The twists and turns on the consumer’s road from purchase to parcel can influence e-commerce retailers’ bottom lines in a direct relationship to customer experience (CX), and last-mile delivery is a huge component. In one survey of shoppers, 76% of respondents said that an unacceptable delivery experience would strongly or somewhat affect their decision to order from that brand again, which makes shipper and carrier satisfaction a sizable component of overall CX.
With the risks and rewards top of mind, e-commerce brands are challenged to evaluate the myriad of obstacles in front of them and narrow in on a few key areas to shore up a parcel shipping strategy that’s prepared to tackle anything that comes their way in 2023 and beyond. As e-commerce brand decision makers look to allocate and maximize shipping budgets and resources, parcel professionals should advise their clients to focus on three elements essential to shaping a successful delivery experience: Efficiency, effectiveness, and consistency.
Efficiency in shipping and delivery can be interpreted in multiple ways, including things like access, packaging optimization, and reducing “touches” from pickup to drop-off. In almost every case, working with the proper carrier partner will ensure these and others can be realized by shippers.
In terms of experience and network size, the U.S. Postal Service is the industry leader for last-mile delivery, and carriers who partner with the USPS make for optimal efficiency advocates on behalf of shippers. Considering access, USPS reaches every home and business in the US – approximately 160 million physical mail and PO boxes – as frequently as seven days a week, whether “dense urban” or “sparse rural.”
Let’s look at that last part, where an extra stop on a delivery route can add miles, not blocks. One major carrier announced an additional $13.25 surcharge *per package* for shipments to several designated rural ZIP codes, affecting some three million destinations. In total, 24,000 of the country’s 42,000 ZIP Codes represent rural areas, so it’s critical to deliver to these customers efficiently.
Further, if an e-commerce brand ships hundreds of packages every day, it’s essential that its last-mile partner has the bandwidth to keep up with this kind of volume. Not every carrier does, but this is an area where USPS excels. No matter how quickly a brand’s business scales, there’d be no need to worry: Carriers working with USPS can help ship faster, more efficiently, and at a lower total cost.
The cost of shipping for e-commerce brands – especially small businesses – can have a significant impact on conversion rates and overall profitability. It’s often the top reason for cart abandonment and can impact customer loyalty and repeat business. As such, minimizing such costs needs to be a large area of focus for e-commerce brands.
One of the things any size shipper should do is evaluate their packaging when considering ways to cut costs. Recent changes in the retail shipping model now include dimensional weight as part of the pricing equation. With both the weight and size of the packaging included, it’s important for parcel professionals to work with their clients to review packaging and determine the best options for products being shipped.
For brands with a solid understanding of their business – facets including variance in package size, available delivery options and speeds, etc. – considering carrier diversification is a cost-conscious decision that can stave off various surcharges. Rate increases aren’t equal across the board, and further, carriers have different dimensional (DIM) weight divisors, which can increase charges on large or heavy packages. Having multiple carriers to offer various shipping options improves the overall customer experience, improves conversions, and manages overall expectations consumers have.
One more cost reducing method is a multiple distribution center strategy. Regionalizing product volume can have a significant impact on shipping by reducing zone costs and delivery times. Though this option is dependent on business size and product volume, there are more opportunities with warehouses and distribution centers popping up across the country. Carrier partners with multiple strategic locations in their network will be able to move parcels more efficiently, more quickly, and at a lower cost.
Consistently Carrying CX
In the brand battle for consumer hearts and minds, great CX can come down to the smallest considerations. Considering the wealth of data being collected and stored – and often not used to its full potential – throughout the customer journey, every e-commerce brand should be looking at data collection, storage, sortation, and analysis as an area to provide consistent, dependable CX. By analyzing the shipping data available, e-commerce enterprises can get a true big-picture view of their operations. Leveraging real-time data analytics can provide the information and insights needed to plan ahead for demand, as well as to optimize routes, reduce costs, respond to changes in real time, and increase efficiencies.
Tying It All Together
Apparel, books and printed matter, pharma and nutraceuticals… customers are always eager to receive their packages, and their expectations for seamless receipt are high. Morgan Stanley predicts US e--commerce could reach 31% of all sales by 2026, so the growth trajectory is mapped. Now more than ever, it’s imperative for brands to maintain any and all competitive edge in the face of immense industry disruption. “Getting it right” relative to shipping is a massive – and crucial – step in the process.
Gaston Curk is CEO of OSM Worldwide.
This article originally appeared in the March/April, 2023 issue of PARCEL.