[Updated post from August 18, 2021]
Every retailer wants to fulfill orders perfectly. But what does perfect fulfillment look like? With expectations for seamless and memorable brand experiences higher than ever, the answer might not be as straightforward as you think.
Perfect Order Rate (POR) is a metric that's long been used by logistics providers and 3PLs to refine the order fulfillment and shipping processes. However, POR doesn't necessarily reflect what today's consumers are looking for in the brands they shop with.
In this post, we're going to explore what lies behind perfect order metrics, and what retailers should consider if they're planning on using Perfect Order Rate as a performance metric.
Perfect Order Rate (POC) is a key performance indicator in supply chain logistics that measures how well your fulfillment and delivery process is performing and whether current workflows are meeting customer expectations.
The benchmarks used to calculate perfect order rate varies depending on the business, but typically include the following:
Put simply, POR ensures that a business's continuous improvement efforts are targeted at removing the most common areas of friction in the customer experience, such as late deliveries or orders containing the wrong items.
But like most benchmarks, there's a lot more to a perfect order in today's world than on-time deliveries and order accuracy. If brands want to wow their customers, POR should be seen as the foundation for great experiences
There are a variety of ways that businesses can approach calculating their POR. The simplest method is to take the total number of orders shipped from a defined period and apply your indicators to measure the success rate of individual orders.
Let's say you received 500 orders in the space of a month and 56 of these involved an order error, such as a delayed shipment or damaged product:
56 / 500 x 100 = 11.2% error rate
This would give your business an error-free or perfect order rate of 88.8%. This provides a starting point for merchants to investigate failure patterns and identify how they can optimize fulfillment and shipping. For example, if your operation is struggling to achieve on-time shipments, there may be bottlenecks in the picking and packing process that are slowing down dispatches.
Of course, it's not a reasonable expectation for businesses to be able to fulfill and ship customer orders flawlessly every single time. Even with high supply chain performance, events outside of your control can falling delivery performance or order accuracy. However, striving for high perfect order metrics and minimizing order errors is the key to increasing customer satisfaction and loyalty.
Perfect Order Rate provides businesses with an all-around measure to understand accuracy and efficiency at a glance. This makes it straightforward to identify which stages in the supply chain are impacting the effectiveness of order fulfillment and delivery, and in turn, create mitigating strategies to lower the percentage of orders which have mistakes. To build trust with customers, brands need to maintain perfect order metrics and consistently look for new ways to fulfill orders more effectively.
While Perfect Order Rate is one of the most important key performance indicators, it does have limitations when it comes to CX management. Perfect order metrics, like orders delivered on-time and correct invoicing, don't capture the evolving expectations of customers in e-commerce.
In today's e-commerce landscape, delivering orders at the right time with the right items is not going to surprise and delight. This might shield you from customer complaints, but it isn't going to foster customer loyalty.
Shipping is one touchpoint that illustrates how what was once considered exceptional has now become the norm. Free standard shipping used to be a perk that made customers flock to an e-commerce store. Today, providing a combination of expedited and free shipping options that offer choice and flexibility is essential.
The growth and maturation of the e-commerce marketplace have refined what is considered a memorable experience – and this means our definition of the perfect order needs to change too.
Perfect Order Rate now extends beyond important supply chain metrics of on-time delivery and fulfilling the order correctly. To attract and retain customers, it needs to encompass a holistic view of the customer experience from the moment an order is placed to a seamless returns process:
Although it predates order fulfillment, a quality shopping experience is one of the most important elements of an enjoyable customer journey. If shoppers find it difficult to navigate your website and place an order, this can affect their confidence in your ability to deliver a seamless experience.
In an omnichannel retail world, customers don't want to be confined to one channel. By bridging the gap between physical and digital with O2O (online to offline) retail offerings, brands can meet consumer demands for convenience and nearly immediate gratification.
According to new research from Emarsys, 54% of consumers prefer brick and mortar over shopping via a smartphone (21%) or desktop (18%). In sum, the perfect shopping experience (and the perfect order) brings together the best qualities across all channels.
BOPIS (Buy Online, Pick-Up In-Store) BORIS (Buy Online, Return In-Store), and ship-from-store fulfillment all offer ways to streamline the fulfillment process by allocating inventory immediately to outstanding orders or storefronts, helping to minimize delays to order fulfillment and shorten delivery timeframes.
