The Amazon Syndrome
In 2005 a little company named Amazon launched a service called Prime and the world was forever changed. Today, the Prime subscription base has been reported to be as high as 90 million members, having increased by nearly 50 million subscribers in only two years.
Amazon Prime is a subscription service where Amazon members have the option to pay either a monthly or annual fee (at a discounted price), to receive a variety of benefits. One of which is free two-day shipping for Prime eligible items. After the launch of Prime, Amazon didn’t just improve their service offerings to Amazon customers; they incited heightened expectations of customers around the world.
For example, there is a remote area of China—Lhasa, Tibet—that relies entirely on Alibaba for raisins. Alibaba's raisin sellers learned a difficult lesson when the country’s infrastructure couldn’t handle fast delivery to this hard-to-reach community. When the raisins didn’t arrive in two days, buyers took to the review boards and lit up a firestorm of negative feedback.
Shipping requires both time and money, but customers can often be reluctant to spend too much of either to get their hands on a product. In today’s world, when customers make a purchase online, they enter each transaction with a strict set of expectations and tolerable circumstances.
Online Buyer Expectations—aka “The Amazon Syndrome”
- Shipping Should be Free—If Amazon can absorb the cost of shipping, shouldn’t all other sellers be able to do the same?
- Delivery Should be Instant—If Amazon can get it here in two days, why would I ever have to wait 3-5 business days?
Customers are beginning to view the luxury of free and fast delivery as the new norm. They want it cheaper and faster, and expect no decrease in quality of service.
Circumstances Online Buyers Will Tolerate
- A Fair Shipping Price—Most of the time, fairness is tied to the price of the shipping and not to a more realistic anchor like the item’s size, location or value of the purchase.
- Delivery Within the Communicated Timeframe—Longer timeframes are tolerable as long as they are communicated. If there are any issues along the way, it’s the seller's responsibility to keep buyers updated of any changes.
- Arrival Without Damage—This is damage to my pride or my purchase. The driver should be respectful and the package should arrive in perfect condition.
The advent of eCommerce has made everything in the world sellable. However, that doesn’t mean that everything in the world is accessible and, frankly, the customer doesn’t care. The second they place their order, their expectations have been set.
To avoid any confusion and keep customers happy, we recommend the following best practices:
E-Commerce Sellers’ Best Practices
- Provide Instant Shipping Prices at the Point of Sale—Don’t wait until a customer has reached the final step of the checkout process to surprise them with the cost of shipping, or worse, a message that reads, “Call for shipping quote.”
- Implement Fair Shipping Prices—Test subsidies to find a shipping pricing process that works best for your customers. This process may include free shipping, flat rate shipping, a partial subsidy or full price shipping. The right answer depends on the items sold, the cost of the item and the customer base.
- Promote Transparent Timetables—Maintain visible and honest timeframes, even if they are long.
- Keep the Customer Updated—Don’t be afraid to be over-communicative while the shipment is in transit.
- Pack Sufficiently—Invest in high quality packing materials to ensure your items arrive in good condition.
Trucks require expensive fuel, and delivery drivers need compensation to feed themselves and their families. Shipping costs money, and this is a fact that will never change. The money spent on shipping won’t give you the same satisfaction as wearing a brand new pair of boots around town. However, shipping is vital to both the success of your business and your customers’ happiness. So be sure to invest wisely in your shipping solution. It will pay off.