KPIs or performance indicators are used to measure the overall effectiveness of an implemented strategy. They can be used as a one-off for a specific campaign or on an ongoing basis.
If you want to make the informed decisions for your e-commerce business and improve its performance, you need accurate and relevant data.
The post-purchase experience involves monitoring logistics, transport and customer satisfaction closely.
Once you know all the indicators you should track, you can analyse your data in detail to see which improvements can increase your performance and which pitfalls you should avoid.
On-Time Delivery
This is one of the key indicators for measuring transport and logistics quality. On-Time-Delivery (OTD) is the ability to maintain the promised delivery performance.
The most common method of calculation for this KPI is:
Number of shipments delivered on time / Number of shipments delivered. A good OTD rate is at least 95%.
For carriers, the date that starts the countdown to delivery is often the date of the parcel being scanned for the first time. This action usually takes place at the carrier's collection point and is referred to as the quality of carrier service.
The delivery time countdown stops at a "clock stop", which is the event marking the end of the carrier's responsibility for the delivery. This clock stop can take several forms:
- The actual delivery of the package (possession) to the recipient.
- An attempt: the delivery person arrived at the recipient's home but the recipient was not there.
- The arrival of the parcel at a collection point if the client chose this delivery option.
- An event beyond the carrier’s control: strike, weather, traffic ban, unknown address, etc.
For the e-tailer's OTD, the delivery countdown usually starts on the shipment date; the date on which the package has been physically handed over to the carrier.
Time taken to collect the parcel from the retailer's premises
Ideally, the carrier's and the e-tailer's OTD should be identical. In practice, the merchant's shipping date (the date the parcel was handed over to the carrier) must correspond to the date the carrier first scanned the package. However, in reality this is not always the case and some parcels may be scanned on D+1 or D+2 and even later. This time period corresponds to the time taken to collect the parcel. In principle, this period should be equal to zero.
A higher value indicates problems that may have occurred in the following areas:
- IT: an incorrect shipping date was provided. For example, it corresponds to the date the label was created and not to the actual shipping date.
- Operational: the collection of parcels is poorly organised.
- Periodical: during peak times, not all parcels can be scanned at the agencies or collection hubs on the day of delivery.
Apart from IT problems, if the time interval taken to collect the parcel is higher than zero, this will have an impact on the delivery time. It will affect delivery performance and therefore OTD, and ultimately customer satisfaction. This timeframe should therefore be closely monitored.
First delivery attempt rate
As the name suggests, this rate represents the percentage of deliveries that were handed over to the recipient on the first attempt.
Quality of service is one of the first indicators you should monitor, but when it comes to home delivery, it is not enough. The customer's main concern is to receive the parcel and not that the delivery person has arrived at the address. If an e-tailer has a good OTD rate but a low first attempt delivery rate (less than 70%), this may result in customer dissatisfaction. However, this figure also depends on the type of product or transport service: a letterbox delivery rate will be higher than a signature delivery rate.
Do you have an effective post-purchase logistics and transport strategy?
Delivery pending
If the package cannot be delivered to the home address at the first attempt, the carrier can redirect the parcel to a collection point. This is known as "imposed pending delivery", as it is not a result of the customer's choice. When the customer decided to have the goods delivered to a collection point, we talk about a "chosen pending delivery". In this case, two indicators must be monitored:
The reallocation rate, i.e., the rate of parcels made available at a different collection point from the one requested by the customer. This rate usually increases during peak periods when collection points are saturated or when they are closed over the holidays.
The returned parcels rate, i.e., parcels that have not been collected by the customer before pending delivery period expires. These packages are returned to sender, generating costs (returns processing, re-shipment, refund) and customer dissatisfaction.
Time to first attempt to deliver by appointment
For a delivery by appointment, the OTD no longer depends on the delivery time but on keeping to the day and time initially scheduled for that appointment.
If the carrier makes the appointment, another indicator to watch closely is the time it takes to schedule the first attempt. This indicator will be your basis for managing and evaluating the carrier. Your customers' satisfaction depends on how soon the appointment is made and on whether the time slot has been honoured.
Problems with delivery
Delivery problems require special follow-up. You must ensure that their rates do not exceed 1 or 2%. The most common delivery issues are:
Wrong address. This does not necessarily prevent delivery, but it may cause it to be delayed.
Damage reported by the carrier or the customer.
Return initiated by the carrier.
Customer refusing the package
All these delivery management KPIs and many more are available natively in WelcomeTrack.
The following KPIs must also be monitored to ensure that your business is perfectly managed:
- Post-purchase customer satisfaction
- Logistics monitoring of e-commerce deliveries
Contact our team to improve your logistical performance!
