Order to delivery

Why read this? : We look at how to set up your order to delivery system to deliver products efficiently to customers. Learn how to manage key process steps like payments, storage and delivery. We also share customer service examples to help you plan for managing complaints. Read this to learn how to optimise your order to delivery process.

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Customer expectations drive order to delivery

Think about a customer’s experience of your online store. They’ve checked out your product pages, like what’s on offer and they’re now ready to check out. Your e-Commerce “offer” meets what they need and want. (see our what online shoppers want article for more on what customers expect from online stores).

They enter their credit card details and expect the order to turn up as promised. In the same state as it was on the website, and where and when they’ve asked for it. Your order to delivery process is how you deliver against those expectations about delivery.

This guide will go through each step of the order to delivery process. We’ll look at how to make each step run more smoothly. Plus, we show how to prepare for the many challenges and issues you’re likely to face. It’s important to manage orders well as they’re a key part of your relationship with the customer. An efficient order to delivery process helps prevent issues and keep your customers happy.

E-Commerce store experience

As per our online store strategy guide, there are 5 steps to cover in the e-Commerce experience.

This guide assume you’ve already set up your digital media and store website. We focus on what happens next – payment, delivery and customer service.

For example, what has to happen when a customer places an order? How do you manage transactions securely and make sure the right product gets to the customer? What happens if anything goes wrong?

Set up your order to delivery system to answer these types of questions and you keep customers happy and loyal so they come back and buy again.

E-Commerce ideal experience

First, let’s look at what happens with an “ideal” purchase. That’s one where everything goes smoothly for you and for the customer.

They’ve decided to buy the product, so what happens next?

The first choice is whether they can check out as a guest, or have to register their details to buy.

Recent research suggests you should allow both options, as guest check-out is chosen about 20% more than the logged-in check-out, when both options exist.

So guest check-out equals more sales.

Also, the information the guest customer gives you to buy a product isn’t much different from the information they’d give you to register. You’ll get their name, address and contact details as you need these to process their order. So you can ask guest check-outs if they want to store those details and set up an account after the check-out to make it easier to buy the next time.

However, there are a few situations where you may want to limit guest check-out. These are where you want more control over who can order from your store. Guest check-outs are harder to control than only selling to registered customers. For example, you may want to limit overseas orders, limit quantities per customer, or manage the re-selling of products.

Limit overseas orders

While your online store gives you access to a global online market, there may be some countries you can’t, or choose not to sell to.

This might be because you know there are export / import restrictions on your products that’d make more shipping difficult. This applies particularly to products that are food related. Or, products sourced from natural materials like wood and plants.

These can have bio-security issues, that mean products will be held up or rejected by customs. In these cases, it’ll generally be up to you as the seller to resolve the issue.

You can add a note in your FAQs and Terms and Conditions about which countries you will and won’t ship to. But be aware, this won’t always read by the online shopper. When you request a registration, you can make it easier to screen out orders from countries you won’t ship to.

Limit quantity ordered

If you have limited stock and wish to fairly allocate it to customers, this is difficult with guest check-out. With every guest check-out the customer is new and unknown. So, you don’t know if they’ve ordered before.

And if they have ordered before, you don’t know how much they ordered.

Though you could set a maximum quantity per order on the order form, it’d be possible for that guest shopper to place multiple orders.

Barriers like limiting the number of orders per email or address can be circumvented by determined buyers.

When you force shoppers to register and disallow guest check-out, you have more data about that customer before they make a purchase. So, it’s technically easier restrict their orders. Or, even ban them if they continually ignore your order limits. You’ll need some extra IT skills to set these limits up on your site and payment gateway.

You can allocate a quantity of items to registered customer over a specific time period, so they get the same share as everyone else. That’s much harder to do with guest check-outs.

Prevent re-selling issues

Keeping the theme of limited stock, one of the causes of this may be some buyers re-selling your stock at a profit elsewhere. Australian-made infant formula being sold to China by daigou buyers is a well-known example of this.

