Online shoppers are faced with a set of choices to make each time they make a purchase, but there’s one big dilemma that has always been a source of frustration for customers and retailers alike since the birth of e-commerce. That dilemma is the question of ‘fast shipping’ or ‘cheap shipping’.
Often, this question can be solved by simply looking at the nature of the purchase and the product types being ordered. Large items, such as a big screen TV, can be very expensive to ship quickly; therefore most shoppers would be willing to select a more affordable shipping option, even if that means waiting a bit longer for delivery. Smaller items, for example footwear and apparel, are lighter and can be packed into smaller parcels, making it much more affordable to ship using faster shipping methods.
There are instances where things aren’t quite so cut and dry when it comes to shipping speed and cost. International shipping for example carries a unique set of challenges for e-commerce retailers, and most shoppers are accustomed to dealing with longer waits and higher costs for orders coming from other countries. Then there are customers who purchase many items at once, or the frequent shoppers, both of which usually expect a certain level of accommodation in terms of shipping speed or cost as an added incentive.
As e-commerce shopping continues its growth trend and becomes more ubiquitous in the lives of shoppers, their expectations when it comes to shipping speed and cost are evolving and becoming more varied, too. On one hand, it’s no longer unusual for shoppers to be happy with paying higher shipping costs for the added convenience of faster delivery times. On the other hand, there are many shoppers who balk at having to pay any shipping costs, opting for only those retailers offering free shipping.
Looking at each of these groups of shoppers, it becomes clear that while there are no rules that are set in stone, however there are certainly commonalities that the savvy retailer can capitalize on.
Why Fast Shipping Matters
Let’s first look at the importance of ‘fast’ when it comes to shipping options for e-commerce retailers. One of the biggest factors that has driven e-commerce growth is convenience. Shoppers now have a level of shopping convenience that was simply not achievable through physical retail locations. Shoppers no longer need to worry about store hours, long drives, parking, and the uncertainty of whether or not the product is actually in stock or not. Now, from the comfort of their own homes, shoppers can browse 24/7, check availability, and complete their purchase in just a few clicks. However, for many shoppers that’s where the convenience ends and the waiting game begins.
E-commerce retailers need to be aware that once a customer completes their purchase, their biggest concern from that moment on is how soon their order will arrive. This is why it’s so important for order processing, packing, and shipping to be fast and efficient in order to minimize the time it takes to get the order in the hands of the customer. For many customers, if the shipping time is even a little bit longer than what their expectations are, their satisfaction with their shopping experience drops significantly.
It’s critical that e-commerce retailers utilize trusted and reliable carriers for their products, and that their fulfilment processes are maximized for efficiency and accuracy. Making sure the order is packed quickly, accurately, and shipped out consistently is the key to keeping customer satisfaction high and delivering on expectations. Communication throughout the fulfillment process is also important, as it not only keeps the customer informed as to the status of their order, but also keeps them engaged with your brand, providing another opportunity to cross sell related products & services.
Why Free Shipping Matters
While speed of delivery is a critical factor for e-commerce retailers, many shoppers are placing even more importance on keeping the total cost of their purchase as low as possible. For this reason, free shipping options have become a virtually standard expectation for online shoppers. Offering free shipping can be a powerful incentive for customers to complete their orders, since this means they aren’t paying anything extra to have the added convenience of shopping online and their order sent right to their door. Thus, free shipping has become so commonplace that many e-commerce retailers feel forced to offer free shipping in order to remain competitive.
Offering free shipping can be done in a variety of ways that can help minimize the impact on margins and still offer enough incentive to capture the attention of many customers. One common approach is to set a minimum order value to obtain free shipping. By determining the threshold at which offering free shipping makes the most sense, e-commerce retailers can incentivize customers to build out their carts with additional products or add-ons in order to hit the threshold for free shipping. By achieving a higher average order value, customers still get the benefits they want in free shipping, and the retailer benefits from a higher profit margin.
Some Shoppers Demand Both Fast and Free
As you can see, customer expectations can easily swing in either direction based on their needs, the type of products, and the available shipping options. In fact, there is an increasingly large portion of consumers who want free shipping, and they want it to be fast. This presents an even bigger challenge for online retailers, especially as the biggest players in the e-commerce world adopt these tactics with greater frequency and across a wider range of products. In this article “Consumers want free shipping, and they’re not willing to wait very long for delivery” from DigitalCommerce360.com, a recent study has shown that free shipping delivery expectations are changing in the minds of many shoppers. Nearly half of those shoppers surveyed indicated that both free and fast shipping are equally important in their purchase decision making. Of course, this varies depending on the nature of the products in question and how essential they are to the customer, but it’s still a major shift. E-commerce retailers should be planning appropriately for these trends, as they will undoubtedly continue in to the future.
So, what does this ultimately mean for you? In general, it means that focusing on efficiency, reducing costs, and managing customer expectations will be critical to meeting the needs of a changing e-commerce landscape. Communication of expected delivery should always be clear and accurate in all instances to ensure that customer expectations are managed. Every opportunity should be taken to reduce costs and improve the speed of delivery for e-commerce orders.
Online retailers need to take steps now to prepare for the demands of their customers, and the ecommerce supply chain specialists here at SCI can help.
Contact us today and we will be happy to discuss how SCI can improve fulfilment efficiency, reduce transportation costs, and speed up delivery times for your customers.