Shipping Errors eCommerce Companies Continue to Make
When it comes to eCommerce, shipping is one of the most critical elements of your business strategy. You can have the best product in the world and outstanding customer service, but if you fail at the transport stage, you’re going to sink. Especially now, when Amazon rules the industry with their out-of-this-world offers, you need to stay competitive. So, avoid these shipping mishaps and stand out in a sea of mediocrity.
Why is an Outstanding Shipping Strategy Essential for Your Online Store?
Imagine, for a moment, that you’re an Amazon Prime member (one of an alleged 65 million people), which you might actually be; this means you’re used to seeing “Free 2 Day Shipping” with most of your online purchases. The standard is set.
One day, you decide to look for a new pair of sneakers. You wouldn’t normally purchase from this site because, after all, you’re loyal to Amazon and they truly streamline the user experience. But, this time, you decide that you’re going to check out your best friend’s cousin’s online apparel website to support his business. You saw an ad for it on your Facebook feed last week, and it seems like a good time to check it out.
So, you head over to his site, and you start shopping. Conveniently, he offers a pair of the exact Converse One Star’s you were looking for, and they’re $69.77. That’s actually not a bad deal. You’re sold. So, you add them to your basket and proceed to checkout. As you enter your personal information, you’re pretty excited to be supporting this guy’s business.
Then, you get to the shipping tab, and you see this:
What Happens at This Stage?
First of all, you’re not even sure how much 71.17 GBP is, but you’re certain that it’s more than $69.77. And, the shipping fee for your sneakers is going to be more than $16. Is it worth it? Do you even want to pay the additional shipping charges? How pertinent is it for you to do the conversion to find out, especially when you know you can get the same shoes on Amazon for less than $60? How long will delivery take if they’re shipping from overseas? If you’re like me and most other online shoppers, you’re not likely to buy anything on this website.
At this late stage in a sale, customers make a decision to either stay and purchase or leave your site. Those who leave may never return. This is just one scenario that could happen at the beginning of your checkout process (we haven’t even scratched the surface of transport). If you want to avoid a failure like the example above, take heed to avoid these terrible mistakes.
Critical Error #1: Presenting Customers With Surprise Shipping Costs
As of the fourth quarter of 2016, according to Statista, there were four predominant reasons why customers in the United States abandoned their shopping carts. The number one reason - why 86% of shoppers abandoned their carts - was “cost of shipping.” 72% of shoppers abandoned their carts because the cost of the order became too expensive. If you’d like to avoid failure at the stage of the initial sale, stop presenting customers with unexpected shipping costs.
Of course, online consumers are motivated by free shipping - you see this tactic virtually everywhere. According to Walker-Sands, 9 out of 10 consumers say that free shipping is their top incentive for shopping online. So, if this strategy works for you, implement it.
This is How to Offer Free Shipping if You Don’t Already
Shipping and handling aren’t free for you. So, if you’re looking at this prospect for the first time, it can seem counter-intuitive. But, a consumer-centric business is what people expect, and it’s clear that free is what they want. So, here’s how to make the shift.
Understand your shipping costs
The most important aspect of a successful free shipping strategy hinges on understanding the numbers. Every order is unique and every buyer is unique. One reason online sellers shy away from free or subsidized shipping strategies is that they recognize they are entering each sale at a disadvantage because they don’t know where their buyers are coming from or what the will by. Any miscalculation can have devastating margin implications. Some sellers take a volume perspective and accept that they will lose money on some orders, but with the right technology and a comprehensive understanding of your costs, every order can be a profitable order even with a free shipping policy.
Evaluate product pricing
Research shows that online buyers are willing to pay more for a product in order to qualify for free shipping. Adjusting prices can make up for lost shipping and transit costs. But this data cannot be viewed in a silo. Consider the value your overarching shipping strategy creates on order size and repeat purchase frequency.
Set a complete shipping strategy
If your product catalog is limited in size and diversity (like apparel or accessories) a blanket free shipping policy may be effective. But the more diverse your product offering is, the more unique (I like to think of it as more brand specific) your shipping policy needs to be. A few examples are:
- Minimum order size to qualify for free shipping
- Flat rate shipping policy where everything ships for $10
- Tiered flat rate shipping policy. An example would be where orders under $100 ship for $10 and over $101 ship for $25 and over $500 ship for $50
- Parcel shipments without oversize charges ship for free and larger parcel shipments and LTL shipments ship at a flat rate
- Subsidized shipping. You may just pass along 50% of the total shipping cost
- Transparent shipping where you allow the customer to calculate the totals in real time.
- Service-specific subsidies. This means you may offer standard slow services for free and upgraded services like 2-day or overnight at a flat cost.
The key to any shipping policy is that it considers what your buyers want. Some will stomach a small shipping charge if you offer a seamless checkout process. Many buyers are willing to pay for shipping charges for fast delivery or for large items.
