According to eMarketer, ecommerce is continuing to grow at a rapid pace with more than a billion digital buyers spending about $1.5 trillion dollars online.
This represents a huge growth opportunity for US retailers to tap into in 2015. However, to be successful, retailers need to make sure they have the right shipping strategies and solutions in place to meet customer expectations and reduce the complexities associated with shipping.
As a matter of fact, recent research we conducted with 100 US merchants showed that when it comes to the weakest link in the fulfillment chain, almost half (47%) of retailers said that their company’s management of parcel shipping needs the most improvement.
This is even more important when you take into effect that 70% of Americans consider shipping options to be an important factor in the shopping experience compared to 66% in 2013, according to our recent research. Also, one-third (33% ) of consumers said they plan to pay more attention to shipping this year compared to last year, and half plan to shop online earlier this year.
So how can retailers sharpen their shipping strategies in 2015 to help meet customer expectations and position their businesses for success? Below are three opportunities.
1) Flexible delivery – A retailer’s ability to provide a variety of shipping options can make a difference in attracting new shoppers. After all, consumers like choices and evaluating options to meet their needs based on whether cost or delivery time is more important. Our research shows that when it comes to free shipping versus fast shipping, 82% of Americans find free shipping where the product arrives in five to seven days more attractive, while 17% prefer fast shipping where the product arrives in one to two business days for a fee.
Americans who find fast shipping more attractive than free shipping would be willing to pay $8.50 for the package to arrive within two business days. Relatively few (19%) would be willing to pay more than $10 for fast shipping.
Therefore, flexibility for adjusting parcel shipping by carrier and rates is invaluable. One way retailers can do this is by using a single, automated multi-carrier system that can offer a variety of carrier options including the USPS, which has become more competitive with the Intelligent Mail Package barcode. These powerful, yet scalable web-based solutions can enable retailers of all sizes to compare and select the most cost-effective shipment method that meets delivery requirements for every parcel shipment.
2) Expanding beyond the US – Cross-border ecommerce transactions drive a lot of complexity, but they are also a significant market opportunity for US retailers to grow their businesses.
Also, a recent global online research we conducted also showed that the US was the number one e-destination where international shoppers would purchase goods online from retailers outside their own country.
To tap into this opportunity, US retailers should consider what countries hold the greatest opportunity for their business. One way to do this is by looking at the purchasing power of consumers in each country and what products are the most likely to sell there. For instance, our study showed that 69% of consumers in China selected the US as the top country where they would buy online products from. Also, China has approximately 621 million Internet users. If you multiply these two numbers, you come out with a target of 428 million potential buyers in China. The most popular items that consumers in China are more likely to buy online from a retailer outside their own country are consumer electronics (53%), apparel (44%) and footwear including athletic shoes (38%).
Outside of China, India, Brazil and Japan are additional countries that US retailers might want to consider adding to their global ecommerce mix, depending on what you sell in your product catalogue.
However, adding new markets one-by-one can be a slow, resource-intensive process when relying solely on in-house capabilities. Also, countries take their import/export laws seriously, and if you don’t ship the right goods, to the right people, in the right ways, you could be subject to penalties or even denied entry to markets.
As a result, many US retailers who are ready to expand globally turn to third-party experts to simplify the complexities associated with global ecommerce, and provide the capabilities and the country-by-country know-how to satisfy both international buyers and local-market regulators.
With minimal set-ups, rapid integration and limited up-front investments, global ecommerce solutions providers can offer US retailers the support they need for rapid and successful entry into one or many new markets.
3) Effective returns – Returns have a long history of being a pain point for many customers and retailers. However, retailers can use returns as an opportunity to make a positive statement to customers regardless of the reason for the return. In addition, retailers must be proactive in providing the mechanism for clients to return problem purchases.
A retailer’s ability to provide effective solutions for returns is fundamental to building customer satisfaction and loyalty.
To help drive down return rates, retailers should make sure customers understand exactly what they are buying. Having clear, easy-to-understand and accurate product descriptions on your website can help make a big difference. For instance, a major retailer in the fashion goods industry recently told me that he cut his return rate in half by providing better product descriptions on his website.
By offering free returns, retailers can also encourage consumers to buy from their sites more often.
By incorporating some or all of these strategies to your shipping plans in 2015, retailers can not only help deliver a satisfying experience to their customers, they can position their business for growth and savings opportunities in 2015.
