For e-commerce and direct-to-consumer (DTC) shippers, getting through peak holiday season and starting a new calendar year marks the passing of equal parts profit driver and stress test. GlobalData measured a 7% increase in consumer spending from Thanksgiving to New Year’s, a trend that brands and their partners hope to see strengthen in 2023 and beyond. And with Onfleet projecting 78% growth in last-mile deliveries through 2030, there seems ample reason for optimism in the space.
All business leaders know increased profits and revenues come from two main areas of opportunity: Higher sales volumes and decreased operating expenses. With 2023 underway, e-commerce companies must reevaluate their operations to prepare for uncertainties and set themselves up for long-term success. We now operate in an omnichannel world with more shipping and delivery options than ever before, so as companies hone in on shipping solutions as a differentiator to both the customer experience and the bottom line, here are several trend areas that online sellers should keep top of mind.
Watch Consumer Trends Closely
Everyone is a consumer of something, and in today’s society, the “Amazon effect” – nearly anything you could want, for the lowest price, delivered overnight – is driving the need for immediacy, social relevancy, and personalization. Customer satisfaction is the most important measure of overall customer experience (CX) for eComm and DTC brands.
The future of e-commerce belongs to those brands capturing attention and generating repeat business through personalized experiences. Marketing trends in ad targeting allow for more precise customer reach in the awareness and attraction phase, after which compelling content takes precedence. Though purchase is the ultimate goal, it’s only the beginning of the CX cycle for DTC brands, because the real shot at customer satisfaction starts when the shipping confirmation email is sent.
Finding ways to personalize your shipping efforts can lead to less churn and more repeat sales. Consider more personalization strategies linked to the delivery process, including order and shipping notifications, tracking updates, and post-purchase solicitations for “how did we do” delivery feedback (with an added completion incentive toward the next order). Also apply what you know about the communication preferences of your primary audience in relation to how you share delivery timelines, as many shoppers today prefer to know a parcel’s estimated arrival as a range of specific dates (e.g. “expected Feb. 7-9”) than a bubbled range of “5-7 business days.”
Turns Operations into Opportunities
The business operations department is a prime area for finding opportunities to affect your last-mile logistics. Especially if your shipments go to a variety of final destinations, from dense urban to sparse rural, consider diversifying carriers to give end user customers more options in cost, reliability, and timing. If you consider something like access, USPS reaches every home and business in the U.S. – approximately 160 million physical mail and P.O. boxes – as frequently as seven days a week. Recently, one major carrier announced an additional $13.25 surcharge *per package* for shipments to several designated rural ZIP codes, affecting some 3 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.
Even in the age of Amazon swiftness, knowing the preference of your customers can also make a significant ops impact. A recent “state of shipping” report conducted by the Santa Clara University’s Retail Management Institute found that 32% of respondents choose the free or cheapest available shipping option even if the delivery could take more than five days to arrive, bringing words like “reliable,” “predictable,” and “trustworthy” to the forefront for cost-savvy consumers. Operationally seeking partners with optimized networks and nontraditional options can add credence and subtract cost.
Leverage Big Data
For everything we’ve already covered on personalization and operations, nothing can be accomplished without the almighty data. Capturing millions of points of data *per day* is standard operating procedure, but how you access and utilize it can separate substandard from success. Businesses can leverage real-time visibility into their delivery operations to monitor key performance indices, proactively taking action when needed to make informed decisions. Consider implementing tools such as shipping APIs, which help avoid errors and complications by managing the customer’s order from the moment it’s placed to when the package is delivered. Businesses can use APIs to insert shipping and delivery directly into their business model and fully automate the checkout process, saving time while providing a better customer experience. This can provide better data, leading to KPIs for future decision making and customer personalization.
Leveraging data leads to several improvements in the shipping process, from improved procurement process to reduced dwell time and increased collaboration between shippers and carriers. Ultimately, shippers and carriers connecting through a unified platform can share data to drive crucial conversations, set realistic expectations and hold each other accountable.
More consumers today say their purchase decisions are influenced by sustainable shipping than ever before, with a focus on supporting companies actively implementing programs to improve the environment. With corporate reputation and customer experience so closely linked today, seeking sustainable shipping – materials, processes, partners – can lower long-term costs with safer-for-the-environment options.
Things like order consolidation when multiple products are going to the same address seem like a no-brainer, and yet several shippers shun the practice in favor of being first or fastest - as we mentioned above. And while we may all acknowledge that “one size does not fit all,”walk the floor of a shipping facility to see countless opportunities to right-size shipments to save on everything from raw materials to total costs. Choosing a carrier who already has the infrastructure in place to deliver at the lowest possible cost with minimal impact on the environment is a surefire success metric in the sustainable shipping arena.
Control the Return Conversation
From author to audience, many of us are guilty of the following e-commerce folly: Buy it in multiple sizes and colors, keep what works and send back the unwanted items. Not native only to the holiday shopping season, the return conversation is a conundrum costing millions for many brands who aren’t in control of their reverse logistics.
Save for issuing a “no refunds, returns, or exchanges” policy – which is all-too detrimental to any brand’s reputation – it’s difficult to take total control of this conversation. Brands who have assigned an executive seat to measuring customer experience are best equipped to keep accurate record of the customer journey and lifecycle, tracking the cost of returns against bottom line profitability and implementing mitigation strategies. One of the best places to start is actually in the pre-sales process, with improved page content (item descriptions, imagery) and tech that simulates an in-store experience as closely as possible, referred to today as “phygital” (physical plus digital). The closer a buyer can come to knowing exactly what they’re buying in the e-commerce space contributes to the reduction of reverse logistics.