The Ecommerce giants like- Amazon, Flipkart, Walmart, and others have made the mark in the industry. Do you know what led them to this position?
The wide range of products? – NO
Unique marketing promotions? – NO
Dumping billions into convenience? – YES
What’s the cornerstone of convenience that customers expect? It’s faster shipping that increasingly customers are demanding to meet the need of instant gratification. Ultimately, the Ecommerce stores are left with no choice and have to meet the minimal expectation of the customers. That’s the reason- Amazon Prime members when asked the reason for choosing Prime membership, 70% of them cited fast and free delivery as the topmost reason for choosing Prime membership.
The customers now want faster shipping but don’t want to pay extra for the same.
- 48% of consumers are demanding next-day delivery, and 23% are demanding same-day delivery.
- 61% of the customers prefer to cancel the purchase if free delivery is unavailable.
It signals the stores can work on making the experiences better but not on the shipping cost. In such a situation, the Ecommerce stores can neither charge for product delivery nor invest heavily into product shipping. The situation is worst for the Ecommerce stores that are operating with the on-demand mentality and required to reduce last-mile delivery cost while working with Last Mile Delivery Management Software.
It begs the question- how can Ecommerce stores manage the customer expectations and diminish shipping costs without hurting the profits? That’s where employing smart shipping strategies could help.
Let’s shed some light on how a couple of methods can help in reducing the shipping cost of the Ecommerce store while meeting customers’ demands and maintaining the bottom line:
- Improve shipping efficiency with real-time data
When the shipment is loaded in the truck partially, the businesses need to make the payment. The increased number of trips between the warehouse and drop-off points increases the delivery cost. The distant drop-off points followed by traffic congestions and delays have made the deliveries inefficient. The increased number of deliveries has made shipping- more complex and inefficient. Resolving the inefficiency with real-time would lead to reduced cost. See how?
Source : Pulse News Korea
Batch shipping is a good practice to load the truck with all the shipments that need to deliver to the same destination and then sending them in batches increases the shipping efficiency. However, the long waits for customers- the problem it creates is resolved by providing an extra discount to the customers for making the purchase. It fits when the Ecommerce store needs to ship big orders with predictable destination and order volume.
Freight consolidation is another practice that goes well with the store that needs to ship small items and timely delivery is of prime importance. Here, just like the Uber pooling concept, the businesses that can’t fill the truck to maximum capacity, can share the space and split shipping costs accordingly. It helps in minimizing shipping costs, damage risks, and carbon footprint as well.
- Provide more delivery options
The same-day or two-day shipping options are even resulting in failed delivery because the customers are unaware of the time at which the shipping will be done. When the customer fails to show up on time, it results in failed or delayed deliveries that ultimately increase the trips to the customers’ drop-off points and so is the shipping cost.
The best way to get out of it is- providing the time slot option for the shipment delivery so that customers can choose the delivery window at which they will be available to collect the order. Conclusively, fast deliveries are accomplished at a reduced cost alongside improved user experience.
- Auto-dispatch delivery tasks
With the range of shipping services available out there, it’s difficult to choose as every service has their strength and weakness. It’s better to perform a thorough analysis of their prices and the technology they leverage to complete the deliveries.
In the modern universe, technology plays a key role in making the shipment delivered at speed because the shipping service provider can auto-assign the deliveries to the available drivers depending on the drop-off points so that maximum deliveries are completed at the right time and the right place.
With mobile app development, the store owners will have the real-time look at how many deliveries are assigned to the drivers and they can limit the deliveries as well. Moreover, the software will automatically display ETAs, check driver location, plan routes, and then assign deliveries. The efficiency reduces the shipment cost by a great margin.
- Packaging should be done intelligently
Packaging is an integral part of the shipping cost that affects the shipping cost like- material type, design, quantity, and quality. When the stores select the packaging type based on shipment, the cost is reduced.
For bulk order placement, the packaging should be done intelligently so that packaging cost is reduced. For instance, for 1000 orders packaging, just 100 packaging materials will work.
Depending on the product type, the packing material is selected like- bubble wrap, cardboard, newspaper, or a bag. For heavy product packing, lightweight material is suggested to reduce shipping costs.
When you are opting for shipping services like- UPS, FedEx, DHL, or US postal services, then there is no need to worry about packaging costs because they provide free shipping mailers.
- Delivery route optimization must be done regularly
We all know- longer the distance is, the more shipping costs it will incur. The route that includes multiple stops, traffic, or poor road problem, it increases the time and fuel consumption, thus the shipping cost.
When you optimize the route for minimum stops, reduced traffic congestion, and optimal road conditions, the driver can complete the delivery in minimal time. When the new deliveries come, the drivers’ route is re-designed with a changed delivery route and the driver is notified in real-time for a quick detour. The additional delivery information is also provided through in-app chat on delivery app solution.
Source : Ecwid
- Incorporate free shipping tactically
Every Ecommerce store owner is not an heir to an oil empire who can accommodate shipping fees completely. It indicates the free shipping needs to handle smartly that can impress the users with free shipping and don’t hurt the profits at the same time. Here are the ways:
- You can transfer the shipping cost to the customers and make the shipping available for free by strategically including the shipping fees into the product cost.
- Make the product shipping free in special cases such as on first-time purchase, during the holiday season, and for subscribers.
- Create a combo and sell them together along with the shipping fee covered. This practice lets you make shipping free without creating an extra burden on you.
- Diminish customer returns
The free returns encourage the customers to purchase from the store, but it’s not healthy for the Ecommerce store. Even, if the customers want to exchange the product, the free exchange cost associated with returns is adjusted by the Ecommerce store. The situation is beyond ones’ control but managed strategically. See how?
At first, the chances of returns are reduced by displaying the information about products’ material, size, photos, videos, and scale. When the return policy tenure is increased from a week to three months, the users get more time to spend with the product, and that in turn, reduces the chances of product returns. Prompt customer support is also a great way to decrease customer anxiety and the convincing answers may persuade the users to keep the product with them.
Let’s accept it: whether you love it or hate it- the customers willingly deal with the Ecommerce stores that offer free shipping and free returns. If you won’t follow the trend, you will be pushed out of the market. Alas! The stores are investing heavily into product shipping to stay ahead of the pack. It’s upsetting.
There are ways that if strategically bake into shipping methods, the stores can get the shipping cost reduced. The practical steps- route optimization, smart packaging, delivery tasks auto-dispatch, improved delivery options, and enhanced shipping efficiency enable Ecommerce stores to make decisions intelligently.