Many e-commerce businesses we work with are fully aware of the importance of delivering a positive brand experience to their customers. Where they often appear stumped is when we ask how their shipping process contributes to their ROI. In fact, many online retailers perceive shipping and order fulfillment as necessary investments that cut into profits.
They’re not totally wrong: shipping and order fulfillment can be expensive investments.
But, they don’t have to be.
The customer experience doesn’t end when the order is placed. In fact, shipping and order-fulfillment is a crucial touch-point, where a brand can establish that personal connection with the customer.
Customer trust and brand perception isn’t just built around product presentation and attractive prices; it takes careful packaging, competitive shipping rates, and safe and timely deliveries into account.
Here are 4 ways to turn ecommerce shipping and fulfillment processes into profitable avenues for positive ROIs.
1. Provide a Memorable Unboxing Experience
Opening a gift or newly delivered package is one of life’s simplest pleasures. Transform a simple unwrapping experience into an exceptional one by infusing your brand into every aspect from the external packaging down to the actual product.
According to a survey done by Dot Com Distribution, 40% of respondents said packaging played a huge role in brand perception: and that they were more likely to repurchase from a retailer if their products arrived in a gift-like or premium package.
So, what goes into an exceptional unboxing experience?
- The main shipping box should be sturdy, practical, and attractive. If custom printed boxes are too expensive for your budget, you can convert plain boxes into branded packages with brand stickers.
- Provided it’s not a fragile, wrapping your product in colored, branded, or crinkled tissue can produce a more anticipatory experience than bubble wrap.
- The same goes for the package filler. Stuff the box with tissue or excelsior instead of the usual Styrofoam peanuts.
- Include promotional inserts, like a special discount offer on their next purchase or a catalog of products they might be interested in.
- Include a personal touch to humanize your brand, like a thank you note or letter.
2. Carefully Plan and Provide Shipping Options
Shopping cart abandonment is a thorn in the sides of many e-commerce businesses. Over 76.2% of global retail orders end in abandonment.
And the main reason behind 63% of those abandonments? Expensive shipping.
Providing attractive ecommerce shipping options for your customers can positively impact your bottom-line: that’s a given. The easiest way out of this dilemma is to offer free shipping, right?
Well, logically, yes: 71% of shoppers surveyed by UPS said they were more inclined to make future purchases if the retailer offered free ground shipping and/or free return shipping.
But this can be a risky and expensive move for a business.
To begin with, you need to establish a free-shipping threshold: the price at which you’ll offer free shipping options. Using historical sales data can help you determine the right threshold. According to UPS, 2 out of 3 customers will add more products to their cart to meet the free shipping threshold.
Free shipping aside, you also need to establish competitive shipping rates that justify the prices of your products without driving your customers away. Here are some considerations in establishing your shipping rates:
Product Size and Weight:
If you deal in uniform sized products, then you can set a per-item zone-based shipping rate that is contingent on your customer’s location. On the other hand, if you deal with various product sizes, the best thing to do is to calculate your shipping rates based on what the top carriers like UPS, USPS or FedEx offer.
The simplest thing is to offer a domestic or flat rate on all destinations. On the other hand, you can also offer cheaper or free shipping option to locations closer to where you’re based, and then gradually increase the price the further you move away from your zone.
Most successful e-commerce businesses attribute their success to the shipping options they offer:
- Free shipping works best for promotional and profitable scenarios where customers can be enticed into adding more into their cart to meet your free shipping threshold.
- Same-day expedited shipping is ideal for local customers who purchase perishable goods or need the products immediately.
- LTL (Less than Truckload) options is ideal for shipping large orders and products, usually dealing with B2B customers.
- Free In-store pickup is ideal for businesses with brick-and-mortar stores, and provides an alternative to free shipping in brand promotion and trust-building.
Shipping Rate Options:
The next thing to consider is the best way to combine all of the rates for above-mentioned shipping options:
- Free shipping: you’ll have to factor in the rates you’ll be paying to your carrier and the revenue you’re generating through sales.
- Flat-rate and table-rate shipping: involves charging a consistent rate for shipping regardless of the purchase value. Table-rate shipping is a staggered approach which calculates shipping rates based on distance of the customer from the order fulfillment center.
- Live shipping rates: This involves plugging and getting your rates directly from your chosen carrier. This is ideal for niches that broadly provide this option, but it can be a risky endeavor for businesses that are still establishing themselves.
- Mixed strategies: This involves mixing the above three strategies to provide a combination resulting in the most profitable returns for the business and is reasonable enough to keep customers within their grasp. Examples of shipping combos:
- Standard shipping + Expedited shipping
- Free shipping + Standard shipping + Expedited shipping
- Standard shipping + In-store pick up + Same day delivery
3. Provide International Shipping to Increase Audience Reach
International shopping is increasing: according to a study by Pitney-Bowes, a third of online shoppers shop internationally.
Deciding on your international shipping options, however, needs a lot of planning.
There are many shipping factors contributing to product suitability besides international demand.
Durability is your product’s ability to make it across borders to your customers in one piece. Ideally, you should limit perishable and large items to domestic customers.
Eligibility takes into account both import and export restrictions your product may be subjected to. Different countries and shipping carriers have different restrictions, so it’s important to acquaint yourself with the pertinent information. For instance, here’s USPS’s list of restrictions.
- International carrier options: You’ll also need to consider which carrier provides the best options and rates for the country in question. Using a combination of carriers for your shipping needs may be ideal: one carrier alone may not have all the options you need to service all the countries in your target. There are three options you can choose from or use a combination of:
- International Carriers (FedEx, UPS, etc.) have both domestic and international services. These rates generally tend to be on the higher end.
- National Carriers provide shipping exclusively in one country. USPS or Australia Post are some examples. They generally offer lower rates than international carriers, but don’t have top-line tracking services.
- International Freight Forwarders are the generally the best option since they take care of the entire international shipping process like preparing and processing customs and other documentation involved in shipping internationally.
Shipping know-how and terminology: shipping violations can be pretty dicey, and can result in serious consequences, including heavy fines. Make sure you can maneuver your way through customs.
4. Sign Up for Shipping Insurance
What’s worse than a package that arrives late? A damaged package that arrives late.
And what’s worse than both of those, combined? A lost package.
And what’s the one common consequence they all carry? Your reputation as a trustworthy brand in tatters.
Unfortunately, owing to factors both controllable and uncontrollable, the shipping industry has a number of risks. Therefore, it’s good business sense to insure your shipments. If anything goes wrong, send a replacement item right away while you settle a loss claim.
Carriers like FedEx and UPS offer insurance, but the rates are high and disputing loss claims can be difficult. Be sure to use a third party parcel insurance plan provider like Cabrella, who offers higher coverage limits and lower rates, with highly efficient online claims processes and lesser restrictions. The sooner you’re able to recompense any losses that your customer has incurred, while at the same time, remunerating your own losses, the better it is for your bottom line.