As I sit on the precipice of starting my second ecom business (more on this later!), I can't help but reflect on my past adventures in this arena.
My relationship with ecommerce is love-hate. I love the immediate gratification of launching a digital campaign and watching orders fly in after. I hate the constant to-do lists, never being able to close your shop (yes, orders come in day in night, but so do issues), and the constant uphill challenge of an ever-changing marketplace.
I did, however, manage to build an ecommerce business from the ground up from $0 to $7 million annually over the course of 5 years. That’s a super fast timeline, and without any outside funding means you have to do a lot of things right and operate very leanly to make it happen.
I’m not going to dive into the specifics of how to reinvest profits and sustain a rapid growth rate, today, nor am I going to harp on some of the basic core principles of ecom (mobile and user friendly website, search engine optimized, tailored product offerings, secure checkout, yada yada), but I want to talk about one extremely simple, yet nuanced principle that may get swept under the rug, that I believe is critical to rapid and big growth.
I want you to ask yourself this:
Is EVERYTHING in my ecom business lightning fast?
Here’s why speed matters:
A Google search can take a user from your storefront to a competitor’s in just seconds. Additionally, the average human attention span is declining due to the mobile device revolution, falling from 12 seconds to just 8 (goldfish clock in at 9 seconds!!) Therefore, on top of having what a customer is looking for, you have to serve it up super fast, otherwise they will get bored, antsy and look for the goods elsewhere.
Amazon is investing in shipping programs that allow users to get their products not just in 2 days via the usual Prime account, but on THE SAME DAY they ordered.
In the last few years, live chat features have cropped up on almost every website from AT&T to Backcountry.com, shortening the time spent getting an answer to minutes.
So what exactly needs to be fast? Let’s dive into a few details and anecdotes.
Here are a few fun facts:
—Users expect webpages to load in 2 seconds or less.
—40% of customers will abandon any site that takes longer than 3 seconds to load.
—For every 1 additional second of load time, conversion drops by 7%.
—For every 1 additional second of load time, user satisfaction drops by 16%.
And it's not just your users want pages to load fast. Google will favor faster pages over slower ones as well.
Once an order is placed, customers don’t want to wait to receive it. Your time is well spent in optimizing the time between order placed and order fulfilled. Whether you do all your fulfillment in-house or work with a 3rd party fulfillment center, look for ways to make this process as efficient as possible. Here are my suggestions for streamlining:
Packing slip and postage printing speed
Seems obvious, but there are so many details here that can slow this down. Be sure you have one or multiple printers that can handle the order volume you receive at PEAK times for both packing slips and postage labels. The way your business operates at peak levels will determine if you can grow or not.
Let me repeat that: The way in which your business operates at PEAK times will determine whether or not you can grow.
I’d like to share a real life story from my ecom days…
The first warehouse we ever outsourced our fulfillment to was an excellent fairly small mom and pop shop just outside Kansas City. They were awesome people, took great care of us and gracefully handled whatever random exceptions and instances we needed for them to handle.
Our business, like so many ecom businesses, was largely driven by the holiday season. As the season got nearer and nearer, we watched our fulfillment speeds get lower and lower. The situation got more and more tense as we would ask each day how the day before’s backlog was getting handled. Each day, the backlog grew and grew until we had to escalate the issue to the president of the company. At the rate they were going, our Black Friday orders may not ship until after Christmas. It was bad.
They were finally able to isolate the issue as being a slow printer. At the printing station, there was a software glitch that was holding up the printer and orders were bottlenecking there. It did take a few calls to both the software company and asking the fulfillment partner to invest in a new printer before we were able to get through the bottleneck. Ultimately, however, we realized that at our 200-300% year over year growth rate, we were never going to be able to succeed in this scenario, and it ultimately cost the warehouse our business. A few months later we were relocated to a new facility that boasted split second print times.
It’d be easy to say that this was not a huge issue because it only cropped up during our busy season, but with our growth rate, our “busy season” was really only a great training period for what would in a few months become our new “normal”. (Well, not quite, but we would reach those peak numbers much more quickly around smaller holidays).
