segment, with a promise of 10 to 15-minute deliveries. A consumer tweeted that a brand delivered groceries in unbelievable 2.5 minutes – which was then used on its billboard.

The Q-commerce ecosystem consists of:

Third-party delivery platforms: existing delivery platforms who deliver items from neighboring retail outlets, usually just fulfilling delivery or picking the order. From promising one-day delivery, they have now moved to several hours to 30 minutes or less.

Popular retail giants: both offline and online giants have initiated the shift to an omnichannel experience & Q-commerce with drone deliveries, faster processes

Vertically integrated specialists: These companies create neighborhood warehouses, called dark stores and delivering often-purchased items to shoppers, typically within 10–30 minutes. In India, many of them target the ‘top-up and unplanned purchases’ of Gen-Z and millennials, by solving inefficiencies of the familiar neighborhood store.

With the threat of further lockdowns looming over the consumers, convenience and safety will be paramount, leading to a large influx of consumers ordering online. It will also subsequently lead to more players & investors entering the ecosystem. However, players will be under immense pressure to acquire customers as fast as possible and with low profitability margins, especially on grocery items; this will be a challenging exercise. The key will be to find a differentiation factor outside of similar items, offers and prices for the brand.

Here are some trends apparent in Q-commerce in 2022:

Diversification of inventory: While grocery items today form most of the stock of a Q-commerce setup, the premise of <60 mins delivery can be extended to other categories like medicines, books, food items and even electronics & accessories. With the right infrastructure & logistics, this is a plausible option with startups like Glovo a Spanish quick-commerce start-up, leading the way with electronics & furniture.

Better inventory & supply chain Management: The constraint of a rapid delivery makes inventory & supply chain management an essential part of the equation. The supply & inventory management for dark stores will be more tight-knit in 2022, with the delivery partner able to check in real-time the nearest next store option in case of stock-out. Real-time inventory management tools will have a critical role here- constantly updating the status of inventory, calculating & estimating times for delivery and freshness of products (especially for perishable items) to ensure that the delivery partner does not waste precious minutes figuring this out.

Personalized customer experiences: In a market where everyone has the same inventory, offers, and prices a personalized & seamless customer experience will be the key that differentiates a brand and makes them a market leader. With AI & ML, tailored customer preferences based on past purchases and frequency can be suggested. Personalized messages & notifications can help users feel more connected to the brand and lead to user retention. A distinct UI, intuitive design & hassle-free user journey can also drive retention. For instance, here is how McDonald’s India enhanced their delivery experience & conversion through a revamp of experiences on their website & app.

Brand Partnerships & Influencer-based marketing: Brands have already started to see Q-commerce as an opportunity to get their product to their consumers the instant they think about it. Even premium brands like Estee-Lauder signed up with Uber in 2021 for a 60-minute delivery of their products. 2022 will see a rise of many brands trying this out. Another prevalent trend might be the rapid delivery of brands promoted by influencers

More strategic warehouse hub locations: At the heart of q-commerce lie the dark stores, the mini-warehouses located conveniently across delivery points. The strategic location of various hubs and their proximity to each other can determine the efficiency of the delivery process. AI & ML have a vital role in providing valuable insights about the purchase volumes & values, suggesting locations where a new store can add value.

Sustainability & eco-friendliness: As Sustainability & Net-zero emissions initiatives take global center stage, sustainable options must be chosen in every process. Some low-hanging fruits here can be using eco-friendly or reusable packaging options for delivery and electric vehicles for delivery executives to save unnecessary strain on the environment.

Quick commerce is a great opportunity globally. The right mix of technology, infrastructure and an unwavering focus on customer experience can succeed in this rapidly evolving landscape. 2022 promises to be an exciting watch-fest, with popcorn delivered in 15 minutes or less.

This article was originally published on Forbes Technology Council.

Over the course of the last decade, eCommerce platforms have become an integral part of our lives. In the post-COVID world, they have become almost indispensable and not just for the essentials such as groceries & medicine. Last year, in April, U.S. retailers’ online year-over-year (YoY) revenue growth, went up by 68% According to QuantumMetric, online conversion rates increased 8.8% in February, reflecting a level of shopping urgency typically seen during Cyber Mondays.

The pandemic rapidly changed consumers’ behavior toward online channels, and these shifts are likely to stick even after the pandemic is over. To succeed in this new era of online retail, enterprises will have to shift from an omnichannel and multichannel experience to a customer-centric multiexperience mindset.

 In the new normal creating multi-experiences is an imperative not just for the retail sector but for enterprises across industries.  What this means is retail enterprises will have to move beyond enabling consumers to engage anytime and anywhere to allowing them to interact in any way that is most convenient for them – Srinidhi Rao, Senior Vice President – Solutioning and Account Management

In this article, we will take a look at how the retail sector is evolving and some of the shifts that are enabling the new-age retailers to create customer-centric digital experiences for the experience economy.