Using modern technology, you can also incentivize buyers while they are on your site to build larger, more profitable orders while you calculate shipping behind the scenes, solidifying your margins in real time.
You may also be able to kill two birds with one stone by encouraging people to spend more on your site using perceived savings that also incentivize sales.
What if You Can’t Ship Your Products for Free?
Despite the clear benefits, some eCommerce entrepreneurs have their reasons for charging shipping fees; sometimes it’s necessary. If you’re a boutique furniture dealer, for example, it’s not easy to provide free shipping to everyone, even if your bump your prices up in an attempt to compensate for your costs.
So, what can you do to properly set shoppers expectations while ensuring the order advances all the way to the cart?Tell them that they’re going to pay shipping. And give them the ability to calculate the shipping prior to any registration process. Buyers don’t want to commit to your site by sharing personal data before you show all your cards. Real time calculations, clearly articulated flat rate shipping prices, and links to shipping polices pages are keys to establishing trust and making buyers more comfortable with shipping charges. These methods boost sales conversion rates.
Critical Error #2: Not Offering Proactive Tracking Updates
At every stage of the purchase journey, from discovery to delivery, customers want to be informed. In the current state of eCommerce, consumers expect to know exactly when their products will arrive. If you’re not offering tracking information for your orders, you’re limiting customer control and transparency.
No matter which platform you use to host your online store, there are numerous plugins/integrations that will automate this process for you. If you think automation is impersonal, you’ll be surprised to learn that 55% of online shoppers actually prefer interacting with technology than with a sales associate. And, there are plenty of added benefits, the most important of which is more consistent and more accurate customer communication.
What are the Benefits of Sharing Tracking Info With Customers?
We’ve already touched on transparency, control, and labor saving as perks of providing tracking data with your customers. If you’re not sold yet, think of these other, less thought of reasons to let customers know where their package is in a timely manner.
1. Reduce customer service calls.
2. Improve post-purchase net promoter scores.
3. Meet customer expectations.
4. Provide peace of mind.
5. Create a reliable, trustworthy experience to incent repeat buying.
6. Provide new opportunities for relationship-building and cross-promotion.
7. Free-up your sales and customer support teams.
Tracking information isn’t just for the customer - you can leverage it as a tool to grow your business.
This is How to Use Tracking Info as a Promotional Tool
You may be wondering how providing a simple tracking number can be used to promote your company. An optimized tracking information sharing strategy will have the following elements:
It will bring people back to your site (rather than send them to the UPS or FedEx tracking pages, for example) to see where their package is. Once a customer is back on your site, they will naturally want to browse for a moment, which could ultimately lead to more sales.
It will include cross-promotional opportunities in communications. Modern technology allows you to include ads, calls to action, and links to your social media pages and/ or promotional landing pages in emails.
It will include the name and contact information of a real person. Whether or not the customer decides to contact the person who sent an email or a text (they probably won’t), this helps build rapport, and a perceived relationship between the customer and the company.
By including these elements in your communication strategy, you grow and scale your business. Small details can have an enormous impact on your success.
Critical Error #3: Providing Slow Product Delivery
The industrial revolution disrupted commerce because it made shopping more convenient. Now, in the information era, we’re experiencing a similar shift. According to Feedvisor’s Amazon User Study, both Prime (60%) and Non-Prime (41%) members are deterred from making a purchase because of slow shipping. This trend aligns with the state of the rest of society: we want everything to be easy and we want it fast.
If you can’t provide customers with quick access to the products they want, they’re less likely to purchase. Instead, they’ll look elsewhere, and even settle on another product. So, the key is to provide super quick delivery.
How Can You Reduce Product Delivery Time?
If you’re still taking two to three weeks to deliver a package, that’s too long. According to BigCommerce, shipping speed influences where 80% of online shoppers make a purchase. Unless you’re offering specialized customization that makes production speed take longer, you want your customers to receive their goods within days, not weeks. If you need to reduce your product delivery speed, here’s what you can do.
1. Decrease fulfillment time.
Don’t let order processing time be the source of slow delivery times. While the product is still in your control, process it as fast as possible. Set and report on processing times. Outsource to a fulfillment house if necessary.
2. Add more carriers.
Depending on your needs, which continually change as your business grows, you may be able to find a faster option than you’re currently leveraging. Every carrier is not cheap and fast on every lane. Optimize every order.
3. Consult the data.
Are you paying more than your competitors? Are there carriers with competitive pricing with faster delivery times? Stop guessing and start making data-driven decisions.
4. Automate everything you can.
Technology improves processes by making them easier and, yes, faster. Use tools that make your job easier and increase your speed and overall ROI.
As you grow and scale your eCommerce business, avoid these three critical shipping mistakes at all costs. Instead, offer free delivery whenever you can. Make sure customers are able to track their packages, and pair communication with a promotional strategy. Keep product arrival speed to a minimum. By integrating these tactics into your business, you will create a mutually beneficial experience for you and your customers.
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