The world of retail has been in a state of constant turmoil for more than two years. As the pandemic shuttered storefronts, businesses scrambled to find ways to serve their customer base and keep the lights on. Turning to technology, retailers began dumping millions of dollars into their online stores hoping consumers would continue with their spending habits.
For the most part, purchases did indeed continue as eCommerce soared. However, as time wore on, customers began becoming impatient, waiting for their products to arrive. With in-store shopping limited globally, an obscure solution, aptly named “curbside pickup,” was about to have its day.
From Curbside to Inside
Before the pandemic began, only 4 percent of retailers offered curbside pickup, a service where store employees walk goods purchased online to the customer’s vehicle. Today, that number has surged to more than 58 percent. However, as communities began opening up, the cost of maintaining curbside pickup has become unsustainable.
On the other hand, the consumer has become enamored with the ability to order online, hop in their vehicle, and pick up their purchase without wandering the store. A behavior that is likely to stick. In fact, a recent survey suggests that 85% of consumers plan to continue or even accelerate their shopping habits that changed during the COVID-19 pandemic.
To offset the cost of curbside delivery, retailers began urging consumers to utilize buy-online-pickup-in-store services (BOPIS) instead. BOPIS became the preferred online order delivery method for retailers as labor costs associated with in-store pickup are significantly less than curbside.
The problem? Retailers have difficulty keeping up with the demand for their BOPIS service. The results are long wait times and inconvenienced customers. Worse yet, studies show that upwards of 56 percent of shoppers have encountered major problems in stores when picking up their online purchases. Consumer confidence levels in BOPIS are waning.
The Importance of Loyalty
It cannot be overstated enough how important customer loyalty is to a retailer’s bottom line. The return customer is the heartbeat of consistent year-over-year revenues. Therefore, even the smallest reduction in your customer base will have a significant impact on your bottom line.
Just consider the following impacts loyalty has on businesses:
- A 5% increase in retention equals a 25% increase in profit.
- Loyal customers will spend 67% more than new customers.
- 50% of loyal customers leave if a competitor better satisfies their needs.
Finding ways to reduce friction between all aspects of the consumer’s buying journey is key to developing a loyal customer base. While it all begins with a brand’s initial marketing strategy during the acquisition phase, a poor customer delivery experience will quickly derail a company’s efforts to satisfy its expectations.
How Parcel Lockers Increase Customer Loyalty
You may be thinking the benefits Smart Parcel Lockers bring to the table is their ability to allow customers to pickup and return purchases at their convenience. And you certainly would be correct. However, as the pace of locker adoption accelerates by both retailers and consumers, their utility as a unique service offering dwindles.
Simply offering a Smart Parcel Locker solution is no longer enough to create a wedge between you and your competitors. In fact, consumers are expecting retailers to meet their desire to have complete flexibility in how, when, and where they pick up and return products. The result is that Smart Parcel Lockers are fast becoming a required channel of distribution.
However, the increase in Smart Parcel Locker use presents a substantial opportunity to grow loyalty among consumers. Coupling technology with strategic marketing initiatives, brands can leverage lockers by:
- > Tying your rewards program to encourage locker utilization
- > Promoting products by offering samples in-locker at pick up
> Using lockers for special giveaways to thoroughly delight customers
- > Offering special in-store discounts to drive foot traffic at the time of pickup
Consumers crave positive experiences. Smart Parcel Lockers by themselves are able to provide a little bit of magic in someone’s day. Adding to the experience with reward points or special in-locker surprises will turn a magical event into a memorable one. And that is where loyalty is created.
From the retailer’s perspective, encouraging Smart Parcel Locker use provides additional benefits beyond creating loyal customers. For example, consumers choosing pickup in locker over traditional delivery lowers your per-package magins. Additionally, if returns are accepted in your locker, you create a frictionless experience while simultaneously lowering labor costs currently tied up in staffing customer service counters.
Maximizing the Potential of Parcel Lockers
Smart Parcel Lockers offer a myriad of benefits to retailers and consumers. Not to mention, they are good for the environment by eliminating unnecessary last-mile delivery by couriers. Their potential to deliver much more than just products and packages is beginning to unfold.
The days of simply being a convenience are evolving into becoming an integral part of the retailers’ long-term marketing and logistics strategy. Offering Smart Parcel Locker solutions is no longer about who is offering them as a consumer option, but whether you are doing it better than the competition.
To learn more about how your business can maximize smart lockers to reduce cost, increase revenue, and delight your customers, contact the ParcelPort team online by visiting www.theParcelPort.com or calling 1-800-818-0870.
“Report: 85% of consumers will continue pandemic shopping behaviors this season,” 2021, RetailDive
“Despite Explosive Growth in E-Commerce, Retail Still Needs Brick-and-Mortar Stores,” 2022, TotalRetail
“Perspectives on Retail and Consumer Goods,” 2020, McKinsey & Company
“42 Interesting Customer Loyalty Stats,” 2020, Hubspot