Why do tracking and logistics data play such a big role?

In the competitive world of e-commerce, creating streamlined and cost-efficient processes for both customers and internal teams is essential for brands to keep ahead of the competition.

This is where big data comes in. Analyzing accurate, comprehensive, and standardized logistics data spanning from the first to the last mile allows you to pinpoint weaknesses and strengths in your processes. With full transparency into your logistics data, you can optimize first and last-mile processes and empower internal teams from customer service, to marketing, and - of course - logistics to make the best decisions for your business.

With logistics costs rising and customer dissatisfaction often revolving around post-purchase experiences - surprisingly, 60% of consumers still find their delivery experience underwhelming - data-driven decisions in this field are a vital opportunity for brands to drive cost savings and improve customer service experiences.  

How data can give you an edge in retail and e-commerce

Now that we’ve made such a broad claim on the role of logistics and tracking data, let us give you some tips on how to gain a competitive advantage from this data. 

#1: Use customer tracking impulses to upsell

When e-commerce leaders and marketers think about upselling opportunities, they usually try to improve email open rates and create more customer engagement opportunities. Tracking and logistics data surprisingly deliver on both of these points. 

If you know exactly where your customers’ parcels are, let them know. It will make them happy. Happy customers are spending customers. Ok, it is not quite as simple as that. Let us explain. Customers want to receive accurate, relevant, and timely information about their orders–proactively delivered by the brands they shop with. With the help of tracking data, you can leverage your customers’ excitement to encourage re-purchases through branded notifications and tracking pages. 

Here’s a fact for you: 96% of shoppers actively track the delivery status of their online orders and 43% of shoppers check an item’s order status at least once a day. That creates an additional 4-5 marketing touch points! This makes notification emails not only a way to get information across easily and clearly but also presents invaluable marketing opportunities for generating brand loyalty and upselling with excellent engagement. Complementary products based on purchase history and presented in your tracking emails are always an excellent upselling strategy. And, PS: Tracking emails have a whopping 80% opening rate.

#2: Drive ROI on marketing acquisition dollars

Here’s another surprising effect of getting a grip on your logistics data: Marketers spend heavily on acquiring customers through Google, Facebook, or Instagram ads. Once you’ve spent those dollars, you’d better get some return on your investment. 

If a customer purchased from you and is now hyper-engaged and waiting for their parcel, don’t lose them to carrier websites during this emotionally charged part of the purchasing journey. Instead, direct them to your own branded tracking pages, where they receive all the tracking information they want. Include customer-specific details, the content of their order, and their name, while presenting this information in their language will help give your communications a personal touch that 71% of customers expect from brands. 

Plus you can address them in your brand environment to drive strong impressions and seize opportunities to present complementary products through dynamic banner ads. 

#3: Drive up check-out rates with predicted Estimated Delivery Dates (EDDs)

59% of consumers claim that they attempt to remain home to receive parcels on delivery days to ensure successful deliveries. Not knowing when their orders arrive can be a significant source of frustration for these consumers. 

Accurate EDDs rank higher in importance for consumers than fast deliveries.  They also have great influence over the consumers’ final ratings of their delivery experiences. For domestic parcels, a 4-day gap between estimated delivery dates and actual delivery dates would push consumer ratings below 3 out of 5 stars. Just a 1-day reduction in this delay would increase customer ratings by 1 full star. 

Carrier data, however, can be unreliable and can give customers very wide windows for estimates (with variations of up to 5- 10 business days). Relying on that data is far from enough to meet customer expectations. 

With data from machine learning and AI-supported EDD predictions that are up to 90% accurate, you can help build customers’ trust in your brand. Knowing that their parcels will be delivered by EDDs provided to them at check out will help them push the buy button with confidence. The many moving parts of delivery logistics, from potential warehousing issues to complications in the last mile could potentially render carrier data inaccurate. Good predictions from this data can prove tricky. Hence, innovations in machine learning present more sophisticated solutions for delivery predictions. Leveraging these, brands could assure customers of smooth buying journeys and drive up conversion rates. 

#5: Reduce customer service costs through logistics data 

In e-commerce, it pays to be customer-centric. 43% of consumers report that they shop for other brands after just one negative experience where a brand failed to meet their expectations. Customer service teams are often the last reserve to turn negative experiences into positive brand encounters. But what are your service teams actually doing?  ‘Where is my order?’ (WISMO) inquiries can take up 80%  of the daily call or chat volume of retailers’ service centers. It’s keeping your service teams incredibly busy.

We’ve already pointed out the many advantages of building a refined post-purchase notification and tracking page strategy earlier in this article. This can reduce WISMO inquiries down to 2-3 % as achieved by one of our customers. 

As you can rarely reduce the WISMO inquiries down to zero, you should equip your service teams to reply to these inquiries quickly and effectively. And with a comprehensive overview of all your shipments, you can then build watch lists to predict unforeseen parcel issues and reach out to customers even before questions and frustrations arise. Your customer service teams finally have time to create real value and NPS results will prove it. 

#6 The obvious: optimize your logistics operations

Big data can unlock excellent cost-saving opportunities for your brand on many levels. But the most obvious use case to help you optimize operations is naturally in the logistics field. Costs are rising, the carrier selection process is complicated and customers are seemingly never satisfied with delivery performance and times. So how can you make logistics data work for you?

You should

1. Aggregate all your logistics data and incorporate all carriers you work with.

2. Standardize and normalize logistics data across borders, events, languages, and time zones.

3. Use this data to optimize for best performing carriers and to claim better services from your logistics partners.

Being able to analyze your shipping data and identify which carriers perform best for which types of your shipments in which regions on various KPIs will help you make data-driven decisions. 

Example KPIs for carrier analytics could be:

• Do carriers meet their SLAs? (If not, do you have the data to collect SLA penalties?)

• Which carriers offer the best transit times for which routes and which shipments?

• Where do delays happen? (and can you prove it, for example, through customer feedback?)

A solid handle on your logistics data will also give you greater leverage when negotiating logistics provider contracts, shifting parcel volumes, collecting SLA penalties, and ensuring you receive the best value for your brand. 

Unlocking the value of big data in logistics

The disruptions to the global supply chains brought about by the pandemic have highlighted the need for greater visibility in e-commerce logistics. And standardized data is the key to unlocking this visibility. Not just for updates on parcel locations and whereabouts but also for consumer trends and behavior.  

Data is essential for understanding your consumer needs and helping you craft better buying journeys. In addition, it allows you to communicate more effectively with your customers by identifying the best opportunities and the most appropriate timing to reach out. 

Gaining full transparency of all your logistics data also helps you optimize your internal processes, paving the way for long-term and sustainable growth.

It is increasingly essential to manage the billions of daily data points from logistics, sales, and consumers. Yet, much of that data is incomplete and disjointed across different sources such as languages and market conditions. We need greater standardization of data for interpretation and analysis. Solutions like that of Parcel Perform provide standardized sets of data for the whereabouts of shipments that are easily decipherable and actionable for everyone from the first to the last mile.

Service quality and price competition will be the new emphasis for the next few years. To get ahead of competitors, brands must build solid post-purchase strategies and work with the best data partners that help them use their big data opportunities. With multiple layers of system integrations and rich data insights, we ensure merchants have all relevant data at hand in near real-time.

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