Case in point, take your peak seasons seriously. Be optimized for them (or be able to quickly scale for them) at ALL times, and you will be primed for growth.
Do your pickers have to travel long distances to get to best selling products? Consider ordering products by sell through volume (instead of sku) so that the high volume products are nearest the packing station, and to one another, and the less popular items are further away. (There is a whole science around this. If you are already doing high volumes consider investing in a person who can optimize this for your business.)
What do your packing stations look like? Are they a jumble of flattened boxes and half empty tape guns? The packing station should look like master craftsman’s workshop and function like a well oiled machine.
Each day should start with a good amount of prebuilt boxes, tape rolls should be mostly full, labels and branding material freshly laid out, and bubble wrap, packing paper, etc, at an arm’s reach.
Any specific guidelines should be laminated and posted at eye level so the packer doesn’t have to make any mental notes or stop to look them up.
This could be an entire blog post, but I’ll spare you the various ways to optimize your shipping carriers and methods, as for one thing I find it really dull, and for another, it’s not what I specialize in. Just know this - you do need to analyze this for the health of your business. If you don’t already have relationships with UPS, FedEx, <insert your favorite carrier here>, then you need to form one and understand their bulk price rates, policies and promises they can make around peak times in your business (Ie, holidays).
Why is this so important? At this point you have your customer's money and they have nothing aside from your promise. Your brand integrity now lies in the hands of a shipping partner and method to get them the goods in a timely and safe manner. I can’t tell you how many times I’ve had to personally take the blame for a mistake UPS made, because ultimately, the customer doesn’t care. They gave you their order, and their money and they will hold YOU responsible - even if UPS makes the mistake.
Returns & Refunds
Handle these in an expeditious way to ensure you don’t lose your customer’s trust, especially after the hassle of having to return something.
Ways to keep this process pain free for all parties are:
Post an easy to understand return policy on your website, stating:
In what condition the items must be for the return to be accepted
In what time frame from the order date you will accept a return
How to place the return (from an RMA to the way to ship it)
How and when they will be refunded
Who to contact with questions
Create easy to use screens for your customers to find their order, print a return label, and ship it back to you. Work with your web developer to understand what is possible on your website platform. Products like Magento, Shopify and Squarespace have out-of-the-box return functionality for both logged in and guest customers.
Make it crystal clear how returns should be processed for customer service/warehouse staff. Account for all scenarios:
Items are broken or not in new condition (or the condition you specify in your return policy)
A return received outside of the allowed window
The wrong item returned
No customer info included
Anything custom to your store
I will save a lot of customer service goodness for a later post, but I include it under the topic of speed because no one likes to wait when they need help. Put key performance indicators (KPIs) and standard operating procedures (SOPs) in place regarding customer service. Actually, put them everywhere you can in your business, but especially in customer service. Here’s why…
What gets measured, gets managed.
This means if you aren’t paying attention to why people are writing you and how long it takes to get back to them, and the overall time it takes to close a ticket, then you aren’t managing that time either. It could be a day (yay!) it could be 2 weeks (boo!). At a minimum start looking at these response rates. Use customer service software like SmarterTrack, Live Person or Zendesk (or any other, there are many), that have these features built in.
Set KPI goals and targets for the time it takes to answer an email and phone call and time it takes to resolve (close) the issue. Track the team’s performance over time (record these KPIs in a Google Sheet or Smart Sheet) and review them on a regular basis. And per my point above, pay special attention to them during peak times. This will determine your ability to grow.
While these all seem like no-brainers, it’s amazing how easily they can shift to the background when other fires come up (and ecom is all about putting out fires). But when we shifted our attention these important (not urgent) issues and put goals and strategies in place to increase their performance, we elevated our playing field. We knew now that we could crank our volume knobs to the Spinal Tap mythical 11 setting, and not be hindered speed issues that could ultimately take us down.
Have you been the victim of ecom slugishness, or the victor in an online speed war? Let me know in the comments below!