Shipping options are a massive part of your ecommerce strategy. A study by retail TouchPoints showed that 65% of customers want greater flexibility in their delivery options, and 61% want faster deliveries than they currently receive. Another study from Accenture revealed that 66% of customers had chosen retailers based explicitly on their delivery options. With those numbers, you absolutely should be considering adding express shipping choices rather than just standard or ground shipping options. Offering faster shipping not only helps improve customer loyalty but helps you prevent abandoned carts and lost revenue.
What is Expedited Shipping?
Expedited service means that the delivery time is faster than the average transit time. The expected arrival time will vary depending on the shipper. For instance, FedEx has an expedited option that takes two business days while USPS has an option called priority mail express that provides either overnight or two-day shipping. Another factor that changes the delivery date is whether or not it is an international or domestic delivery. The shipping costs for fast shipping services usually come at a premium, but they also come with benefits such as real-time notifications and guaranteed delivery dates.
How Expedited Shipping Improves Conversion Rates
We already mentioned that a fast shipping time frame is a huge deciding factor for customers completing their checkout at an online store. Offering expedited freight services will not only help you improve your conversion rates but allow customers and manufacturers to trust you as part of their crucial supply chain. Here are a few ways that offering expedited or next-day shipping can help improve conversion rates.
Reduce cart abandonment
Beyond the statistics mentioned above, plenty of evidence shows improved shipping options reduce cart abandonment. A study by Kibo found that 40% of online shoppers said that if a two-day shipping time were not available, they wouldn't make a purchase. 63% expect that standard shipping should arrive within three days, which is a significant portion of your shoppers exiting for lack of 2-day or 3-day shipping options. This reason alone is a huge factor for why your company should consider implementing expedited shipping choices.
Meet customer shipping expectations
Shipments are often expected to have expedited shipping services due to popular ecommerce stores pushing quick delivery as a standard marketing technique. Huge companies have the infrastructure to make this fast delivery the norm, leaving many smaller businesses scrambling to compete. A recent DHL report showed that second to customer service, expedited shipping is the most crucial factor for achieving customer satisfaction. Not hitting these expectations makes customers less likely to finish their purchase at your store or come back for future transactions.
Build customer loyalty
Customers are reliant on consistent shipping, especially for time-sensitive items. By providing them with faster shipping options and delivery date estimates from shipping companies, you can help foster loyalty. When customers know that they can rely on you for last-minute orders or consistent delivery options, they will be more likely to return. Reliable, fast shipping options are a great way to grow your repeat customer base.
How to Offset Costs of Expedited Shipping
The cost of expedited shipping from different courier services is the main barrier of entry for many companies. To ensure fast delivery, retailers have to pay a premium for expedited shipping costs to the shipping carrier. This price also can change depending on the parcel's weight, dimensions, and shipping zone (for example, international destinations are much more expensive). But there are ways you can offset these costs with customers through a few different methods.
Require minimum spend threshold
Minimum spend thresholds help you ensure that you make profits while still offering fast freight shipping options. It is common for an ecommerce site to offer free expedited shipping if a specific cart price is met in one purchase. This method can also increase your average order value. A recent study from Harvard Business School showed that shoppers spent 9.4% more to meet a free-shipping minimum. Requiring a minimum threshold for free expedited shipping is an excellent way for you to offset costs and potentially boost sales.
Distribute inventory across fulfillment centers
By distributing inventory across multiple fulfillment centers, you can make offering expedited shipping much more cost-effective. While the initial investment may seem daunting, there are other benefits beyond faster and cheaper shipping, such as the logistical advantages. This shift helps with high-volume orders and overall makes your company more flexible and scalable, priming your business for growth.
Outsource fulfillment to 3PL
If opening more warehouses doesn't sound right for your business, you can also consider third-party logistics (3PL). These companies allow you to outsource parts of the expensive fulfillment process, such as storage, packaging, shipping, and returns. There are many advantages to this process if you don't mind outsourcing your shipping. For example, you gain access to an already robust and built-out network of fulfillment centers that allow for cheaper and more accessible expedited shipping. Consider the different advantages to various 3PL companies when looking to choose one that is right for your company.
Below are answers to common questions around expedited shipping.
What is the difference between standard and expedited shipping?
Standard shipping is considered non-priority and is a cheaper option than expedited shipping. While standard shipping typically takes 5 to 10 business days, expedited shipping often only takes 2 to 3 days.
Is expedited shipping faster than priority?
You often will hear the term "expedited shipping" used interchangeably with "priority shipping." This ambiguity is because priority shipping is an expedited shipping option that the USPS offers. It is a one or two-day shipping service that has $100 of insurance coverage.
Is expedited shipping next day?
Sometimes, expedited shipping can be next day, depending on the fulfillment center location and the package destination. However, overnight delivery or next-day delivery is usually a separate, more expensive option.
What's the fastest shipping method?
Next-day air or overnight shipping is often the fastest and most expensive shipping method. However, some companies do offer same-day shipping or delivery services. This accelerated delivery is usually accomplished through strategically placed warehouses and particular shipping providers, as is the case with Amazon's "Prime Now" option.
Does expedited shipping deliver on Sunday?
Depending on your shipping company, yes. For example, USPS does deliver on Sundays, depending on volume and package type. They prioritize priority mail and packages from Amazon on Sundays.
By keeping pace with larger ecommerce stores and providing reliable service to your customers, you will see an increase in profits and lower cart abandonment. While it seems like an expensive undertaking, you can offset expedited shipping costs in a handful of ways that also position your business for growth. By implementing expedited shipping services, you can help improve your conversion rates and build your customer base for your ecommerce store.