Though the practice causes controversy, because it leaves stores out of stock, there’s nothing illegal about it. The buyers / re-sellers obviously have to make sure they follow all international shipping laws and procedures, though. But once, someone buys something from you, it belongs to them. They can do what they want with it. The challenge comes when you start to lose ‘regular’ customers because your products are always out of stock.

If the quantities are large enough, you might want to set these re-sellers up as a separate channel, as if they were a trade customer. Registrations to buy help you identify who these customer are, and gives you the option to create different buying experiences for them. That’s not possible to do with guest check-outs.

The order starts with the order form

The order form captures the customer details you need to manage the transaction and delivery.

It’s the first part of the order to delivery process. It sets the tone for the rest of the shopping experience.

If there are issues with the order form, it has a knock-on effect on all stages that follow.

Make the order form as easy to complete as possible. The more complicated the form, the more likely something will go wrong, or the shopper will abandon the purchase.

Capture the minimum amount of information you need to make sure the right product gets delivered in the right way to the right customer. Let’s look at the data the form needs to capture.

Payment details

Most online payments are usually via :-

a credit card.
an online portal like Paypal.
a deferred payment service like Afterpay.

The payment process via the likes of Paypal and Afterpay is fairly simple. You set up an account with them, and link it to your bank details. The customer pays them, and then they pay you. You don’t interact with the customer’s payment, only the payment provider.

Credit card payments are a little more complex. You need to link a payment gateway to your store’s website to manage the transaction.

Payment gateways

A payment gateway is a secure website system which manages the transfer of payments between a customer’s credit card and your bank account. It acts as an intermediary in the transaction. It manages the flow of data required to make payments, and is also used to reduce fraudulent transactions. For example, it can check whether cards have been reported stolen, and limit certain types of transaction.

There are many competing payment gateways you can choose from. SecurePay, EWay, and Square are among the most well-known, but there are many more. They mostly all work in the same way, but they’ll have different fee structures, and different levels of service.

Fees would normally include a one-off payment for set-up, and a sliding percentage rate per order depending on how many orders you put through their system. They can also differ in how much they charge you for chargebacks (customer refunds). You’d look at the different rates on offer, as part of your online store business model.

Once you choose a payment gateway

When you choose a payment gateway, you’re given a set of instructions on how to connect it to your store website. You can embed the gateway into your site (so it appears to be part of your site), or send customers to a new page on the payment gateway’s website (called a hosted gateway).

As part of the set-up, you give the gateway provider details of your company, your contact details, your bank details and your Internet Merchant ID. You’ll also get details of their terms and conditions which you should obviously check carefully.

You’ll also get details of how to access their back-end system to manage your settings on payments. This is usually to help you reduce fraudulent payments. For example, setting a maximum value per order, limiting repeat orders or rejecting orders made from certain countries.

You usually involve your finance and IT teams in setting up and managing this system. There’s a lot of on-going testing to do. The payment gateway will also usually have a customer support team who can help if there are any issues.

Managing payments on the gateway

The back-end of the payment gateway system lets you run sales reports to better analyse and understand customer behaviour. For example, you’ll be able to see completed transactions, repeat orders and any rejected transactions.

The back-end system also lets you manage the details of individual transactions. You usually give access to your finance or customer service teams to handle this e.g. managing refunds, or adjusting incorrect payments.

You need a transaction or customer ID number to identify specific orders. The system won’t show you the actual credit card number. This is to prevent fraud, by keeping the card details secure.

It’s part of an online payment governance systems called the Payment Card Industry Data Security Standard, (PCI DSS), or PCI compliance for short. You payment gateway must be PCI compliant.

Setting payment rules on the gateway

You can also set payment “rules” on the gateway to prevent transaction you see as potentially risky.

For example :-

location limitations – e.g. rejecting order from countries with high fraud rates, or where you don’t deliver because of customs regulations.
repeat orders – e.g. where you are trying to manage stock levels, and suspect customers are trying to buy in bulk quantiles for re-selling purposes. You can set limits by the customers name, address, credit card and / or IP address details, so they can only order a certain amount, or can’t re-order until a certain time has passed.

banning customers – if you have customers who repeatedly try to break your payment rules, you can set the system up to automatically reject them (by their IP address for example). You have a right to reject any customer’s order.

