How to Ace the E-Commerce Strategy: Insights from Richard Lim
In today's digital age, mastering the art of e-commerce has become essential for businesses to thrive in the competitive online marketplace.
To shed light on effective strategies that can lead to success, we had the privilege of interviewing Richard Lim, a seasoned e-commerce expert with a wealth of experience. With his deep understanding of the industry, Richard shares invaluable insights and practical tips to help entrepreneurs and organizations ace their e-commerce strategy. Read on as we delve into the world of online business and learn from the expertise of Richard Lim.
Note: This interview has been edited for brevity and clarity.
1) Please introduce yourself and your role to our community without using the word "retail".
Richard: Hi, I’m Richard Lim, CEO of Retail Economics. We’re a boutique economics consultancy with a laser-like focus on consumers. We’re specialists in the field as we live and breathe the industry. Whether it’s producing our own proprietary data, conducting innovative research or having an evidence-based point of view, we strive to produce impactful research that adds genuine value to the community.
2) What have been some of the most challenging projects you have worked on, and what have you learned from them?
Richard: We live for the challenging projects. Thinking about innovative ways to solve problems and creating a research methodology to find a solution is at the heart of what we do best. The breadth of projects just means that we’re constantly doing something new all the time. Project scopes can vary enormously from calculating the value of “commuter commerce” (how much is spent by commuter shopping on their phones on the way to work) to quantifying “basket abandonment” for online shoppers.
Projects can be challenging for different reasons too. These can include things like time constraints, dealing with lots of stakeholders to the complexity of building an economic model. One of the most technically challenging projects has been the creation of a corporate “distress index” which measures financial distress across ten different sectors in four major European markets. The model contains time series data stretching back over 20 years for 14 financial metrics for 3,500 listed entities. There’s something like three million data points and we update this model on a quarterly basis to produce a European distress index. It was technically very challenging. The biggest learning from this project was understanding that anything is possible with the right team in place.
3) How much of an impact does the availability of delivery options have on the consumer's decision to complete a purchase?
Richard: Delivery options are absolutely critical for consumers, and the impact happens way before the point of checkout. In fact, our research that we recently conducted with GFS found that one in three consumers require knowledge of a retailer's delivery and return options before they consider adding items to their online basket and 81% of consumers consider delivery options integral to their decision to shop with a non-food retailer.
Transparency and clear signaling about delivery and returns options is essential and retailers that do this well can use delivery options as an effective customer acquisition tool, helping to attract and retain shoppers.
4) What are some ways that retailers can improve their delivery options to reduce lost sales at checkout?
Retailers really need to have an intimate relationship and knowledge of their core customers and understand their needs and wants so they can serve them appropriate delivery options. One of the biggest misunderstandings I see is when retailers have little visibility of their customers' delivery preferences, how they adapt with different products and their willingness to pay for options.
Given the fiercely competitive market, particularly post-COVID, consumers have heightened expectations around delivery, demanding that retailers provide a range of options that offer speed, convenience, and affordability. Consumers expect to be kept informed throughout the delivery process, with regular updates on the status of their order and the ability to track its progress. Retailers that fail to meet these expectations risk losing customers to competitors who can offer a more seamless and personalized experience.
5) What are some effective customer engagement strategies that retailers can use to increase customer satisfaction and loyalty?
Ensuring a smooth delivery experience is essential to guarantee customer satisfaction to promote loyalty and drive repeat purchases.
The most common frustrations for shoppers include packages being left in unsafe or unsecured locations, late deliveries, and items arriving when no one is available to receive them. Other concerns include poor packaging, missing or stolen parcels, and inaccurate tracking information.
Retailers generally have a good understanding of their customers’ pain points when it comes to the delivery experience. These often represent longstanding frustrations that the industry is aware of and are usually attributed to third-party delivery providers such as couriers, due to a lack of control or communication breakdowns between multiple parties within the delivery process. As such, retailers are investing significant resources to improve the final mile delivery experience – nevertheless, this still remains an ongoing industry challenge.
6) How can retailers balance the cost of providing a variety of delivery options with the need to keep prices competitive?
Retailers need to understand that there are many consumers that are willing to pay for quick, convenient, and hassle-free premium delivery and returns options.
Our research with GFS found that more than half of the consumers surveyed would pay for such an experience. Just over a third of shoppers (35%) indicated they would pay between £1.00 - £3.00 for a premium, hassle-free return experience, while a fifth would pay up to £5.00.
However, brands need to be conscious that paying for a returns service incites raised expectations whereby shoppers expect a choice of benefits or return options – whether its at-home pickup, packageless return drop-off, or digitally-integrated features such as initiation through a QR code and regular notifications on the progress of their return.
About Richard Lim
Richard Lim is the Chief Executive Officer of Retail Economics, an independent economics research consultancy focused on the consumer and retail industry. He also sits on the Strategic Advisory Board at the University of East Anglia’s School of Economics, ranked in the top 10 departments in Economics in the UK.
Previously, Richard held the position of Chief Economist at the British Retail Consortium before heading up the Retail Insight and Analytics team. Richard was voted as a Top Ten Voice for Linked for sharing his insights on the retail industry, has been recognized as a top retail influencer by RETHINK RETAIL in 2023 and also appeared in the final of The Apprentice as one of Lord Sugar’s advisors.
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