Today, nearly three-quarters of U.S. adults report being a member of at least one loyalty or VIP program. But persuading customers to join a program is one thing; getting them to participate is a much bigger challenge.
Loyalty programs can be a fantastic way to foster engagement and increase customer retention. But loyalty initiatives must interact seamlessly with every stage of the shopping journey to provide genuine value. Perks such as free shipping or free samples help to transform the fulfillment process into a value-added experience that contributes to your perfect order index.
However, it's important to monitor that these perks are being executed correctly during the fulfillment and shipping process. If loyalty members miss out on priority shipping or free samples that they are entitled to, this will cause customer satisfaction to plummet and will affect your Perfect Order Rate.
As online payment options proliferate, accepting more than just the standard credit cards has become more important than ever for retailers. Today's consumers expect flexibility over how they pay for their purchases - and even when they get to pay for them.
For example, the rise of Buy Now, Pay Later (BNPL) has upended consumer expectations for the online shopping experience. With BNPL to turn over $680 billion worth of sales by 2025, retailers who decide to opt out may see customer orders drop.
Payment options might not appear to have much to do with order fulfillment. But unless customers decide to complete that payment portal, they'll be no orders for you to process at all. Making the payment process easy and seamless, as well as having customer care reps on hand to assist with any questions or concerns, is the key to avoiding problems that may occur that can slow down fulfillment and prevent you from hitting KPIs.
Once an order has left the warehouse, it's easy to feel as though your brand has no control over the shipping process. Yet there are several strategies your business can implement to boost your perfect order index and ensure that your customers feel valued and supported while they are waiting for their order to arrive.
We are long past the era where a single standard shipping option is considered satisfactory to need a customer's needs. Some customers are happy with a delivery time window of a week or more so long as shipping is free, while as many as 70% of online shoppers are willing to pay extra for expedited delivery.
This is why traditional perfect order metrics that relate to delivery, such as orders delivered on-time and damage-free delivery, are no longer sufficient on their own to guarantee customer retention. If customers don't have a choice over how quickly their order is delivered, they may be unsatisfied with their experience.
Offering cheap or free economy shipping alongside, faster, more expensive delivery options empowers your customers to decide what method works best for them. This helps to increase conversions and customer satisfaction in the post-purchase phase.
The post-purchase stage of e-commerce is something of a squeaky wheel for many brands. When an order has been placed, attention is on ensuring that it gets fulfilled as quickly and accurately as possible – but often at the expense of communicating with the customer.
But getting the right items to the right place at the right time is no longer the only benchmark for a perfect order. If you tick both of these boxes, but leave your customers suffering from delivery anxiety due to a lack of proactive communication, they're unlikely to buy from you again.
According to a report by PwC, one-third of consumers will stop supporting a brand after just one negative experience. If you want to foster repeat purchasing behavior, you need to leave customers with a favorable impression that compels them to shop with you again. This is why post-purchase communications should be an integral part of calculating your Perfect Order Rate.
Every single time you process an order, there should be a corresponding confirmation email flow that guides the customer through every stage of the fulfillment and shipping process.
According to LivePerson's report, 83% of customers expect ongoing communication about their orders during the fulfillment process. Remember: fulfillment and shipping is a hidden process that takes place away from their eyes. The only way they're going to know about their order status is if you make this a part of your fulfillment workflow.
For the perfect order, you should make it a KPI to offer updates at the following points:
Today's consumers want to have full insight into the end-to-end shipping and delivery process, including estimated delivery date and time, possible delays, and their parcel's current location.
By implementing a real-time order tracking system, customers do not need to proactively reach out for updates from a customer support team. All they need to do is click the link provided in their order confirmation email and they can satisfy their curiosity about where their order is.
Order tracking also helps to build customer anticipation about their purchase, which works particularly well when combined with an attractive unboxing to enhance the delivery experience.
The moment of delivery is always eagerly anticipated by customers. But if a customer fails to receive their order on time or their order is not in the condition they expect, this less-than-favorable impression has a big impact on customer satisfaction.
Unboxing experiences, or the attractive presentation of a customer order through additions like premium packaging, inserts, and free samples, help to bridge the ‘experience gap' between buying products online and receiving them. It's a sophisticated customer retention strategy that helps to give purchases a higher perception of value.