The rise of experiential eCommerce for the experience economy

Experiential retail is a term that has gained popularity in the past few years. It enables eCommerce platforms to create an engaging in-store shopping experience – virtually. Experiential retail helps retailers to:

1. Engage buyers via an immersive and shareable experience
2. Prioritize customer engagement—not sales
3. Experience in-store online
4. Create experiences that not only addresses consumer-specified needs but their latent needs

Augmented Reality has been an enabler in the shift towards experiential retail. AR is not just a vanity technology but also helps shoppers make a purchase decision. Take for example in apparel and fashion, one of the main impediments to online purchasing has historically been the inability for customers to see how items would look on themselves. Jewelry brand Kendra Scott is tackling that problem via their platform, Virtual Try-On, which uses augmented reality (AR), machine learning, and computer vision techniques to enable customers to try out items from the comfort of their home.

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Shopify, which allows its merchants to add 3-D models to their product pages, found that conversion rates increased by 250% when consumers viewed 3-D products in Augmented Reality. We MakeUp, the Italian cosmetics brand, created an AR filter on Facebook that allowed users to ‘try-on’ different shades of its lipstick. Users could find their perfect match which increased order placement percentage

Burrow, a DTC furniture brand, is using AR to help customers visualize how their couches will fit in their living rooms. Eyeglass maker Warby Parker is playing in the AR space, allowing people to see what a pair of glasses looks like on their faces before making a purchase.

At Robosoft, we worked with a leading American kids’ retail store to create an engaging digital experience for kids with exciting games, quizzes, stop-motion videos, and interactive AR-based shopping experiences. The app allowed kids and parents to scan in-store items & book pages and experience a game or video experience, get 360-degree views, bring characters to life, and take selfies.

Livestreaming is another trend that the retail sector is leveraging to offer an engaging experience to shoppers. Recently, Nordstrom unveiled its Livestream Shopping channel. Klarna, the payments platform partnered with Cosmopolitan Magazine to host its second “Hauliday by Cosmo x Klarna,” a virtual shopping holiday event in the U.S.

In one of our earlier articles, we outlined how the retailers are benefitting from the rising adoption of video streaming and OTT.

Shift towards niche marketplaces and brand exclusive eCommerce platforms

While the aggregator eCommerce platforms have had success in the recent past, the preference for direct-to-company brand stores is rising. Retail brands see increasing merit in building their own eCommerce platforms. Nike is focussing on its direct business to increase sales from its own website.

In January last year, Ikea said it would be moving away from selling on aggregators – a move which was also taken by retailers like Birkenstock and PopSockets. One of the major reasons for this shift is maintaining brand reputation. According to this CNBC report, Birkenstock’s decision of moving away from an aggregator platform was due to the large number of counterfeits and unauthorized sellers, which it felt had the potential to jeopardize the brand.

We are already witnessing the emergence of niche marketplaces such as Mamoq, ASOS, etc. These marketplaces offer niche product categories like fashion and apparel, vegan and organic products, designer decor, and more. According to a McKinsey report, 35 percent of consumers shop at niche marketplaces, especially for apparel, sneakers and other footwear, and home products.

The reason why retailers are establishing their own Experiential e-commerce platforms

Retailers can offer an experience in line with their brand and create a stronger brand loyalty among their consumers

• Consumers get access to a select range of products and services.
• Consumers get guaranteed authenticity of a product or a service and no product is sold by multiple sellers as it is on an aggregator platform.

Hyperlocalization for customized experience

According to a Salesforce study, more than 75% of customers expect companies to understand their needs and expectations and offer personalized experiences. One of the ways to engage customers today and leverage personalization is through hyperlocalization. This means tailoring the offering of a store to the specific needs of the local customers. However, Hyperlocallization doesn’t mean offering a unique set of products for every location – rather offering a core minimum assortment (CMA) relevant to ‘most’ of the shoppers of that store. 

A hyperlocalization approach includes a wide range of tactics like using analytics to make personalized recommendations, mega brands offering products and services that meet local demand, retailers sending customers localized offers on their preferred channel at the right time (and in real-time), etc. 

Now, more than ever, customers are online with a clear intent. With customer behavior evolving at a rapid pace, personalizing the customer experience via hyperlocalization is increasingly delivering results and gaining traction. Incorporating hyperlocalization into the CRM strategy is an important step toward driving growth and giving your brand a competitive edge.

Leveraging data science and analytics will play an important role in driving Hyperlocalization. This case study outlines how a leading grocery retailer leveraged customer data science to personalize its store and digital experiences and drive a more local, personal, and deeper relationship with its customers. They also Integrated its merchandising analytics with its automated assortment planning technology.

Personalizing shopping experience with Voice technology

In 2017, 13% of all households in the United States owned a smart speaker. That number is predicted to rise to 55% by 2022. A Google report suggests, 41% of people who own a voice-activated speaker say it feels like talking to a friend or another person. Voice Assistants can bring the human factor into the online shopping experience.

