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5 Ways Poor Logistics Services Can Impact Online Business Businesses must remember that it was in the traditional days when all the customers truly paid attention to was the product. However, today, your target audience is looking for more in the form of value-added services

By Saahil Goel

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Regardless of what you're selling, customer retention must be your prime goal. The fundamental objective of setting up any business is to cater to the needs of its customers and increase sales. Speaking of addressing the customers' needs, a lot of other factors, apart from the product, play a vital role.

Businesses must remember that it was in the traditional days when all the customers truly paid attention to was the product. However, today, your target audience is looking for more in the form of value-added services. Apart from other added benefits, one of the key services affecting customer satisfaction is the seamless and timely delivery of products.

Owing to the current pandemic, a majority of businesses are moving towards an e-commerce business model. Coupled with the advent of technology, the concepts of running a business and managing logistics have reached new benchmarks. For instance, a lack of proper shipping can harm your brand's reputation. Studies show that 51 per cent of the users won't prefer doing business with you if they have a negative delivery experience.

Here are some ways in which poor logistics might hit your online selling business.

Adverse Effects of Poor Logistics

Reduced customer loyalty: The effort that goes into acquiring a customer is immense. A case of flawed delivery can wither away everything that you have worked for to build your brand. For instance, if the product reaches the customer much later than the expected delivery date or in a damaged condition, you may lose their loyalty towards your business. There is a high chance that the same customer will not place an order with your online store in such a scenario.

Negatively affects brands image: Brand image plays a crucial role in the success of any business as it differentiates it from its competitors. Some of the fastest ways in which a brand's image is established are word of mouth and online reviews. Reports show that over 90 per cent of people rely on reviews posted online before they purchase a product or avail a service. And feedback from an unhappy customer can negatively impact the brand reputation. Negative publicity of your e-commerce business can drastically reduce the number of customers placing orders with you.

Overall increased costs: Your customer will return the product if it is delivered to them in a defective/damaged condition. In case the business follows a no-refund and no-exchange policy, you may have to compensate with a new package. Furthermore, one can witness an increase in the logistical cost, as well. The cost incurred by the firm in sending new products, the return logistics, and managing the damaged products will add to the overheads of the business, consequently.

Excessive pressure on the customer support team: You'll see dissatisfied customers if the products are either delayed or damaged due to bad logistics. This, in turn, will increase the pressure on your sales support team, considering that they will be expected to handle each and every customer grievance and query to manage the online reputation of your brand. The more this army of dissatisfied customers will increase, the more pressurized your customer support team will feel to pacify them.

Negative online reviews: Social media is omnipresent in today's times. Around 93 per cent of the users check the online reviews of a website or a business before placing their orders. Nearly 80 per cent of customers don't make the purchase if they find negative reviews about the company. Poor logistics may result not only in negative word of mouth publicity but also in negative online reviews. Always keep in mind that the customers are quick to share reviews online regarding the products and services being offered by a seller.

Logistics is the backbone of any online selling business as it bridges the gap between the customers and the company by ensuring timely delivery of the products. Inefficient logistics not only reduces customers' loyalty but also puts a dent in the firm's online and offline image. Moreover, it adds to the overall cost incurred by the business in serving its customers. Thus, apart from ensuring innovative products, businesses should also invest in robust logistics and fulfillment facilities for greater customer retention.

Saahil Goel

CEO and Co-Founder, Shiprocket

Saahil Goel is the CEO and co-founder of ShipRocket (BigFoot Retail Solutions Pvt. Ltd.)

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