Check out our e-Commerce payments article for the more specific ins and outs of managing online payments.

Order Validation checks

Assuming the payment gateway verifies the payment as genuine, the payment is then confirmed. The customer is notified the order has been placed.

All the details from the order form (apart from the payment details) are then captured in your online store website customer order database. (part of your wider Customer Relationship Management (CRM) system).

For smaller businesses with limited online sales, this would result in an automated e-mail with details of the order being sent to whoever in the business manages customer orders. This could be the store owner themselves, or whoever manages operations for the business.

In larger businesses with more regular orders, there may be a dedicated customer service manager or team, who regularly process orders. The order form details might be automatically entered into an internal order management system like SAP to be processed. (rather than sent via email).

You can manually validate and release each order, if the numbers are small. Or, you can set up automated checks to make sure the order is genuine and valid. Validated orders are then released to the warehouse team to be picked and packed ready to be shipped to the customer.

Extra validation checks may be required

Depending on the category and type of order, there may be some extra validation checks you need to build in to the order to delivery system. Work with developers and IT teams to build these into the order form. For example, if you choose not to deliver to PO boxes or to certain countries, but someone requests this in another part of the order form, you can choose to reject that order.

If your product has any special delivery needs, this is a good time to check the order can be safely and securely delivered. For example, if the delivery requires a constant temperature (say ice cream or frozen fish). Or, if the delivery is high value, you should make signature on delivery mandatory. And if, there are any legal restrictions such as over 18 for alcohol deliveries, you want to make sure there is some sort of validation in place, before you send the order.

Order details sent to the warehouse

The validated order details are then sent to the warehouse to be picked, packed and dispatched.

This happens by email, or via a data feed from the website or internal order system to the warehouse / delivery system.

You’ll need to ask the warehouse and delivery team what information they need to be able to manage an order. Then, you make sure your website order form captures those specific details.

Missing or incorrect data makes picking, packing and delivery more difficult. Which leads to delays and more cost.

Clearly, you don’t want that. So work closely with the warehouse and delivery team to make sure the order form information passes through smoothly to their order processing systems.

Specify who's responsible at each stage

As you set up your order to delivery system, you should specify who’s responsible at each stage. In particular, your supply chain team must be on board, as it causes major D2C challenges when they aren’t.

Be clear what you expect each person to do, how the different tasks link together and what decision-making power people have. If one part of the system fails, the rest of the system won’t work properly. You should also plan the timings of how orders pass through the system e.g. processed in real time or in managed batches. Delivery companies have specific times when they’ll collect orders from specific locations. So, you have to synchronise the your order processing with these times.

Bigger businesses will often integrate online store orders into their financial and operational systems like SAP. This helps control and automate processes. However, it usually takes longer and costs more to set this up. You’ll need specialist IT skills if you want to do SAP integration, for example. The scope of that for an online store covers areas like :-

Order ID creation
Creation of a new order type (D2C)
Creation of a new customer type (D2C)
A separate storage location (SLOC) for online store orders
Set up an invoice
Set up a delivery docket
Automated emails to the customer
Inventory managerment
GST and delivery costs for finance reporting

Order picked, packed and dispatched

Once the warehouse receives the order, it’s then picked, packed and dispatched.

Picking

Picking refers to taking the product off the shelf where it’s been stored.

The warehouse shelf layout should make it easy to find the products to be picked.

The storage location is often attached to the product number on the order form, or within the warehouse system.

For example if you get an order for “male red-T-shirt large”, you don’t want the person picking the order to have to look for T-shirts, then men’s T-shirts, then red-T-shirts, then large ones. That’s clearly inefficient. But, if the T-shirt location is marked, say Aisle H, Section 42, Shelf Level 2, Position 3, then the order picker knows exactly where to go.

Packing

How the order is then packed depends on the nature of the product / category, and of the order size and composition. Some products are easier to pack than others. You often need to break items down into smaller units for shipping.

For example, let’s say you sell bottles of whisky. These normally come in boxes of 6. But what if the order’s only for one bottle? You’ll need extra packaging to ship that bottle (e.g. bubble wrap or a separate box), plus at some point, the box of 6 will be empty and you’ll need to work out what to do with it.

