The 2013 holiday shipping nightmares stemmed from the perfect storm of record-breaking weather, combined with retailer over-promises and carriers taking on more last-minute parcels than they could handle. With e-commerce still on the rise, everyone needs to prepare for the unexpected this year. 

Carriers have invested tens of millions of dollars to augment their capabilities, but even with expanded capacity, there are only so many packages that can be handled on the day before Christmas. 

Since they can’t control the weather, leading retailers are focusing on the things they can control —including three strategies that can help ensure a satisfying experience that builds loyalty and boosts revenue, while reducing shipping costs and vulnerabilities. 

Less Reliance on Last-Minute Shipping
By definition, the extent to which you replace parcel shipping with other forms of fulfillment — such as click and collect or ship-from-store — lessens your exposure to carrier delays and gets products to customers faster and more cost-effectively.

Beyond these benefits, giving customers greater choice of when and where they receive purchases provides a personalized experience that builds loyalty. Retailers offering in-store pickup have found it to be very popular — consumers like it because it reduces their shipping expense and increases timing certainty, in some cases providing same-day delivery that online lacks. And by driving customers into stores, these strategies better leverage physical store assets — they grow same store sales by increasing traffic and providing opportunities for add-on and upsell.

However, successful execution of local fulfillment requires planning. Retailers need to have a seamless, omni-channel store pick up and ship-from-store capabilities. When each store becomes a mini-warehouse and fulfillment center, it’s critical to have robust inventory and shipping management systems that, ideally, integrate with ordering processing and routing optimization. At the store-level, local staff requires training so they can pick and ship products in a timely manner — and they need to be able to assume these tasks while still handling their direct customer-facing responsibilities.

With strong execution, store-level fulfillment can be a win-win. Retailers gain competitive advantage by significantly improving the customer experience while simultaneously increasing sales. In a season that accounts for as much as 40% of annual sales, it’s an opportunity that even mid-size and smaller retailers should not overlook. 

Laser-Like Focus on a Flawless Customer Delivery Experience
Shipping has become a major part of the shopping experience across all channels. To deliver on the promise of omni-channel retail, you must deliver on backend fulfillment. Regardless of how a customer chooses to buy and ship, the entire experience needs to consistent and seamless.
Customer satisfaction is based on meeting or exceeding expectations. When it comes to shipping, every consumer makes a personal decision that balances cost with receipt timing. Store pickup is popular among consumers because it’s free and very immediate. On the other hand, when a consumer uses a parcel carrier, the cost is always certain, but the timing is often a range.

This is why tracking is so important. Giving customers visibility to where their purchase is in the shipment cycle builds confidence and alleviates uncertainty about when it will arrive. Real-time, detailed tracking on each parcel also provides customer service with the information needed to answer shipping-related questions and resolve problems — whether it is in a store, via a call center, online chat, email or text. Your service personnel also benefit by having this information when they’re dealing directly with the carrier on behalf of the customer. You’ll need to integrate tracking information into your channels, inventory, and order management systems, plus you’ll want this data when evaluating carrier performance and negotiating contracts.

According to a recent survey that we conducted, 80 percent of people who purchased a product consider shipping to be an important factor in their overall shopping experience. The profile of shipping performance rises during the holiday season.

This year, many retailers are successfully taking greater control of the holiday shipping experience to better meet customer expectations. Retailers of all size should explore how they can use these strategies to improve the customer experience, gain competitive advantage, and contribute to their bottom line.

The flexibility to switch carriers—at any time
Diversifying parcel carriers is another way to protect against holiday season shipment delays. While the two national carriers, FedEx and UPS, dominate parcel shipping today, regional carriers are gaining ground.

There are hundreds of regional carriers that range from those that cover small regional areas such as single cities or partial states, to multi-state regionals. They have higher density over smaller geographic areas, so they can often provide more ground-delivery options than the national carriers.
While leading retailers have added regionals to their carrier mix, small and mid-sized shippers have been slower to adopt. Using regional carriers provides an opportunity to improve customer service by expanding next-day delivery options, introducing incentives—such as flat-rate shipping or free-pickup—and offering flexibility to meet special customer circumstances. You may also be able to negotiate better pricing, which can be passed on to customers or used to boost profits.

In addition to regional carriers, you should also consider the USPS. In 2013, the Postal Service handled a 19 percent increase in holiday package volume over the previous year, and did not have the delivery performance challenges of the private carriers. The USPS is also making strides to become an even stronger parcel shipping competitor. This past year, USPS introduced the Intelligent Mail® Package barcode (IMpb) which gives shippers the same granular, end-to-end tracking visibility as FedEx and UPS. Using the IMpb, shippers qualify for the best possible rates and receive free parcel insurance. In many cases, USPS may now be the best carrier selection.

When expanding your carrier options, you should consider using a multi-carrier shipping management system. These web-based solutions have saved shippers as much as 25-40 percent, by automating carrier selection for each parcel based on the most up-to-date pricing, service options, and business rules.
Retailers who use a mix of national and regional carriers reduce vulnerability to any one carrier’s service problems, better serve their customers, and increase their shipping efficiency. While it makes sense to use multiple carriers year-round, it’s most critical during the holiday season “crunch,” when both customer expectations and shipping volumes are at their highest. 

Christoph Stehmann is President, Ecommerce & Shipping Solutions, Pitney Bowes