Christoph Stehmann is President, Ecommerce & Shipping Solutions, Pitney Bowes.
This represents a huge growth opportunity for US retailers to tap into in 2015. However, to be successful, retailers need to make sure they have the right shipping strategies and solutions in place to meet customer expectations and reduce the complexities associated with shipping.
As a matter of fact, recent research we conducted with 100 US merchants showed that when it comes to the weakest link in the fulfillment chain, almost half (47%) of retailers said that their company’s management of parcel shipping needs the most improvement.
This is even more important when you take into effect that 70% of Americans consider shipping options to be an important factor in the shopping experience compared to 66% in 2013, according to our recent research. Also, one-third (33% ) of consumers said they plan to pay more attention to shipping this year compared to last year, and half plan to shop online earlier this year.
So how can retailers sharpen their shipping strategies in 2015 to help meet customer expectations and position their businesses for success? Below are three opportunities.
1) Flexible delivery – A retailer’s ability to provide a variety of shipping options can make a difference in attracting new shoppers. After all, consumers like choices and evaluating options to meet their needs based on whether cost or delivery time is more important. Our research shows that when it comes to free shipping versus fast shipping, 82% of Americans find free shipping where the product arrives in five to seven days more attractive, while 17% prefer fast shipping where the product arrives in one to two business days for a fee.
Americans who find fast shipping more attractive than free shipping would be willing to pay $8.50 for the package to arrive within two business days. Relatively few (19%) would be willing to pay more than $10 for fast shipping.
Therefore, flexibility for adjusting parcel shipping by carrier and rates is invaluable. One way retailers can do this is by using a single, automated multi-carrier system that can offer a variety of carrier options including the USPS, which has become more competitive with the Intelligent Mail Package barcode. These powerful, yet scalable web-based solutions can enable retailers of all sizes to compare and select the most cost-effective shipment method that meets delivery requirements for every parcel shipment.
2) Expanding beyond the US – Cross-border ecommerce transactions drive a lot of complexity, but they are also a significant market opportunity for US retailers to grow their businesses.
Also, a recent global online research we conducted also showed that the US was the number one e-destination where international shoppers would purchase goods online from retailers outside their own country.
To tap into this opportunity, US retailers should consider what countries hold the greatest opportunity for their business. One way to do this is by looking at the purchasing power of consumers in each country and what products are the most likely to sell there. For instance, our study showed that 69% of consumers in China selected the US as the top country where they would buy online products from. Also, China has approximately 621 million Internet users. If you multiply these two numbers, you come out with a target of 428 million potential buyers in China. The most popular items that consumers in China are more likely to buy online from a retailer outside their own country are consumer electronics (53%), apparel (44%) and footwear including athletic shoes (38%).
Outside of China, India, Brazil and Japan are additional countries that US retailers might want to consider adding to their global ecommerce mix, depending on what you sell in your product catalogue.
However, adding new markets one-by-one can be a slow, resource-intensive process when relying solely on in-house capabilities. Also, countries take their import/export laws seriously, and if you don’t ship the right goods, to the right people, in the right ways, you could be subject to penalties or even denied entry to markets.
As a result, many US retailers who are ready to expand globally turn to third-party experts to simplify the complexities associated with global ecommerce, and provide the capabilities and the country-by-country know-how to satisfy both international buyers and local-market regulators.
With minimal set-ups, rapid integration and limited up-front investments, global ecommerce solutions providers can offer US retailers the support they need for rapid and successful entry into one or many new markets.
3) Effective returns – Returns have a long history of being a pain point for many customers and retailers. However, retailers can use returns as an opportunity to make a positive statement to customers regardless of the reason for the return. In addition, retailers must be proactive in providing the mechanism for clients to return problem purchases.
A retailer’s ability to provide effective solutions for returns is fundamental to building customer satisfaction and loyalty.
To help drive down return rates, retailers should make sure customers understand exactly what they are buying. Having clear, easy-to-understand and accurate product descriptions on your website can help make a big difference. For instance, a major retailer in the fashion goods industry recently told me that he cut his return rate in half by providing better product descriptions on his website.
By offering free returns, retailers can also encourage consumers to buy from their sites more often.
By incorporating some or all of these strategies to your shipping plans in 2015, retailers can not only help deliver a satisfying experience to their customers, they can position their business for growth and savings opportunities in 2015.
Christoph Stehmann is President, Ecommerce & Shipping Solutions, Pitney Bowes.
