To no one’s surprise, the 2018 holiday retail peak season was incredibly busy.
According to Hanover Research, the holiday shopping season accounts for anywhere from 16 percent to 30 percent of all annual retail sales. The share of those sales that are made online keeps growing with e-commerce sales rising 13.5 percent year over year on average.
The holidays can be quite hectic for digital retailers who just want to get gift items to their customers on time. Businesses are willing to shell out exorbitant payments for rush shipping to keep their customers happy. We know this because shippers tack on holiday surcharges every year, and we keep paying them.
For what it’s worth, the same frenzy overtakes many of our customers during the holidays. They just need their packages on time. Price may take a backseat to the promise of delivery and transit times before Christmas Day.
But now that the holidays are over, everybody’s calming down. Online shoppers are back to their usual thrifty ways, comparing one price against another and trying to spend as little money as possible. The trouble is they’ve still gotten accustomed to quick delivery. Maybe not overnight as during the holiday season, but at least within a few days.
What can you do to keep customers coming back all year long? Here’s what we know.
Free Standard Shipping
According to Hanover Research, the number one reason shoppers report dissatisfaction with their delivery experience is high shipping costs. Half of online buyers abandon their digital shopping carts when they encounter unexpected shipping costs, and choose to leave their items sitting there unpurchased.
We know that steady holiday shoppers—those of us who manage to plan ahead, not those of us who procrastinate—expect free shipping, and aren’t willing to pay for shipping unless they have to. During the rest of the year, all of us expect this.
Of course, delivery is not free. Online retailers pay more every year to UPS, FedEx, DHL, the U.S. Postal Service and other shipping carriers to deliver buyers’ goods in a timely fashion.
Retailers just need to make it look like it’s free. Of course buyers are paying for shipping—we just need to keep them from see those shipping costs as an afterthought.
That means we need to stop treating shipping costs like an afterthought. This year, build package delivery into your budget. Then, build it into your pricing structure so that you can offer “free shipping” all year long.
Wanting Packages Delivered Now
The proportion of customers unwilling to wait the standard 8 to 12 days for ground shipping increases every year. According to Hanover Research, 63 percent of online shoppers expect three-day delivery. Remember, these shoppers still expect this standard shipping to be free.
Younger shoppers have shown that they’re willing to pay for shipping faster than three days. If possible, we recommend offering a variety of options so customers can pay as much as they’re willing for delivery at a moment’s notice. Same-day, next-day and two-day shipping are all good expedited shipping options.
That said, we’re seeing more customers who say they’re willing to pick items up themselves, even if they’ve bought online. Target and Walmart have both rolled out curbside pickup services. FedEx has long permitted pickup at its FedEx Office locations, though isn’t necessarily cheaper than standard FedEx shipping.
In-store pick-up options allow buyers the flexibility to pick up packages when they please while being able to trust that they’re secure. If your business has a large enough ground footprint or strong enough partnerships to offer pick-up in addition to home delivery, consider working it into your suite of services.
Free Returns
January is the month of returns. $68 billion in merchandise is returned after the holidays in the U.S. Yes, that’s a big impact on the bottom line, but not so big that retailers shouldn’t make returns as easy as possible.
When buying gifts, customers read return policies. Many buyers prefer retailers that make returns as easy as possible. Customers are often more willing to patronize companies that offer free returns (especially free returns by mail) than those who make returns cumbersome and expensive.
When returns are hard, many customers call them a top source of dissatisfaction. But when they’re easy, they can inspire loyalty. Customers will happily revisit a retailer who made an often frustrating process easy and affordable.
What Does This Mean For Shippers in 2019
Even if 30 percent of your annual sales happen during the holiday season, the bulk of most retailers’ business is conducted during the rest of the year. It’s less hectic for everyone. This is the time to improve your processes, experiment with new offerings and win over loyal customers who are likely to return in January. They may even buy a few gifts for friends and family.
Stay focused on how your offerings make your customer feel. The easier you make buying— even if it’s challenging on the back end—the more likely it is that your customers will return all year.
The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, and rate modeling/simulations, you can see the health of your operation and assess pricing changes from parcel carriers like FedEx and UPS. Sign up for a free Reveel account today to see how you can leverage automation to synthesize your data, ship more for less, and reduce the time needed to identify issues and action items.
