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Every ecommerce retailer will need a best-fit shipping option based on its profile and customers. But how does it work out the match? Christian Annesley looks at the challenge.
If it goes smoothly, the simple act of delivering a parcel or package on schedule, with an unblemished product inside, and with tracking of the purchase on its journey en route, will go a long way to keeping the online customer satisfied.
It sounds simple. But for customers, it’s not so long ago that staying in for a major delivery – a new washing machine, let’s say – involved an all-day wait at home without any precise indication of when the promised item would arrive. And, when it did show up, any problems with the item could take some serious sorting out: perhaps some long-winded calls to contact centres and, for the really unlucky, more waiting in for the return to go back out and the replacement to arrive.
In 2017, there are inevitably still deliveries that aren’t delivered first time – and some nuisance caused along the way. But the growth of ecommerce, and the parallel march of delivery options and technologies that support logistics, has gone a long way to changing doorstep deliveries forever. For the retailer today, it’s become a question of finding the best – and best-priced – option to deliver for customers in what’s now a busy marketplace.
Engagement ring retailer Taylor & Hart started building a strategy by looking at what the competition was doing.
“We asked a lot of questions about their policies, returns and anything related to the delivery. And we bought from a few of them to see how the process feels from a customer perspective – and to identify opportunities to take things further,” says chief executive Nikolay Piriankov.
How should you display costs?
Tom Jeffry, head of ecommerce at luxury fashion store Jules B, says they advertise costs at the checkout.
“We have shipping by country. We try and make them as close to true cost as possible - we pass logistics costs onto the customers. However, we offer as many free options as possible,” he says. “In America because of the vat saving we can offer free shipping, in mainland Europe we pass the cost on.”
This is easier for Jules B to manage because they negotiated flat rates with their carriers. This is either offered by delivery companies as standard (Parcelforce Worldwide offers a flat rate to Europe, for example) or when an ecommerce business reaches a certain volume of orders (normally calculated based on total international volume, rather than on a country-by-country basis).
From this point, says Jeffry, they looked at the average weights of items to make sure they aren’t left out of pocket. “We know the majority sit under 1-1.5 kilos, as long as we have that secured and the average, we can put the cost right in between that,” he adds.
Indeed, working direct with carriers can reduce costs too. When Taylor & Hart looked at shipping costs it found it made sense to work directly with the courier rather than with a third party. “Why? We have been able to negotiate volume discounts already. By working directly and building up our volume we get improved prices,” says Piriankov.
What about returns and free delivery?
A key part of shipping options is returns, which can have a big impact on reducing cart abandonment and increasing conversion. That said, it can be difficult for ecommerce businesses to manage, eating into already slim margins and creating issues with stock keeping.
“They cut into profit margins and can cause a lot of logistic and administrative hassle,” Iris Anson, founder of Solely Original Limited, explained: “A well-streamlined policy and logistical execution is needed and it demands creating processes that are not only transparent for the customer, but also feasible for organisation.”
It’s become much easier for ecommerce businesses to arrange returns. For example, Parcelforce Worldwide allows retailers to generate a label from its shipping system and email it to the consumers overseas. In some cases it’s possible to include a pre-paid label when you send the goods too. For more information, read our article about returns options on UK Business Forum’s sister site BusinessZone.
Offering free delivery is one of the most powerful weapons in any ecommerce director's arsenal. Anecdotally, we know that this is not just something that drives conversions, but can underpin marketing campaigns; consumers love free shipping.
It’s hard to compete with.
“One of the biggest challenges is that we don’t do free shipping and competitors are running free shipping all the time - from a marketplace perspective it is becoming mandatory. The days of charging for shipping are numbered,” says Jules B’s Jeffry.
Four ways retailers can better explain pricing
Delivery costs and returns are important factors in many a customer’s online buying decisions. Here are six other ways to ship smarter:
Piriankov and others all note there is a lot of innovation in this space, and especially around international shipments as the volumes grow.
“With all these services to compare, there is opportunity. For example, we're using the high value of our orders, with relatively low UK mailing costs, to engage more with our customers by trialling sending out little gifts in the post after they buy. In our case, our engagement ring customers are often planning a wedding soon after they propose, so we thought a nice pack with some promotions related to wedding related costs and brochures could be relevant.
“Sending them something physical to look over makes us a more personal, physical brand: it helps to narrow the gap between retailer and customer.”
Parcelforce Worldwide has over 25 years of experience delivering parcels in the UK and overseas. Reaching 99.6% of the world’s population, your parcels are in expert hands, with a choice of speed and options including a flat rate to European destinations for parcels weighing up to 30kgs. Find out more about Parcelforce Worldwide’s services here.