Twin Pains of Holiday Shipping
August 10, 2017
We all love the holidays, or do we? As a shipping technology partner, we’ve seen retailers of all sizes experience all sorts of pain when it comes to ‘joyful’ seasons such as the year-end holidays. In fact, research for the U.S. 2017 State of Shipping in Commerce report shows that 51% of retailers struggled with shipping during this traditionally busy period with small (55%) and enterprise (63%) retailers feeling the most heat. Let’s uncover the mystery behind why shipping is challenging especially over the holidays and what retailers can do to tackle it:
Up to 54% of shoppers cited shipping-related pains as the reason they abandoned their carts, so reducing shipping friction can have a significant impact on your bottom line. More than ever over the holidays, competing offers based on speed, price, and convenience of shipping services will determine if you’ve got the sale. How can you use shipping to increase your conversion rate?
Be Transparent With Shipping Costs
A majority (69%) of shoppers expect all duties and taxes to be calculated in the cart, and 42% won’t shop with a retailer again if they have to pay taxes and duties to release international purchases from customs, so make sure you’re set up to display all shipping cost at checkout to prevent unpleasant surprises at a time when consumer spending is at an all-time high.
Tap Into Free Shipping to Sell More
More so than shoppers in Australia or United Kingdom, 65% of American shoppers would increase their basket size for free hyper-local shipping (1-3-hour). Consider introducing ‘free shipping with a minimum spend’ to increase your average order value (AOV) or boost your holiday conversion rate by offering new customers with one-time free shipping, just as 38% and 14% of retailers respectively, did last year.
Offer Convenient Shipping Options
Online shopping is superior compared to physical stores due to its ‘endless aisles’ and 24/7 access, but a growing consumer phenomenon called webrooming (to research online and buy in a physical store) is proving that online doesn’t always win. More than half (63%) of shoppers this year admitted to webrooming: 68% Gen Z, 71% Millennials, and 72% Gen X. Take advantage of this by providing better shipping options that appeal to the unique needs of each shopper: Click-and-collect for penny pinchers, same-day or overnight delivery for last-minute gift shoppers, and weekend, guaranteed time slots or after-hours delivery for very busy bees.
We know that customer experience doesn’t stop once you’ve made a sale, but providing great service when you’re snowed under at peak periods can be challenging. With half of shoppers stating that they’re unlikely to shop with a retailer again when they’ve had a negative shipping experience, missing out on repeat business is a costly oversight when you’re too busy to pay attention to the details. How can retailers optimize the post-purchase stage?
Ship as Quickly as Possible
Ensuring orders are fulfilled at optimal speed will ensure that they’re getting out the door to your customers quicker. This also helps with managing carrier costs. For instance, if you fulfill an order within an hour for a 2-day delivery window you’ll pay a standard fee, but if you fulfill it in 12 hours you’ll end up paying for express delivery, which is costlier. Our data indicates that 16% of pure play retailers can fulfill orders in under 30 minutes, while only 7% of enterprise retailers can do the same.
Communicate With Your Customers
Tracking information is very important to online shoppers as nearly all of shoppers surveyed (96%) expect delivery date estimates at checkout and 78% expect email updates, yet only 51% and 31% of retailers respectively offer these services. Worryingly, a tenth of mid-market retailers this year admitted that their customers can’t access any tracking services. With many retailers imposing delivery deadlines over the holidays to manage expectations, limiting your customers’ view of where and when their orders will be delivered can be stressful for everyone.
Build Loyalty With Returns
It’s short-sighted to think that returns should be discouraged as it will encourage your customers to shop at a fairer competitor, so saturating this stage of the buying process with care can extend your customer lifetime value (CLV). Is it easy for your customers to return or exchange gifts and purchases that they’ve made over the holidays? 50% of retailers admitted that their returns process was difficult for consumers, while 49% said it was disjointed. With 64% of shoppers perceiving that department stores have a better returns policy compared to brand name stores, you’d be losing out on a chunk of holiday revenue if you’re the latter type.
While online shopping is not necessarily an exact science (yet!), retailers who seek maximum return on investment at peak trading periods need to take advantage of shipping as a profit-making tool. With a third of retailers intending to use ‘free shipping’ and offer alternative options such as after hours and weekend delivery by the next year-end holidays, making sure these tactics are supported by the right infrastructure can be the difference between profit and loss. May the holidays bring you the joy of record-breaking revenue!
To find out more about how shoppers and retailers are challenged by shipping friction, and what you can do about it, download Temando’s 2017 State of Shipping in Commerce report.
Temando (“I send you” in Spanish) is a global technology company that exists to connect the world’s logistical resources into a single intelligent software platform and to make commerce universally accessible to everybody. The company’s solutions give merchants the power to move goods from anywhere they are to wherever they need to be, no matter how they need to get there. Temando is a Neopost Company headquartered in Australia, with offices in Brisbane, Sydney, San Francisco, London, Paris, and Manila. For more information, please visit temando.com.