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On-time delivery: Unveiling the secrets to meeting customer expectations
Ecommerce metrics

On-time delivery: Unveiling the secrets to meeting customer expectations

Suraj Verma
June 16, 2023
mins read

In the landscape of e-commerce, the customer experience is of utmost importance. It is something that can make or break a business. Why? Because ecommerce is a highly competitive industry, customers have countless options at their fingertips. So, they are likely to choose an online store that provides a seamless, convenient, and personalised interaction through on-time delivery. This is why prioritising the customer experience is crucial to attract and retain customers.

One remarkable way to delight your customers is to ensure on-time delivery.

According to research, 69% of customers are much less or less likely to shop with a brand in the future if an item they purchased is not delivered within the promised timeframe.

On the contrary, customers experience high satisfaction when they receive their orders promptly. However, ensuring this for ecommerce brands can pose significant challenges. It is very much like solving a complex puzzle. You need the right technology, robust infrastructure, and a team that works efficiently. For instance, on-time delivery will leave your customers smiling, spreading positive word of mouth, and coming back for more.

In this blog, you will understand what on-time delivery is, the challenges of providing on-time delivery, how to overcome them, and how to measure on-time delivery rate. We will also look at how the services offered by a 3PL like Eshopbox can help you achieve a high on-time delivery rate.

What is on-time delivery?

On-time delivery (OTD) means delivering orders to your customers within the timeframe promised before the purchase. It ensures that the customer receives the item at the specified time without any delay or inconvenience. For example, if a customer orders a pair of shoes online and they are promised that the product will be delivered in three days, and it actually reaches them on the third day, that's an on-time delivery. Adhering to this practice is crucial for e-commerce brands as it not only ensures customer satisfaction but also establishes your business as trustworthy and reliable in delivering orders promptly.

Why ecommerce brands should deliver orders on time?

Ecommerce brands can establish themselves as reliable and trusted providers by offering on-time delivery. Here are some of the reasons why:

  1. It enhances the overall customer experience.
  2. It helps maintain a positive brand reputation in the competitive e-commerce landscape.
  3. It reduces the risk of customers choosing competitors due to delayed shipments.
  4. It fosters a sense of reliability, drives repeated purchases, and builds customer loyalty.

Before we get into the challenges faced, let us understand how you can measure this metric.

KPIs: How to calculate your on-time delivery rate

The on-time delivery rate is a key performance indicator (KPI) that measures the percentage of orders delivered to customers within the specified time frame. It helps businesses assess their ability to meet customer expectations and deliver products or services on time.

The formula for calculating the on-time delivery rate is as follows:

On-time Delivery Rate = (Number of orders delivered on time / Total number of orders) x 100

Formula for on-time delivery rate
On-time delivery rate formula

For example, let's consider an ecommerce company that received 500 orders in a given month. Out of those, 430 orders were delivered to customers within the promised delivery timeframe. Let’s put these numbers in the formula:

On-time Delivery Rate = (430 / 500) x 100 = 86%

Therefore, the on-time delivery rate for that particular month would be 86%.

Now that we understand what on-time delivery is, let us look at some of the challenges ecommerce brands face while providing on-time delivery.

What challenges do ecommerce brands face while providing on-time delivery?

The importance of on-time delivery cannot be overstated. Still, many ecommerce brands fail to do so. Let us look at some of the challenges that can affect on-time delivery:

  • Poor inventory management

Poor inventory management is one of the leading causes of delayed deliveries. If your online business does not have a dedicated system to track inventory levels, especially when you are selling on a large scale, it can be difficult to meet demands. It can lead to delayed deliveries and hamper customer experience.

For instance, let’s say you run an online clothing store that receives a high volume of orders every day. But you do not have an efficient Inventory Management System (IMS) in place. As a result, you might mistakenly believe that you have enough stock to fulfil all the orders. This may lead to delayed deliveries.

  • Limited operational warehouses

A lower number of ecommerce warehouses across the country means a longer time required to deliver to farther locations. For instance, if you get an order from Assam and your warehouse is in located in Haryana, it will take more time to reach the customer. But if you have a warehouse in Kolkata or the East zone, you will be able to make the deliveries on time without any delays.

  • Inefficient order processing

Inefficient order processing can lead to delays in fulfilling customer orders. Manual or outdated processes and lack of automation can result in errors and slower order processing times.

For example, if you rely on manual order processing methods or outdated systems, you may not be able to efficiently process sudden bulk orders or seasonal peak orders. This may result in delayed deliveries and hamper customer satisfaction.

  • Inaccurate order allocation

If the orders are not accurately allocated to the nearest fulfilment centre, it may lead to delayed deliveries. This means longer transit times, unnecessary transportation costs, and dissatisfied customers. Moreover, Achieving on-time deliveries can result in increased costs for e-commerce brands. To deliver on time, you may need to utilise faster transportation to meet delivery deadlines. You might also need to rent multiple warehouses across the country which will add to your overall expenses.

