The holiday shipping season is just around the corner. It’s the busiest time of year for everyone in the shipping industry—UPS and FedEx deliver more than a billion packages, while making a healthy profit on holiday surcharges; customers expect fast, low-cost delivery without mistakes; and shippers have to meet their stressed-out expectations while maintaining their bottom lines.
Every year, customer expectations for online holiday shopping gets harder to satisfy. It’s their expectations that dictate what e-commerce marketplaces and shipping-based companies offer and how quickly the world’s largest carriers have to deliver their orders.
Here’s what consumers want in 2018, and what your company can do to prepare.
Resource: How “The Amazon Effect” and Changing Customer Behavior are Shaping the Parcel Landscape
1. Free Shipping With Fast Delivery
All year, customers expect two-day shipping to be free and standard with expectations rising faster than ever. According to data presented at the Shoptalk e-commerce business conference in May, 31 percent of shoppers said they requested same-day delivery last year—this is up from 17 percent just a year earlier.
About 47 percent of customers have paid for same-day or next-day delivery. And more than half of shoppers said they would abandon an order if delivery or estimated arrival times weren’t fast enough.
But during the holidays, they may demand those packages in a moment’s notice. It’s essential that shippers offer next-day air delivery—and even same-day service in markets where it’s available.
If your customers typically choose free shipping, standard shipping, in-store pickup or just don’t take advantage of expedited shipping, make sure you have a plan in place for the holidays. Talk to your carrier representative about the logistics of same-day and next-day delivery. Ensure your staff knows how to fulfill and ship such orders. Strategize around the transit times and deadlines that you can offer.
And finally, let your customers know that a different shipping methods with quicker delivery times are available. It may just get you some extra holiday business you want.
2. Money-Back Guarantee Promised With On-Time Delivery
However, offering your customers fast deliveries doesn’t mean much if carriers can’t keep those promises.
2016 was a bad year for holiday deliveries. Carriers couldn’t keep up with a huge spike in orders from e-commerce retailers, and many packages were delivered late during peak season—some even after Christmas Day. Because of carrier performance, shippers were forced to do damage control with their customers.
The next year, carriers tried to plan better. They hired thousands of seasonal employees and funded them with peak season surcharges. But demand from e-commerce retailers exceeded even their raised expectations.
Fortunately after some early slowdowns, carriers were able to adjust. According to a report in PARCEL Magazine, on-time delivery decreased by about 4 percent industry-wide. Ground shipping performance fell by 5 percent, while overnight and second-day shipping performed better.
Another factor is the growth of e-commerce marketplaces for large, bulky packages—think Casper mattresses, Wayfair furniture and other home and garden appliances. These packages are more expensive to ship because they require more fuel and additional labor from carrier staff. They also take longer to move.
Most of the time, carriers include on-time shipping deadlines or a money-back guarantee clause in their contracts. These clauses say that if a package is even 15 minutes late, shippers can request full refunds.
But as carriers have struggled with on-time order performance during the holidays, FedEx and UPS have added blackout dates to these on-time promises. Typically, they include the weeks between Thanksgiving and Christmas. During those weeks, shippers can’t request refunds if packages were delivered after the estimated arrival time.
During the holidays, it’s likely that your carrier’s on-time performance will dip. Prepare for it proactively. If you notice lapses or have specific concerns about shipping deadlines, discuss them with your carrier representative to see if you can make changes. If it’s not already a habit, make sure you audit your invoices and claim any refunds you’re owed for delivery of late shipments.
And if your carrier can’t meet your needs, consider other options.
3. Multiple Package Delivery Options
Customers expect fast, on-time delivery during the holidays as much (if not more) than they do during the rest of the year. But FedEx and UPS are stretched thin during November and December. If you’re worried about carrier performance, you may consider a different shipping option with a temporary multi-carrier strategy.
Using multiple carriers often offer more flexible customer service, which can be an advantage during the stressful holiday season. And as you think about positioning your company for 2019, this could be a good opportunity to test using multiple carriers.
If you need a trusted partner as you design a plan for the holiday shopping season, reach out to Reveel. Our consultants can help your team audit invoices and ensure you’re collecting refunds for late deliveries, figure out when your carrier’s blackout dates are and examine options for working with multiple carriers. And our pricing model is our gift to you this (and every) year—we don’t get paid if you don’t save money.
Start with a free invoice audit today to see how Reveel could help your company’s bottom line.
