Automating the Web of Shipping Options

According to a survey conducted by Shopper Approved among 25,660 customers, there’s essentially a 3-way tie in the key factor shoppers cited to explain why they buy online instead of locally. The winning reasons are larger selection (25.4%), better pricing (25%), and convenience (24.7%). But if you add the people driven by pricing and convenience together, it comes to 49.7% of all respondents.

That is significant because both price and convenience rely heavily on shipping. In fact, shipping costs lead to the quickest cart abandonment by customers. Everyone has had the experience of placing an online purchase only to get to the end of the checkout process and realize, “that’s how much it’s going to cost to ship this order? No, thank you!” All of the work done to attract customers, guide their shopping journeys, and convert them is completely negated if shipping charges are not aligned with expectations.

Similarly, shipping times can easily negate the convenience of online shipping when customers view them as too long. Customers expect their purchases to arrive within a reasonable amount of time and faster is almost always better. Price and convenience only get you so far if you can’t deliver in a reasonable amount of time.

These components of shipping — expediency and cost — have a direct impact on the most important factors driving customers online in the first place.

The problem faced by retailers is that shipping cost and speed is reliant upon a number of factors like distance, package weight and size. Further, there are multiple carriers to select from, so determining the fastest, cheapest way to ship an item is not a straightforward task. But there are features that you can look for in your ecommerce platform that simplify the process by doing much, or all, of the work for you.

Inexpensive shipping upgrade automation

It is often possible to ship items to customers within a certain radius of your point of origin using second day shipping for the same cost, or slightly more, than ground rates. These customers can enjoy expedited shipping for little or no extra spend, but only when purchasing from a site that knows how to seek and find these opportunities. The ability to offer expedited shipping taps into one of the primary desires of ecommerce shoppers and it provides competitive advantage over sites that lack this functionality.

Best store fulfillment

Logistical logic built into your ecommerce platform optimizes shipping time and cost by selecting the fulfillment center that can ship products fastest to customers. As more retailers utilize their brick and mortar locations as distribution centers, automatic sales order routing ensures that each customer purchase is fulfilled from the location that is both the fastest and least expensive. This can shave days off shipment times and there is no limit to how much it can save in shipping costs.

Support dimensional weight rate calculation

Major carriers are changing how rates are calculated on many packages with an increased focus on box dimensions in addition to weight. Set to go into effect at the beginning of 2015, retailers who don’t incorporate these changes run the risk of reporting inaccurate shipping rates to customers. These new dimensional weight shipping rates should also advise new practices that reduce packaged air and keep rates low for customers.

Know which carrier to use

For some zip codes, faster service is available from FedEx than UPS, but UPS offers better rates on expedited shipping to compensate for that. Balancing every offering from each carrier is like trying to juggle between Congress, the Supreme Court, and the president — they each do different things better. Keeping a relationship with all of them and building their pricing structures directly into your platform for easy comparison helps make sure that you have the necessary options to serve each customer best.

Shipping is really the glue that holds the entire ecommerce universe together. The number of customers willing to tolerate long transit times to save money or pay extra for shipping for the convenience of shopping at home are dwindling. Most customers want it all and they expect it now. Smart retailers must keep abreast of trends like omnichannel fulfillment, dimensional weight pricing, and shipping options to satisfy this demand. The proper software automates much of this and keeps them ahead of their competitors, both online and in brick and mortar.

Ian Goldman is President and CEO of Celerant Technology.