Best of all, unboxing experiences don't have to break the bank; even small additions such as branded stickers and packing tape make a huge difference to the impression you make upon delivery. Adding custom fulfillment as a KIP for your Perfect Order Rate helps to change your focus from just logistics to ensuring brand consistency in the customer experience.
Customers love having control over their own experience. Why? Because it allows them to engage with a brand on their own terms. According to Bizreport, 73% of consumers want the ability to solve product or service issues without asking for help.
Customer self-service is when a brand gives customers the tools and resources they need to troubleshoot issues independently, rather than forcing them to contact a customer service representative. As well as increasing the bandwidth of your customer support team, self-service leads to high-quality interactions with your brand that increase trust. By enabling customers to decide how they want to handle an issue, you're creating a true customer-centered experience.
You can turn self-service into a perfect order metric by tracking what proportion of customers are using self-service tools, versus contacting your customer service team directly. If customers are seeking answers from representatives that they can find elsewhere, you may need to look at how you can better empower customers to take charge of their experience.
Given that retailers lost an estimated $816 billion worth of retail merchandise to returns in 2022, it might seem odd to include the return process in your Perfect Order Rate calculation. After all, surely you want to try and avoid returns at all costs?
Returns might not be the most desirable outcome for a business, but it represents one of your best opportunities to secure customer loyalty: 95% of consumers say that they would shop with a brand again after a positive return experience – but over half of consumers say they won't shop with a brand that doesn't offer hassle-free returns.
It's one thing to execute the perfect order during outbound fulfillment and delivery. But unless the returns experience is just as seamless, a customer is unlikely to shop with you again. That's why the following checklist is crucial to ensuring customer satisfaction:
Forcing a customer to wait days or even weeks for you to approve their return request is disempowering for your customers – not to mention causing resale opportunities to dry up and saddle you with additional dead stock. By contrast, a self-service return process enables you to reach KPIs involving swift return processing much more easily.
A self-service return is when a customer can complete a return without needing assistance or authorization from the customer service team. For example, giving customers a unique return link within their order confirmation email that takes them directly to a return portal. This also takes a huge amount of pressure off your customer care team, who often get tied up with administrative tasks involving returns.
The experience of shopping with a brand, whether online or offline, should be cohesive from beginning to end. Sudden changes to your brand identity during the shopping experience can create friction and uncertainty, especially when it comes to key touchpoints such as the checkout or return portal.
The return portal is where most customers will go when they want to return or exchange an online purchase. The portal takes customers step by step through the process of making a return, including asking for the order number and retrieving the merchandise from that order so customers can select which items they want to return.
Directing your customers to a fully branded returns portal, as opposed to a genetic offsite portal, creates a seamless brand experience that inspires confidence in your ability to coordinate returns smoothly.
Mugsy, a digitally-native men's denim retailer, required a reliable partner who could handle their high SKU count and a wide array of apparel. Ryder worked with Mugsy to set several key criteria for the perfect order; transparency, customization, reliability, and cost optimization, allowing Mugsy to make dynamic business decisions and maintain control over their shipping strategy. Ryder e-commerce's flexibility and expertise resulted in over 1000 orders being dispatched on time during the first week and a satisfaction rate of 99.5% from Mugsy's customers.
“The experience of working with Ryder versus our previous 3PL has been night and day. Our last partner hadn’t met their SLA once in the last six months we were working with them, whereas Ryder was hitting theirs from day one. This partnership has been transformational for Mugsy and our customers.” Scott Dulany, Chief Operations Officer at Mugsy.
To learn more about this successful partnership and its impact, read the full case study.
Monitoring your Perfect Order Rate may sound intimidating, but striving for flawless fulfillment and delivery is the best way to put yourself as close to 100% as possible. The more perfect orders that you complete, the happier your customers will be. However, it's increasingly important that brands redefine their definition of the perfect order and how they measure it as customer expectations evolve.
New technologies are providing new opportunities for brands to support their customers and offer unique experiences, taking e-commerce logistics far beyond the basics of high order accuracy rates or an accurate invoice. To truly surprise and delight your customers, these CX strategies need to be integrated into how you measure what percentage of orders are free of errors. This way, you can ensure that your brand stays relevant to customers and can foster lasting loyalty.
