Logistics Problems that Online Stores Face in 2023-2024
As eCommerce grows with the ever-evolving digital landscape, entrepreneurs like Wura find themselves navigating the exciting world of online retail.
Wura's journey started with making handcrafts for her friends, later blossoming into a thriving online store with customers nationwide. But with growth comes challenges, with logistics being her top challenge.
Some customers had complained of receiving damaged goods which took longer than expected to be delivered. This was a case of bad press for her business, and she knew needed to find a solution.
Like Wura, many entrepreneurs are faced with seamlessly bridging the gap between getting their goods to the customers waiting eagerly to receive them. But logistics can become a tough nut to crack between all of these.
This article will cover some logistics problems online stores face in 2023- 2024 and how best to overcome them.
E-commerce and its Growth
Electronic commerce (eCommerce) is the buying and selling of products on the Internet. With it, buyers and sellers can conduct business transactions online, including browsing through product catalogues, selecting and paying for those products, and getting them delivered to the buyer.
In recent years, online stores have experienced rapid growth, which has been influenced by factors such as the internet, the use of mobile devices and the ease and comfort of online shopping. Also, the COVID-19 pandemic and the lockdown of 2020 were other factors that contributed to the growth of online shopping as people had to turn to it to meet their needs as they kept to the lockdown rules.
Importance of Logistics for Online Stores
Logistics is very important for online businesses. This is because it involves sourcing and transporting products to ensure they get to customers who ordered them. They can make or break an online store, and here are some reasons why:
Customers expect their products to reach them in record time and perfect condition. If it doesn’t happen, they will most likely shop elsewhere. A good logistics process can help these customers get their goods on time, influence their overall satisfaction and contribute to a good customer experience.
Proper logistics helps you to manage your business inventory effectively. With it, you can avoid overstocking and understocking and manage inventory levels to ensure products are always available and ready to be delivered.
Your online stores can reduce costs with an efficient logistics system. Inventory management and transportation costs can be reduced, helping you maintain competitive pricing.
Online stores with efficient logistics systems can offer faster delivery, more delivery areas, options, and fair pricing. This helps them attract customers and gain an advantage over their competitors.
With efficient logistics, your online store can reach a wider audience, helping your business gain more market share and revenue.
Common Logistics Problems Faced by Online Stores
As eCommerce grows, it comes with many problems for businesses operating on the Internet. Some of them include
Shipping Costs and Complexities.
One of the recurring problems online stores face is shipping costs. The cost of transportation from the warehouse to the customers' destination can affect the business's profit margin, making it difficult to offset certain costs whilst maintaining a profit.
Also, the package dimensions, weight, destination and shipping method can equally impact shipping costs. It is important to note that different carriers will have different rates, delivery times and certain restrictions, making it essential for online store owners to find a balance between shipping cost and top-notch service.
Inventory Management and fulfilment.
Part of being an online store owner is balancing the inventory levels to ensure that products are available when needed while minimising storage costs. Higher stock levels can lead to higher storage costs and tie up valuable capital that would have been meant to expand the business. In the same vein, having stockouts can lead to inadequate order fulfilment, causing customers to be dissatisfied and eventually leading to loss of revenue as they’d go somewhere else to shop
Returns and Exchanges.
In 2007, the Harris poll showed that 91% of customers consider a store's return policy before buying. Additionally, a poll by Navar shows that 95% of online shoppers will turn to repeat customers of a store if they have a good return policy.
Return is the “new normal” for customers, and online stores have to deal with this as a logistics problem. Every online store should have a good return policy, as the absence of it means a decline in new and repeat customers.
Delivery Time and Reliability.
Delivery is an essential part of running an online store, and customers have delivery expectations which must be met. For them, delivery time has to be swift, as it will influence their satisfaction and repeat purchases. For example, a bad delivery experience with a vendor has stopped me from making additional purchase orders. I do not trust that my item will be delivered when I want it delivered. They’ve lost a customer in me, and I wonder how many more people feel like I do.
