Shipping matters. A lot.
Across the world, the high cost of shipping is one of the top reasons for cart abandonment. In a recent global study by UPS, three of the top four reasons for leaving a site without clicking “pay” had to do with shipping. (The only reason that didn’t was “not ready to purchase.”) “Shipping costs made the total purchase cost more than expected” was the top reason for leaving a shopping cart in the U.S., Europe, and Brazil, according to more than 57% of those surveyed. (See chart.)
And the number one reason for repeat purchases? Lowest shipping costs or free shipping, says a study by Forrester Research.
In the Forrester study, 57% or more of online consumers surveyed in France (59%), Germany (57%), and the UK (57%) listed “lowest cost or free shipping” as the main reason to buy again from a retailer. The study also concluded that customer satisfaction in shipping and delivery—including satisfaction with speed, cost, number of options, and convenience—has a direct impact on sales revenue, repeat purchases, order size, and customer lifetime value.
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So let me say it again: shipping matters big time to online consumers. And it matters even more to cross-border customers, because, most likely, shipping cost is a higher percentage of product cost for them than for domestic shoppers.
No surprises – DDP and fully landed cost visibility enhances the customer experience
As the Forrester study points out, the key metric is customer satisfaction. The first step to satisfying your international customer is to eliminate nasty surprises. Shipping your goods delivery duty unpaid (DDU), in which cross-border shoppers pay duties and taxes after ordering but before the shipment can be delivered, gives you less control over their shopping experience. Not only do your consumers have an extra step in their purchase process, they could easily face unpredictable costs and delays that are out of your control.
Cross-border shoppers want to see the fully landed cost of their order—including any shipping and handling, customs duties and taxes, or other fees—as soon as possible in the product selection process, and definitely before they click “pay” at checkout. So shipping delivery duty paid (DDP) is key. DDP terms allow retailers to control the customer experience and give customers upfront transparency as to what they will ultimately be charged.
Best in class shipping practices to keep in mind
Enhance your cross border shipping with the following practices or consider working with a carrier management company to do it for you:
- Offer multiple shipping options, with variations on speed and cost.
- Work with local or regional carriers to enhance speed and reduce cost into key markets. While UPS, FedEx, and DHL offer global services, they tend to be more expensive and are not the only, or best, option in every country.
- Then leverage those local, market-leading carriers to do international zone skipping and direct injection into country or region to further reduce your door to door cost.
- Provide a branded tracking portal for your online shoppers that can trigger proactive email or SMS updates to let consumers know the status of parcels and ETA.
- Utilize carriers that can provide a Cash-on-delivery (COD) payment option (a preferred method in many large markets).
- Make returns easy and inexpensive by offering regional return centers and a fully branded online returns portal to your international shoppers. For one of the retailers we work with, using regional return centers and an online returns portal has helped cut both time to issue a refund and shipping cost in half.
- Push carriers to perform duty drawbacks in countries that allow it so you can recoup those fees for your cross-border shoppers’ returns.
Unfortunately for retailers, customer expectations with respect to shipping and delivery will only continue to increase around the globe. The ability to provide shipping that satisfies increasingly demanding consumers is already a barrier to entry for many retailers trying to enter new international markets.
For those that can provide superior customer experiences in this area, however, shipping and delivery can be a key differentiator. So look for logistics solutions and providers that can provide the level of service that enables you to satisfy customers, or leverage a partner who specializes in carrier management solutions.
How you ship definitely matters.
Ahmed Naiem is the chief commercial officer at eShopWorld