The U.S. domestic ecommerce marketplace is dominated by Amazon and large retailers all setting the tone and pace of customer shipping expectations by offering expedited delivery options at low or no cost to the customer. Retailers of all sizes are finding themselves needing to compete to meet customer expectations, creating challenges for smaller retailers in matching the delivery speed and price options provided by the larger retailers, while managing their own costs.
“Competing for customer loyalty has taken on a critical new dimension for small and medium-sized businesses,” says Michael Griffiths, Vice President of Global Marketing and Communications for Retail and Ecommerce at Pitney Bowes. “Next-day and even same-day free shipping are becoming the norm in retail”.
“It’s important to remember, however, that companies like Amazon that play a significant role in setting these expectations are first and foremost technology companies,” Griffiths adds. “They have a flexibility in making these offers that many other retailers don’t. This makes the choice of partner and solution for shipping that much more critical to help retailers compete effectively in this new reality.”
Develop a shipping strategy based on carriers, automation, and partners
With the “Amazonification” of customer shipping expectations, ecommerce merchants of all sizes face serious impacts—potentially including lost future business—if those expectations are not continuously met. Meeting the expectations requires shipping to be treated as a strategic investment.
Merchants can incorporate a range of solutions into their shipping optimization strategy to help meet customer demands, but the cornerstone should be a multi-carrier option that incorporates the USPS®, as well as FedEx® and UPS®. An effective strategy designed to meet the challenges includes automation, the mix of carriers including the USPS, and the added benefits of working with a trusted shipping partner. Retailers that successfully weave these elements together are better able to meet their customers’ expectations and lower costs, allowing them to remain competitive in the age of Amazon.
Automation, multi-carriers and trusted partners are keys to a successful strategy
The Colography Group study identifies several key components of a shipping strategy that address the challenges facing small and mid-size companies—and why—including, but not limited to:
· Create a multi-carrier strategy: Review your carriers and pricing. Discuss your options with other services in your area. Will you offer next-day or same-day shipping? Is the USPS part of your existing shipping mix?
· Automate the process: Think about where automation can help your business and support a multi-carrier strategy. Automate your processes as much as you can from click to delivery.
· Identify shipping partners: Look for partners that can provide service guarantees, APIs that are easy to work with, and favorable pricing and payment terms, all of which should lead to deeper savings for you.
To learn more about the challenges and solutions that lead to an effective shipping strategy and greater customer satisfaction, read “Shipping as Strategy: How small and mid-size retailers can best meet customers’ delivery expectations in the age of Amazon.”