Effective customer support is needed to address any issues that may arise from logistics. Issues must be resolved, messages must be attended to promptly, and updates must be provided to assuage agitated customers. All of these can be overwhelming and can be a problem if not properly handled. This is because it leaves customers with the mindset that “they failed to deliver what I wanted, and the customer support is even very bad.”
Impact of Logistics Problems on Online Stores
The problems listed above have real-life consequences on online stores, which include:
Negative Effects on Customer Satisfaction and Retention.
When delays happen in delivery and orders are not properly packed or get damaged in transit, it causes frustration in customers, and this might eventually stop them from buying from your online store.
Financial Costs and Losses
Logistics problems can lead to higher shipping costs, which may eat into profit margins, causing your online store to run at a loss. When inventory levels are not effectively managed, it could lead to higher storage costs, tying up capital and even losing out on sales due to stockouts. Also, when returns are high, it requires extra costs to process them and eventually restock.
Damage to Brand Reputation and Image.
The 21st-century customer quickly expresses their displeasure online, causing bad press for your business. When logistics is a constant problem for your online store, the perception people would have of you is that of unreliability. And if your business is seen as unreliable, it would take more than PR to fix. All of these problems can equally make you lack a competitive edge.
Solutions and Strategies to Tackle Logistics Problems
Partnering with Reliable Logistics Providers
Partnering with a reliable logistics provider will have your products delivered to your customers on time and in perfect condition, solving customer dissatisfaction. This logistics partner should have the expertise, experience and equipment to handle your delivery needs, so you must research properly before choosing one.
When choosing a provider:
- Look for a track record to ensure they are reliable and trustworthy.
- Look out for their coverage area to ensure they can reach your customers domestically and internationally.
- Also, ensure they can offer customised solutions tailored to your needs.
Utilising Technology And Automation For Inventory Management.
Businesses around the world are now utilising technology to manage their inventory. This helps to provide real-time data, helping you avoid overstocking and understocking. Some of these technological advancements equally perform data analysis so you can see your most sought-after products, making it possible always to have them in stock, automate the inventory management process and reduce errors.
Offering Flexible and Convenient Return Policies.
A good return policy can influence the number of repeat customers you have, boosting customer retention. Your return policy should be communicated from the start so customers know what to expect when returning an item. Your return policy should cover
- Items that can be returned.
- Items that can be exchanged.
- Non-refundable items.
- When items can be returned (3 days, 7 days, 30 days, etc.)
- Condition in which they can be returned.
Here’s how you can write a return policy that communicates to your customers what they can expect.
Providing Accurate and Transparent Delivery Tracking.
Transparency in the delivery process can help build customer trust. Customers want to know when their orders will be delivered, if it’s already on the way, if there’s a delay in the delivery and whom to contact in case of such delays.
Swift delivery with Heroshe
In overcoming the logistics issues you might encounter as an online store owner, Heroshe is your needed buddy. With Heroshe, you can get items in the UK and the USA to Ghana and Nigeria within record time, helping you deliver to your customers in record time.
Affordable Shipping Rates.
For just $8 per pound, you can ship items from your favourite stores in the UK and USA. This is less than traditional shipping fees, opening you to a world of possibilities.
Speed is synonymous with Heroshe, and you can get your items delivered in 7-10 working days, eliminating the need to wait for months.
No Extra Fees.
Using our shipping calculator, you can calculate your shipping costs and know firsthand how much you will pay.
Create an account to join the businesses enjoying the hassle-free delivery Hersohe provides.
To conclude, the logistics problems that online stores face in 2033 and will face in 2024 are intimidating but not impossible to overcome as businesses employ innovative technological solutions, reliable delivery options, favourable return policies, and even real-time tracking. They can overcome their logistics challenges, satisfy customers, and reduce costs.
However, online stores must stay up-to-date with the latest developments in logistics technology and adapt their operations accordingly. By doing so, they can remain competitive in the ever-evolving eCommerce landscape and continue to thrive in the years to come.
And not to forget that with Heroshe, love, and swift delivery, promoting customer satisfaction is possible.