All this has to be worked out in advance with the warehouse team. (see our packaging development guide and our packaging for e-Commerce article for more on this).

Dispatch

Customer ordering multiple items generally expect them to arrive at the same time. So, you have to work out how to combine items together for shipping with these sorts of orders. For example, do you have different sizes of boxes available? Or, can you wrap boxes together for deliveries?

You should also consider any factors which might affect the product while it’s in transit.

For example, if it’s a heavy or fragile object, you need to mark this on the box, so drivers take more care when lifting / moving it. Plus, if the item has an expiry date, or requires special storage while in transit (e.g. temperature control), this all needs to be set up in advance. You also have to make sure you’ve ordered enough packing boxes and materials for the orders you’ll get.

Clearly, there’s lots of planning and preparation goes into this part of the order to delivery system.

Inventory Management

You’ll also have to plan with the warehouse team how to manage inventory levels.

For example, you could do this via your website order system. When the order is processed, the stock level for that item drops by one. You can also set re-order reminders to replace the stock at certain levels. This is the simplest approach. But, it’s not perfect.

That’s because there are many factors which can impact inventory levels. So, warehouse teams need to be able to make adjustments. For example, if items get damaged while in the warehouse, Or, they get lost at some point between the warehouse shelf and the delivery. Or, even if there’s just a miscalculation of the number of units going in to the warehouse.

You may already have your own (SAP) system to manage inventory. The warehouse team may also have their own system. You should make sure these systems “talk” to each other. Usually, this means getting IT teams to set up the systems. You need IT on board, because you run into more D2C challenges if you don’t.

Once packed, you label the product with the delivery details, with the details from the order form. You should make sure there’s a clear and automated system for labelling in the warehouse.

Delivery and tracking

Once labelled, the order is then dispatched into the delivery system. In some cases, the warehouse and delivery service might be the same provider. But not always.

Either way, the package needs a unique ID tracker from the delivery company which you use to track the delivery.

Ideally, the systems integrate so the customer is also sent this ID number when you dispatch the order.

This helps them track when their order will arrive. They can go to the delivery company’s website and enter this ID, where at each key point in the delivery journey, the delivery status will update.

The last mile and delivery

Once the product’s moved to the nearest central storage area or distribution centre to the delivery address, it enters its final stage.

This is where delivery to the end customer takes place.

This is often referred to as the last mile. In an ideal world, it goes smoothly and there’s no issue. But, in reality, there can be issues. These add costs and often lead to customer enquiries and complaints.

Online store customer enquiry and complaints examples

So, what happens if something goes wrong and the customer isn’t happy with the delivery? If you can’t resolve their problems, not only do you lose their business, but they tell other people your service is bad.

You should identity and prepare for common service scenarios. To keep customers happy, you’ll need clear systems and processes to handle enquiries and resolve issues.

For example, common customer service enquiries you get in D2C would be :-

“I ordered it X days ago, and it has not shown up”.
“The delivery tracking number I got isn’t working”.
“I didn’t get an order number”.
“The status is saying it’s delivered, but I don’t have it”.
“I ordered product X, but product Y got delivered” .
“This product is not what it looks like on the website, I want a refund”.
“I ordered X number of products, but only Y number of products arrived”.
“The product arrived damaged, and I want a refund”.

These are just a small sample of typical scenarios which happen with D2C deliveries. For each question, you have to work with the warehouse, the delivery company and your customer service teams to define how to respond.

Chargebacks

In most cases with unhappy customers, they’ll ask their credit card company to refund the payment. The payment company will then ask you to pay them back the money.

This is called a chargeback.

There’s often an admin fee of $25-$50 on top of the actual payment amount for the transaction too.

Clearly, you want to minimise chargebacks as much as you can. They burn into your profit margins. Keeping your customers happy helps prevent this.

Most online orders go fine. But accept that sometimes, things will go wrong, and it’s on you to resolve them. Fixing these order issues adds to your overall costs. But, they also help improve your reputation for good customer service. Don’t underestimate this. This is often more valuable in terms of creating more loyal, happier customers longer-term.

