Will fewer shipping options hurt retailers over the holidays?

Discussion
Nov 24, 2015

Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.

As many as 68 percent of retailers say they are not well prepared to provide multiple shipping options that will meet customer expectations this holiday season, according to a survey from Temando, the Australian shipping and fulfillment software platform provider.

On the whole, smaller retailers reported being less prepared to provide multiple shipping options (same day, express, standard, collect from store, etc.) than their larger counterparts. Only 24 percent of micro-level retailers (those shipping fewer than 20 deliveries per week) are prepared to meet these expectations, while 29 percent of small retailers (shipping 21 to 100 deliveries per week) are prepared for the season. Mid-sized (36 percent) and larger enterprise (50 percent) retailers are better prepared, likely due to the greater number and variety of consumers they ship to, which makes multiple shipping options a business requirement.

Temando and Research Now surveyed more than 200 retailers in the U.S. across a wide range of categories as part of the study.

These retailers also are ill equipped to handle shipping delays throughout the season, with only 24 percent overall reporting that they are well prepared to handle them and 38 percent indicating they are somewhat prepared. Around returns, 29 percent are well prepared to handle them this holiday season and 34 percent somewhat prepared. Larger and mid-size retailers are more confident in their ability to handle unexpected delays and returns, although the difference wasn’t as much as handing multiple shipping options.

Shipping options chart

Source: Temando





Top Omnichannel Problems - AND HOW TO SOLVE THEM




There are numerous shipping difficulties retailers of all sizes experience as they go into the holidays. High courier rates — cited by 28 percent of retailers — remain the largest barrier to achieving shipping goals, with meeting customer expectations (27 percent) coming in a close second. Customer expectations consist of various factors, including overall quality of service, availability of shipping options, shipping costs, returns, tracking and notifications (via email and SMS).

Retailers listed a lack of total automation (19 percent) as their third-biggest shipping difficulty during the holidays. A majority of retailers responded that their systems were either manual or only somewhat automated, including:

  • Warehouse management (64 percent);
  • Booking a courier (61 percent);
  • Customer product returns (72 percent); and
  • Delivery tracking/customer communication (58 percent).

 

Has being able to handle multiple shipping options become an expectation by consumers or is it still a perk? How about expectations for managing returns and responding to any unexpected delays? Where should retailers devote most of their attention for making improvements?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"My definition of competition is, "anyone selling anything to anyone you might one day want to do business with." So the shipping option bar has been set high by many, many companies and what was once thought of as a "perk" is now just table stakes and a necessary cost of doing business."

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8 Comments on "Will fewer shipping options hurt retailers over the holidays?"


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Max Goldberg
Guest
6 years 5 months ago

Consumers expect multiple shipping options when shopping. If they have a pressing need and don’t find those options, they will shop elsewhere. The same is true for returns. Retailers need to understand that shipping and returns in many instances are as important as having an item in-stock, and need to devote resources to meeting these expectations.

Ian Percy
Guest
6 years 5 months ago
All perks eventually become a presumption. Shipping and price are the two self-inflicted wounds that will become fatal for a lot of the retail world. Neither one is a “perk,” a pleasant and thoughtful bonus from a retailer. Retail has made both a presumption so now we have to deal with it. What puzzles me is how people cannot be ready. I’ve known the holiday season was coming for quite a while and I’m not all that smart. As I recall there was a holiday season last year too. It’s one thing for shoppers to wait until the last minute to get ready, quite another thing for stores to do so. Instead of thinking you have no choice but to compete with the shipping budgets and capabilities of the Big Boys, you can always state the best options you can provide shoppers … and stick with them. IMHO, if a shopper insists they just have to have that new sweater an hour after buying it, then they should get their fat *** down to the… Read more »
Ryan Mathews
Guest
6 years 5 months ago

My definition of competition is, “anyone selling anything to anyone you might one day want to do business with.” So the shipping option bar has been set high by many, many companies and what some retailers may have once thought of as a “perk” is now just table stakes and a necessary cost of doing business.

Limit the shipping options and you are, de facto, limiting your ability to sell. Ditto for returns and ditto for communicating delays. As to what to address first, it is really an iterative problem. If you can’t deliver the way the customer wants and in the time frame the customer wants you are limiting the likelihood of a sale and increasing the possibility of a return. If you don’t manage returns efficiently, you are limiting the possibility of repeat business.

As for delays, they assume an order has been placed and — while they are inevitable — don’t expect customers to be too understanding.

Kenneth Leung
Guest
6 years 5 months ago

Definitely an expectation unless it is for artisanal items where you can justify limited options when it is something specific to the retailer or manufacturer. For retailers selling general items, amazon.com and large retailers have set a high bar on returns, customer communications and shipping options. It is either be ready or watch the customer go elsewhere.

Lee Kent
Guest
6 years 5 months ago

If a consumer is ready to buy but does not make the purchase for any reason other than price, that is an out-of-stock, my friends. That means shipping options, ability to take returns, etc. Any retailer who does not get that yet is way behind the curve.

Just sayin’ for my 2 cents.

Mark Burr
Guest
6 years 5 months ago

A perk is only a perk when it is extraordinary. Multiple options? Top retailers? They go hand in hand. So, multiple options? Not so much a perk anymore.

Unfortunately, for retailers looking to enter the fray of multiple options, it’s not as much an either or proposition as the question might suggest. A retailer can’t simply enter the market this late and expect to not have their processes of managing returns and responding to delays not in order.

For retailers entering this late, it is a real challenge and one best not to enter unless all the bases are covered, fully prepared, and tested in a portion of their market before a complete launch.

In this case, better late than never isn’t really better.

Ralph Jacobson
Guest
6 years 5 months ago

As long as retailers continue to offer free shipping and simple returns, shoppers will continue to seek retailers offering them. The more personalized, via multiple shipping options and other retailer services (returns, etc.) the shopping experience can be, the better chance the retailer has to capture the shoppers’ loyalty.

Because of this competitive promotional activity, I think the shoppers’ expectations remain high for now for these services. Retailers need to investigate all channels of shopper data to determine where their particular market is on these services in a near real-time manner. Social sentiment, customer surveys, etc., are great sources of how shoppers feel about your business, of course. I also believe that there is not a one-size-fits-all way to attack this because shoppers feel differently about different retail categories.

Arie Shpanya
Guest
6 years 5 months ago

This day in age, consumers are expecting an easy, seamless online experience. This includes but is not limited to multiple shipping options, simple returns, and a strong ability to communicate when an unexpected delay occurs. These are a couple of reasons many shoppers are hesitant to conduct a lot of holiday shopping online, and it’s up to retailers to keep their worries at bay.

Offering multiple shipping options is no longer a point of differentiation, but rather, a point of parity. Retailers who do not adopt multiple shipping options, especially during the holidays, may lose sales to those who do. Retailers should devote their attention to establishing a hard cut-off date for guaranteed arrival to avoid leading customers on, and should always keep their shoppers in the know when it comes to delays. A liberal return policy couldn’t hurt either, as many consumers who shop online are not entirely sure if the gift recipient will like it.

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Braintrust
"My definition of competition is, "anyone selling anything to anyone you might one day want to do business with." So the shipping option bar has been set high by many, many companies and what was once thought of as a "perk" is now just table stakes and a necessary cost of doing business."

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