Not-So-Obvious Tips for the Back End

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Forrester Research estimates that online retail sales will grow from $172 billion in 2005 to $329 billion in 2010. On an individual company basis, growth of this magnitude can be scary if you're unprepared.

Case in point: Moosejaw Mountaineering. This Michigan-based company was started in 1992 by a brother and sister looking for better deals on hiking and climbing equipment. They had one small traditional retail space, a computer, one credit card machine, a UPS account and not much manpower.

But their little enterprise grew quickly, expanding to seven more stores and into both a catalog and online presence. The online and catalog channels created new challenges, though, and the back-end processes the company had in place were limiting the number of orders leaving its warehouse each day.

However, thanks to slight changes in their fulfillment processes and technology integration, Moosejaw has become a booming success, and the company now responds to customers 10 times faster than before. Based on our experience with retailers like Moosejaw, here are five tips for online retail entrepreneurs as they begin to grow:

Pay attention to the little things. It may sound like a cliché, but paying attention to the little things is vital. Yes, it helps to have the "sexy" part of online retailing solved, like a great-looking Web site with rich product content. But there's more, including the not-so-sexy back-end processes.

Assuming you have a checkout process that is easy to navigate, what happens after the customer clicks "purchase" is just as important and can affect the customer experience. Understanding this is critical and requires you to consider the role that all functions play in fulfilling customer orders. Typically, there are responsibilities across multiple groups in your organization, whether it be operations, customer service or even sales.

Examining the touch points of the fulfillment process lets you better identify how each affects the customer. After all, fulfillment and shipping of products purchased online are a major contributor to customer loyalty. A survey commissioned recently by UPS found that 80 percent of online shoppers said a positive delivery experience would cause them to likely buy from that online retailer again.

Monitor workforce effectiveness. Understanding the roles of everyone who touches fulfillment is also important internally. Do employees spend time re-keying delivery information into a shipping system? If so, it's probably time to integrate.

Moosejaw owner Robert Wolfe said that sometimes they could not even answer their telephones because they were busy fulfilling orders and preparing shipments. But some simple technology integration let the team work more efficiently and reconnect with customers. Mr. Wolfe found that automating this process is the key. Exporting customer order data to a shipping program can ease the strain and reduce manual labor.

Know when the customer experience is truly complete. Unlike for brick-and-mortar shops, the customer experience online continues well beyond checkout. When customers leave the virtual store, e-tailers need to continue treating them as if they are still logged onto the site and actively engaged.

Consistent follow-up communication is critical to building a relationship and improving customer loyalty. Customers want to know where their order is within the fulfillment process, and it is your responsibility to deliver this information.

You can "push" this information to customers or "pull" customers back to your site to inform them of their order status. Either way has advantages. For instance, e-mailing order status information minimizes the steps customers have to take to check on their orders. On the flip side, pulling them back to your site via an order status link gives you another chance to direct them to your store and sell even more.

Moreover, if you do not make it easy for customers to check their orders themselves, your staff is likely burning time responding to customers' inquiries as to the location of their packages. Moosejaw found that almost as soon as the company began sending proactive tracking notices to customers, the phones quieted and staff could focus more on fulfilling orders. They even found time to focus on things like new product lines and other marketing efforts. It's been rumored that some people at Moosejaw even got to go hiking again.

Remember your customer; know your product. Shipping costs are inevitable in any online retail environment, so fully understanding your products and the cost of shipping them directly affects your bottom line. An obvious point? Possibly, but it can be more complex than one would think.

If your product falls into a larger-load category or does not fit conveniently into a box, shipping charges can go beyond the cost of the product. If you do not know the dimensions of your final package, the shipping charges can show up on your bill after the customer has received his order, leaving you responsible for the additional charges.

If you offer high-end products, consider what options are available to provide customers with the same quality service from beginning to end. You may want to ship via air instead of ground, or require a signature upon receipt.

Keep them returning. How easy have you made it if your customer wants to exchange or return the item? Not only is this part of the customer experience, it may affect your long-term relationship with the customer. Just as there are ways to integrate your shipping and tracking information, there are numerous ways to integrate the returns process, from the most sophisticated processes to services that let you simply e-mail your customer a return label.

Everyone always looks for the next big idea. But it's also important to take the time to consider the little things, remembering to pay close attention to the details of your back-end functions like the integration of your technology across processes and order fulfillment throughout the customer experience. This will help keep you from putting the virtual shopping cart before the horse, giving you more time to focus on the next grand idea or, even better, the customer.