You should allow for around 5% of your online store business model costs to cover these sorts of customer service issues.

Problematic customers

Where it can be problematic, is when you get less honest online shoppers trying to game the system.

If they know you always give refunds, they might place repeated orders and claim multiple refunds.

It’s important then to be able to identify these specific cases, and put measures in place to manage them.

At the most extreme, you can block IP addresses from accessing your website at all.

But normally, you’d use registration and payment gateway details to manage the journey more smoothly.

So, you can identify and direct specific problematic shoppers to pages which say products are unavailable. You should also make sure your terms and conditions protect you. Your aim is to make it as easy to shop for genuine shoppers. But also to make sure problematic shoppers don’t advantage of your systems.

Prepare for order processing

It’s important to remember that customers don’t really care about your website. They care more about what your website can do for them. That means you need to have a clear and efficient order processing system, so once the place an order, everything runs smoothly and their order arrives at the right time and in a good state.

The 3 key areas to focus on to make sure you’re well prepared for order processing are to make sure you’ve done :-

order processing tests – put dummy orders through the system first to check payments, delivery and customer service links all work properly.
data management set-up – make sure both individual customer data, and aggregated order data is easy to access and manage. Your customer service team will need this to manage enquiries and complaints and you’ll need it to update your e-Commerce dashboard.
point of delivery management – place test order before you launch, and check the time and condition they arrive in. This will mean working with your delivery partner and setting up key protocols like permission to leave and order tracking.

Prepare for Customer Service

The order to delivery process can be complex to set-up. But, once the system starts working, it should become easier. But, you never know exactly how customers will interact with the system.

Even though you prepare for the most common situations, there’ll always be customer enquiries you can’t predict.

You can add the most common questions to a Frequently Asked Questions (FAQ) section on your website to reduce the number of enquiries. But be prepared to get Infrequently Asked Questions too.

Make sure your online store website has clear ways for customers to contact you in these cases.

Usually, this’d be by phone or email, though social media messenger services and chat apps can also work.

This means you need to prepare the technical infrastructure to manage these enquiries.

So, you’ll need to set up phone number and any automatic call management system for example. You’ll need to set up a shop email address. And, you’ll need to make sure the right people have access to all the necessary systems.

Train your customer service team

You need to train your customer service team on how all these systems work. They also need to practice how to answer common questions, and what to do if they can’t answer a question.

You’ll need to decide if one person is responsible for the overall order to delivery process. Or it’s a team of people, each responsible for different stages.

Whoever manages customer enquiries needs to be familiar with the products, the store, the terms and conditions, and all the system touchpoints in the order to delivery process.

They need to be able to access specific customer order details, and manage refunds, chase up the status on deliveries and deal with returns or damaged goods.

Customer service is a vital part of the online shopping experience. Bad customer service can drive customers away. It can damage your reputation. Aim to deliver reliable customer service, that improves as your online sales continue to grow.

In our guide to managing an online store, we cover more ways in which you can continue to build improvements in customer service into the way you manage the order to delivery process.

Conclusion - Order to delivery

Order to delivery is one of those e-Commerce areas which can feel like a lot of work. But the secret to doing it well is all in the preparation. Before you launch, you want to test out as much as possible how payments, storage, delivery and customer service will work. As this guide has shown, much of it is driven by systems and processes. And if you can get those to work properly, the order to delivery experience for the customer should run smoothly.

Three-Brains and e-Commerce

We’ve worked on many e-Commerce projects and have good experience across strategy, working with online retailers and building D2C stores. We know how to connect these expertise areas back into your e-Commerce capability plan to grow your sales.

Downloadable D2C status dashboard

Setting up an online store needs you to define your strategy and plan, work out the sales and marketing and also set up the whole operational side of the business including the finances and the delivery / supply chain model. It can be complex to manage.

That’s why we’ve used this project dashboard to great success in the past to have a simple one-page summary of the key actions require to set-up and manage a D2C online store. Download it here or from our resources section.

Powerpoint and Keynote versions of this document available on request.