Smart Ecommerce Shipping Strategy

Warehouse-Distribution---Screenshot e-commerce shipping

Control and configurability are key components of a successful Ecommerce shipping strategy.

With a new year well underway it’s a good time to think about a smart Ecommerce shipping strategy.

When customers consider making an online purchase as opposed to buying from a brick-and-mortar store the ease and speed of the shipping process can be a deciding factor.

With rich online shopping options now readily available to consumers 24/7 from multiple devices, customer loyalty must be re-earned with every purchase. Even one negative delivery experience can make a previously loyal customer think twice about purchasing from a vendor again. So how can online retailers implement a smarter shipping process in 2015 to ensure ongoing customer satisfaction and loyalty?

Regardless of the number of shipping vendors with which a digital commerce platform integrates or how merchants ultimately structure shipping fees, control and configurability are the foundation of a smarter shipping strategy.

“Good configurability and control across multiple shipping environments is vital,” said Mike Bates, chief executive officer of HotWax Systems and a 20-year digital commerce software development veteran. “This allows online retailers to respond quickly and effectively to the rapidly evolving needs of both customers and of the marketplace. The recent changes at FedEx and UPS to dimensional-based shipping rates are a great example. Our platform users successfully made the transition without interruption, but I know others in older or less flexible systems are stuck or still trying to sort out the changes.”

For shipping functionality, flexibility and innovation are key–not only in terms of meeting elevated customer expectations, but also in terms of proactively leveraging shipping policy as a competitive advantage and exceeding customer expectations.

As shipping vendors face a complex, expanding environment, stay in the know about new developments

A rapidly expanding e-commerce marketplace is motivating shipping vendors to find new ways to meet the needs of customers. This is a complex process, and sometimes even the best plans result in unanticipated outcomes that are less than favorable.

UPS, for example, invested heavily in additional resources to meet delivery deadlines during the 2014 peak holiday season. The company’s delivery results met expectations, but after the peak season was over, implications of costs incurred caused concern.

In a January 23, 2015, press release from UPS, David Abney, UPS chief executive officer, stated “Clearly, our financial performance during the quarter was disappointing. UPS invested heavily to ensure we would provide excellent service during peak when deliveries more than double. Though customers enjoyed high quality service, it came at a cost to UPS.  Going forward, we will reduce operating costs and implement new pricing strategies during peak season.”

In the same press release, Kurt Kuehn, UPS chief financial officer stated “The rapid expansion of e-commerce has created a complex operating environment during peak season. UPS is in the early stages of a multi-year initiative to adapt our operations to these market challenges. We are making progress, but this quarter reflects that more work needs to be done.”

New partnerships lead to innovative solutions, but the process takes time

In an effort to keep pace with customer demands, innovative partnerships are emerging.  In November 2013, National Public Radio reported news about Amazon and the Postal Service partnering to provide Sunday delivery of packages.

“Now, as we reported earlier, there’s word that Amazon.com has struck a deal with the Postal Service for Sunday delivery of packages. The service begins immediately in the Los Angeles and New York City metropolitan areas and is planned to expand next year to other metros, including Dallas, Houston, New Orleans and Phoenix.”

Evaluate your digital commerce platform for speed and ease of delivery

While shipping vendors continue their quest to meet the needs of a rapidly evolving e-commerce marketplace, online retailers need a solid shipping strategy that works well within current market conditions. As shipping vendors work out new solutions, there will likely be many successes, many failures, and many lessons learned, leading to numerous innovative partnerships and services.

In the meantime, shipping capabilities remain an important part of  the overall platform selection process. One of the best ways to ensure that customers receive purchases easily and on time is to periodically evaluate digital commerce platform shipping functions for ease of control and configurability. Contact us today for a free evaluation.

DATE: Jan 27, 2015
AUTHOR: Teresa Zundel
Enterprise ERP, OFBiz

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