November 13, 2017
Originally posted on MultichannelMerchant.com.
Let’s get serious about shopping. Specifically shopping on two significant days on the ecommerce calendar: Amazon’s Prime Day and Alibaba’s Singles Day (meaning ‘Double Eleven’ in Mandarin).
Prime Day, an annual sales event for Amazon Prime members is in its third year running, resulted in the tripling of daily sales to the tune of $1 billion this year. Alibaba 11.11 Global Shopping Festival, known as Singles Day, leveraged the mass Chinese market and pulled in a gargantuan $17.8 billion last year, with this year’s event on November 11 fast approaching and expected to break records yet again.
One thing that both highly anticipated events have in common is their ability to orchestrate the shipping of over a billion digital purchases in a short, saturated amount of time. Let’s look at a few ways Amazon and Alibaba approach shipping – and how retailers of any size can infuse those strategies into their own operations.
Embrace Speed as the Name of the Game
Despite the increased workload, Amazon is committed to ensuring it stays on its path of customer-centricity by promising next-day deliveries and two-hour deliveries for Prime Day purchases. This is further boosted with the announcement on Prime Air – its own fleet of planes that will ensure last-minute purchases can still be delivered in two days.
The Mandarin term ‘Ji Su Da,’ or ‘fast delivery,’ is a familiar term for China’s supply chain and logistics industry. It is synonymous with Singles Day. Using this approach, Alibaba’s logistics arm Cainiao delivered 650 million Singles Day packages, and were one of the 2.68 million couriers who delivered an estimated 1 billion packages to 115 million customers. That’s a 43:1 deliveries-to-courier ratio for the day.
As consumer demand for fast shipping surges – 49% of consumers are willing to pay extra for same-day delivery, while 19% say they would shop online more if retailers offered hyperlocal shipping – it’s no surprise that these events are on a year-on-year upward trajectory. Speed matters.
Offer Breadth and Depth
Amazon is well known for its ability to deliver on speed, and it also excels at providing its customers with choice. Aside from offering free same-day delivery and weekend delivery, it allows customers to pick up their packages from over 2000 self-service locker kiosks across the U.S. Expanding the ways that customers can get their Prime Day purchases is beneficial not only to customers who crave flexibility, but also to Amazon as it removes a key cart abandonment culprit – shipping friction.
While Singles Day customers have openly grumbled about a lack of delivery consistency, Alibaba has put into motion a nationwide logistics and shipping network that will improve deliverability across urban and rural areas.
Up to 56% of last-minute shoppers will abandon cart and buy from a competitor when their preferred shipping service is unavailable, while up to 83% of shoppers will increase their basket size to qualify for hyperlocal shipping and 59% will shop more for free shipping. To boost conversion, consider introducing premium options such as same day or weekend shipping alongside alternative free options such as click-and-collect during the year-end holidays.
Treat Technology as a Shipping Partner
Amazon’s growing transportation fleet and fulfillment centers boost its ability to dispatch orders in a short time – a process that wouldn’t be successful without its technological prowess. Reports about Amazon creating an Uber-like mobile technology to book truck freight further highlights an online-to-offline approach to commerce that it shares with Alibaba.
Similarly, Alibaba is leveraging the power of technology to remove supply chain and shipping-related friction. Early this year, it announced a significant Maersk partnership for its OneTouch import and export service to help suppliers with shipments.
With both Amazon and Alibaba commonly touted as data-driven technology companies, their ability to harness data to determine the quickest and most cost-effective shipping rate is revolutionary for consumer and merchants alike. Already, quick-footed traditional ecommerce platforms are incorporating a seamless data-centric shipping process into workflows, such as what Magento did with its new solution to automate shipping and fulfillment for merchants of all sizes, industries and geographies.
With the year-end holidays round the corner, retailers need to find sustainable ways to manage the surge of online orders without losing sight of the customer experience or the bottom line. By taking a leaf out of how Amazon and Alibaba tackled shipping during their annual sales events, and applying speed, choice, and technology to your shipping and fulfillment strategy and workflow, any retailer large or small will be able to achieve big gains at home or abroad. The question now is no longer about how many losses shipping will incur, but how far it will help your business to grow – so why not explore its possibilities now?
Matthew Mullen, Board Director at Temando, SVP and MD of North America at Neopost Shipping