  • Inefficient last-mile delivery

The last-mile delivery involves delivering packages from the local fullfilment centre to the customer's doorstep. Challenges such as traffic congestion, difficulty in finding addresses, or limited delivery windows may cause delays. Since this is taken care of by the courier partners, finding optimal solutions for efficient last-mile delivery is an ongoing challenge for ecommerce businesses.

Now that we understand the challenges, let us look at how you can improve your on-time delivery rate.

Ways to improve the on-time delivery rate

Improving the on-time delivery rate is crucial for enhancing customer satisfaction and optimising operations in the ecommerce landscape. After looking at the challenges, let us look at some of the ways you can improve your business’s on-time delivery rate.

  • Ensure proper inventory management

You need to implement effective inventory management practices to ensure accurate stock levels, minimise stockouts, and enable efficient order fulfilment. Businesses must track inventory, utilise inventory management software, and establish reorder points to replenish the stock in a timely manner. So, when you have sufficient inventory in hand, you will able to fulfil orders without delays.

Eshopbox provides efficient inventory management
Eshopbox provides efficient inventory management

  • Leverage a distributed network of fulfilment centres (FCs)

It is essential to have a distributed network of fulfilment centres strategically located across the country to significantly improve the on-time delivery rate. Moreover, this will allow quicker access to inventory, reduced transit times, and faster order processing and shipping to customers.

Eshopbox's distributed network of fulfilment centres
Eshopbox's distributed network of fulfilment centres

  • Implement streamlined order processing

Ecommerce brands need to implement efficient pick and pack processes within the fulfilment centres. This involves optimising the layout, organisation, and workflow of the warehouse to minimise picking errors, reduce processing time, and improve overall efficiency in order fulfilment.

  • Smart allocation and routing

Utilise intelligent algorithms or software solutions to allocate and route orders optimally. This will help in automatically determining the most suitable fulfilment centre based on inventory availability, proximity to the customer, and other factors to ensure faster order processing and on-time delivery.

Deliver on time and delight your customers with Eshopbox

"Our Shopify fulfillment is on auto-pilot with Eshopbox — our orders are imported automatically and delivered to customers with a superior tracking experience. We manage everything from one place, it's very convenient.”
—Akshat Singh, Senior Manager Digital, Blackberrys

When it comes to ecommerce, delivering orders on time is crucial for customer satisfaction and loyalty. That's where Eshopbox comes in. As a trusted third-party logistics (3PL) provider, Eshopbox offers a range of services designed to improve your on-time delivery rate and delight your customers. Here are a few ways in which Eshopbox’s services can make a difference:

  • Efficient order processing

Eshopbox can help you build the much-needed supply chain flexibility into your ecommerce operations. Get automated order processing and delivery for multiple sales channels. Managing orders on a big sales day will feel like a breeze to you.

  • Intelligent inventory management

Eshopbox offers state-of-the-art facilities to store inventory and make it available across multiple sales channels. One of the key advantages is real-time tracking which allows brands to monitor inventory levels across different locations. Eshopbox also helps identify slow-moving inventory with high storage costs and provides proactive replenishment reminders.

  • Strategically located fulfilment centers

With a well-connected network of fulfilment centres, Eshopbox enables faster order fulfilment, reduced transit times, and cost-effective shipping options. Moreover, Eshopbox runs operations around the clock and handles peak order volumes, seamlessly. All the Eshopbox's Fulfilment Centers (FCs) are operational on holidays with no additional cost to you.

  • Timely shipping and delivery

Eshopbox offers a cost-effective and efficient delivery service that aims to quickly deliver your orders to your customers. Eshopbox collaborates with reliable shipping carriers and offers flat shipping rates and automatically assigns your orders to the best carrier for a seamless delivery process. Some key features of Eshopbox's shipping service include extensive coverage of pin codes across India, the option for customers to pay on delivery using cash or card, order tracking with guaranteed delivery dates, convenient return pickups from customers with doorstep quality checks, and a centralized platform to manage your orders from creation to delivery.

Bottom line

All in all, ensuring on-time delivery is a critical aspect of running a successful ecommerce business. Overcoming the challenges associated with on-time delivery requires strategies such as proper inventory management, streamlined processes, and partnering with reliable 3PL providers like Eshopbox. By implementing these strategies, your business can improve its on-time delivery rate, delight customers, and gain a competitive edge in the ecommerce landscape.

Remember, a satisfied customer is a loyal customer, and delivering orders on time is the key to winning their trust and fostering long-term relationships.

Connect with our fulfilment expert today.

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