In the wake of the COVID-19 pandemic, even the smallest mom-and-pop stores are transitioning to ecommerce platforms. Thus, ecommerce shipping is fastly becoming the cornerstone of modern retail. So what are some tips small business merchants can use to strengthen their ecommerce shipping strategy?
Here are some tips to help ecommerce businesses delight their online shoppers.
Optimizing Shipping Costs
Ecommerce shipping generally refers to the entire order fulfillment process — from after an item is purchased from the shopping cart to how the inventory is selected from the warehouse to how the shipping carrier gets the product to its final destination.
But from the customer's standpoint, your store's shipping policies really only matter on two levels: price and speed. (Very picky consumers might prefer to choose the shipping company, but that's rare.)
Everyone can't be Walmart and offer 2-day free shipping, but there are specific tactics you can leverage to bring down shipping costs, so you can pass the discounts to your customer while also protecting your profit margins.
Weight and dimension matter
It's common sense; shipping costs are based on a package's weight and dimensions. You want to keep your parcels as small and light as possible, so remove any extra packaging that the product might not need. This tip isn't rocket science.
What you might not know is that carriers use a particular pricing model called dimensional weight (DIM) to determine costs. So when you are comparing carrier costs, keep DIM in mind.
Shipping carriers will compare a package's dimensional weight to its actual weight, and they will charge you whichever is higher. A huge but light box could be more expensive to ship than a smaller, denser package. To take advantage of the sweet spots in this pricing model, you will have to weigh and measure your packages and determine the DIM and typical weights.
To calculate DIM, you multiply a package's volume (length x width x height) and multiply it by the carrier's DIM divisor. Inconveniently, each carrier has its own set of proprietary DIM divisors.
Yes, it's annoying, but you will have to call each major carrier (FedEx, UPS, USPS, or even Canada Post and DHL) to ask for their specific DIM divisors. Then with a bit of extra math and the help of a spreadsheet, you can choose your best-cost carrier. (Note: this method works best when your packages are a consistent weight and size.)
Expand your fulfillment network
In the US, major shipping carriers divide the country into shipping zones 1-8. They use the zones to calculate shipping distance.
When it comes to combating shipping cost by distance, the only way to do so is to use strategically placed fulfillment centers. When you keep your inventory spread across fulfillment centers, you can reduce your package's distance to travel to get to the customer's location, which trickles down to the reduction of cost and transit times.
Using more fulfillment centers is also one of the only ways for businesses with smaller shipping budgets to offer 2-day or next-day shipping across a vast distance without resorting to more expensive air shipping.
Offer flat-rate shipping
Flat-rate shipping calculations require historical data or estimations. By understanding your overall shipping costs over a specific period, you can calculate how much to offer for flat-rate shipping.
While this tactic may not reduce shipping fees, you can use it to spread out shipping costs amongst your customer base to avoid shipping sticker shock for a particular customer. By not foisting a very high shipping price on customers, you can reduce cart abandonment and increase conversions.
Negotiate bulk shipping rates
If your business can guarantee a certain minimum number of shipments, you can negotiate with carriers for volume discounts. You can also look into shipping cargo through freight shipping.
The next critical aspect of online store shipping is the packaging. Here are some packaging elements to consider.
Marketers recognize a product's packaging heavily sways that customer perception. Today's most popular brands have shifted to custom-branded packaging to upgrade the entire customer experience.
The rise in branded packaging also dovetails with the rise in using eco-conscious shipping materials like boxes from recycled materials and paper tape. Companies like Packlane offer these eco-conscious, custom-branded packaging for ecommerce stores.
Beyond the box materials, there is also a conscious effort to reduce packaging waste. Remember the early days of Amazon Prime, where small items were shipped in inordinately large boxes? Not a good look.
As more and more consumers become aware of their carbon footprint and how consumerism impacts the environment, they become more selective in the brands they support. Switching to eco-friendly materials is becoming less an option and more a necessity to stay competitive.
One of the most significant advantages to packing your own parcels when your business is small is that you can add charming touches like personalized notes. The notes add a pleasant touch, and they are also an easy and effective way to ask for customer reviews if your business relies on them.
Even if you are beyond packing your shipments, many fulfillment options offer packing customization, including handwritten notes, although this customization will come at a premium. For example, Shopify shipping and ShipBob will pick, pack, and ship your packages to your liking.
Along with notes, many small companies choose to offer small freebies in the packages. Examples range from little candies to small accessories to product samples. These little gifts can be negligible in cost but go a long way in fostering good well.
Improving The Post-Purchase Experience
Your customer has completed their purchase and passed the checkout phase. Now they are excitedly waiting for your products. So, the next stage of a well-rounded shipping experience is the post-purchase experience.
Technically, the key to a smooth post-purchase experience begins even before the customer checks out. If you properly manage customer expectations beforehand, they will less likely feel disappointed. For example, suppose you offer international shipping. In that case, it's a good idea to make sure customers understand their local tariffs, so they aren't hit with an unexpected charge that sours their entire experience.
If shipping delays are expected due to the pandemic or the Suez Canal blockage, be upfront with your customers, and they will more likely be understanding.
First, your automation must be on point. Customers expect, at minimum, these automated email notifications: an order confirmation email and a shipment confirmation email with a shipment tracking link. These emails are non-negotiable.
There's also a move for automated text notifications. Most ecommerce platforms will collect these customer preferences and integrate them with your shipping solutions.
Beautiful and functional tracking pages
Did you know that customers check shipment tracking 4.6 times for each order? That's a lot of eyeball time. That's why it's crucial to invest in tracking pages that are both functional, offering real-time shipment tracking, and beautiful.
Tracking platforms like Malomo make it easy to create elegant, custom-branded tracking pages that integrate seamlessly with your shipping software. Malomo also makes it easy to offer product referrals that drive sales directly from your shipment tracking. Kill two birds with one stone — offer your customers the best shipment tracking experience while also turning it into your best marketing channel.
Handling delays with proactive communication
Even if you've done everything perfectly, unexpected delays — inclement weather or natural disaster — will happen. When they do, be proactive and honest with your customer.
Pre-printed return labels
Finally, sometimes things just aren't the right fit. Making the return process easier on your customer and including a pre-printed return shipping label is such an underrated practice. But really, who owns a printer anymore? Don't make your customer travel to print a label. They'll think twice next time they order from you because it's genuinely that inconvenient.
Why Is Shipping So Important?
Once your customer has decided to trust your brand and make a purchase, their expectations are set. If you want to cultivate customer loyalty, it's in your best interest to meet them where they expect rather than falling short. It's challenging to win back consumer trust once it's broken. With some customers, you won't get more than one chance.
The cost of a lead — acquisition vs. retention
Growing customer loyalty is vital. It's a well-known fact that it's easier and more cost-effective to drive repeat sales than to gain a new customer. Simply put, customer retention is cheaper than customer acquisition. Loyal customers also refer their friends, family, and colleagues, and word-of-mouth marketing and customer referrals are invaluable to the health of your business, so do everything you can to hang on to the customers you have.
It's In The Details
So there you have it. With some effort and attention to detail, you can offer your customers the most cost-effective and pleasant ecommerce shipping experience. Put yourself ahead of your competition and stand out by providing personalized packaging, reasonable shipping costs, and a thoughtful post-purchase experience.
Don't know how to get started? Schedule a demo today.