By Carl Strenger

Forrester Research estimates that online retail sales will grow from $172 billion in 2005 to $329 billion in 2010. On an individual company basis, growth of this magnitude can be scary if you're unprepared.

Case in point: Moosejaw Mountaineering. This Michigan-based company was started in 1992 by a brother and sister looking for better deals on hiking and climbing equipment. They had one small traditional retail space, a computer, one credit card machine, a UPS account and not much manpower.

But their little enterprise grew quickly, expanding to seven more stores and into both a catalog and online presence. The online and catalog channels created new challenges, though, and the back-end processes the company had in place were limiting the number of orders leaving its warehouse each day.

However, thanks to slight changes in their fulfillment processes and technology integration, Moosejaw has become a booming success, and the company now responds to customers 10 times faster than before. Based on our experience with retailers like Moosejaw, here are five tips for online retail entrepreneurs as they begin to grow:

Pay attention to the little things. It may sound like a cliché, but paying attention to the little things is vital. Yes, it helps to have the "sexy" part of online retailing solved, like a great-looking Web site with rich product content. But there's more, including the not-so-sexy back-end processes.

Assuming you have a checkout process that is easy to navigate, what happens after the customer clicks "purchase" is just as important and can affect the customer experience. Understanding this is critical and requires you to consider the role that all functions play in fulfilling customer orders. Typically, there are responsibilities across multiple groups in your organization, whether it be operations, customer service or even sales.

Examining the touch points of the fulfillment process lets you better identify how each affects the customer. After all, fulfillment and shipping of products purchased online are a major contributor to customer loyalty. A survey commissioned recently by UPS found that 80 percent of online shoppers said a positive delivery experience would cause them to likely buy from that online retailer again.

Monitor workforce effectiveness. Understanding the roles of everyone who touches fulfillment is also important internally. Do employees spend time re-keying delivery information into a shipping system? If so, it's probably time to integrate.

Moosejaw owner Robert Wolfe said that sometimes they could not even answer their telephones because they were busy fulfilling orders and preparing shipments. But some simple technology integration let the team work more efficiently and reconnect with customers. Mr. Wolfe found that automating this process is the key. Exporting customer order data to a shipping program can ease the strain and reduce manual labor.

Know when the customer experience is truly complete. Unlike for brick-and-mortar shops, the customer experience online continues well beyond checkout. When customers leave the virtual store, e-tailers need to continue treating them as if they are still logged onto the site and actively engaged.

Consistent follow-up communication is critical to building a relationship and improving customer loyalty. Customers want to know where their order is within the fulfillment process, and it is your responsibility to deliver this information.

You can "push" this information to customers or "pull" customers back to your site to inform them of their order status. Either way has advantages. For instance, e-mailing order status information minimizes the steps customers have to take to check on their orders. On the flip side, pulling them back to your site via an order status link gives you another chance to direct them to your store and sell even more.

Moreover, if you do not make it easy for customers to check their orders themselves, your staff is likely burning time responding to customers' inquiries as to the location of their packages. Moosejaw found that almost as soon as the company began sending proactive tracking notices to customers, the phones quieted and staff could focus more on fulfilling orders. They even found time to focus on things like new product lines and other marketing efforts. It's been rumored that some people at Moosejaw even got to go hiking again.

Remember your customer; know your product. Shipping costs are inevitable in any online retail environment, so fully understanding your products and the cost of shipping them directly affects your bottom line. An obvious point? Possibly, but it can be more complex than one would think.

If your product falls into a larger-load category or does not fit conveniently into a box, shipping charges can go beyond the cost of the product. If you do not know the dimensions of your final package, the shipping charges can show up on your bill after the customer has received his order, leaving you responsible for the additional charges.

If you offer high-end products, consider what options are available to provide customers with the same quality service from beginning to end. You may want to ship via air instead of ground, or require a signature upon receipt.

Keep them returning. How easy have you made it if your customer wants to exchange or return the item? Not only is this part of the customer experience, it may affect your long-term relationship with the customer. Just as there are ways to integrate your shipping and tracking information, there are numerous ways to integrate the returns process, from the most sophisticated processes to services that let you simply e-mail your customer a return label.

Everyone always looks for the next big idea. But it's also important to take the time to consider the little things, remembering to pay close attention to the details of your back-end functions like the integration of your technology across processes and order fulfillment throughout the customer experience. This will help keep you from putting the virtual shopping cart before the horse, giving you more time to focus on the next grand idea or, even better, the customer.

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