Voice search personalizes shopping experiences with the use of recommendations based on individual preferences. For example, if a customer uses AmazonFresh to buy their daily needs and is ordering them through Alexa, the voice assistant suggests items that match their diet, based on the preferences that have been communicated to the device. And if an order has to be repeated, voice search can make the task even easier for the user.

With Voice solutions, it is faster and easier to take reviews and feedback from the customers. Voice search is quick and effective when it comes to typing a query and it can also be combined with other activities like cooking, driving, exercising, etc. Recently, Domino’s pizza rolled out a voice assistant feature Dom for automating pizza orders over the phone to ensure that the process is convenient and quick for customers.  While the customer can place an order in a non-intrusive manner (can take as much time as they want, change orders multiple times without being embarrassed), it saves manpower, increases speed, reduces manual error, thereby injecting increased efficiency in the process.

According to an Adobe report, consumers typically use voice commerce for re-ordering common household goods such as toilet paper and laundry detergent. For visual or more complex purchases like apparel, flights, or concert tickets, people are focussing on providing a superior user experience to accompany Voice Commerce. At the same time, work is on to address privacy and security concerns related to Voice technologies.

Voice user interfaces are not meant to replace the graphical user interface.  Voice complements GUI and is expected to work in tandem. Some considerations to keep in mind while designing a Voice User experience (VUX).

Making purchasing easy on your wallet

E-commerce companies have partnered with Finance companies to offer easy payment options.  As a result, EMI purchase is becoming a norm.

Payments company Klarna partners with retailers all over the world to make it easy to pay. Shoppers can use the Klarna app and get flexible payment options anywhere online.

Targeted marketing for higher response and faster conversions

Direct response to simplify user journeys and avoiding huge advertisement costs

Direct response marketing is meant to evoke an on-the-spot response and encourage a prospective customer to take action by opting into the advertiser’s offer. Through direct response marketing is eCommerce brands can send customers targeted messages that drive specific actions—for example, buy a product, subscribe to a service, purchase a plan etc.

Some key elements of Direct response marketing are:

• Customer Centricity – Addressing a customer problem upfront.
• Personalization and targeting – direct response marketing works best when you have a specific buyer persona in mind
• A clear CTA – Every direct response ad includes a clear call to action, compelling a visitor to do something specific.
• Tracking and measuring – direct response helps to test the scale of consumer responses with a small campaign before launching a full-volume campaign.

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Lookalike audience to expand and reach well-targeted customers.

Expanding the reach of digital marketing beyond the existing customer database with optimal costs and higher conversion is critical for eCommerce platforms to scale-up business. Lookalike audience modeling is a process that can enable that. It involves exposing a small seed audience, known as ‘reference sets’ to the larger universe of data on advertising platforms like Facebook, Google, Outbrain, etc. The attributes of the reference sets are analyzed by the Machine Learning algorithms of these platforms to create a larger dataset that is most relevant to the business.

Some efficient ways of choosing a seed audience for creating lookalike audiences for eCommerce can be based on:

• Customer’s LTV – This tactic involves taking picking the dataset of existing customers with the highest lifetime value and use them as a lookalike audience seed. It will help in creating an audience that is likely to generate higher conversions.
• Customers’ purchase behavior – creating separate seed audiences for different categories of purchase. For example, for a pharmacy store selling both OTC medicines and bodybuilding supplements, segmenting these product categories into separate lookalike audiences, might yield more results. It will help in presenting the shoppers with ads for products that present a natural continuation of the user journey basis their purchase intent.
• Cart Value – creating a seed audience with customers having the highest cart value may mean expanding the dataset to shoppers who can make high-value purchases.
• Website engagement metrics – website engagement metrics like time spent on site, scroll depth, etc. can be easily measured via Google Tag Manager, with Facebook also offers data about the top percentage of audiences that shared the highest time on the site within their ads platform. This kind of seed audience can help marketers reach out to audiences that are likely to engage with the platform and eventually make a purchase.

Lookalike audience modeling has become a critical tool for eCommerce marketers to scale-up their reach. A recent report by the IAB and Winterberry Group, suggests that marketers want to “prioritize ‘cross‐channel’ initiatives and maintain a focus on the harmonization of audience experiences across media. Lookalike audience modeling is a great way of doing that since it allows to use of data sets from various mediums to reach the most relevant audiences.

Summing it up

The next normal is still taking shape, and customer expectations will continue to shift in response. Customer expectations, maturity of newer elements of digital, appreciation of experiential commerce, all are coming together to shape the next normal in eCommerce.  While digitization is disrupting the retail industry it is the enabler that will help retailers to create digital experiences that buyers seek in an experience economy. Retailers that focus on customer experience, respond with agility and innovation, and create a multi-experience strategy to acquire, engage and retain customers will be able to position themselves as leaders in the evolving turf.