In the first installment of our series on the 2016 Excellence in Customer Experience Awards, we took a look at what it takes to win the “Best Packaging” award, but even the most extraordinarily branded box will not impress a customer if their order is expensive to ship and/or arrives too late.
We turn now to the criteria that the SmartHub Benchmarking teams uses to evaluate the finalists for the Best Shipping and Delivery Experience award. Winners in this category, as well as the other “Excellence in Customer Experience” award winners, will be announced during Multichannel Merchant’s Operations Summit on April 14th, 2016 at the Duke Energy Center in Cincinnati.
Even before a package leaves a distribution center, retailers have made one of the most important decisions in the entire shipping processes: How much will a customer pay for the delivery of their order?
Survey after survey has shown that online shoppers are very aware of shipping cost and rank free shipping as one of the most vital services a site can offer. The importance of this issue is central to two of the first numbers used to calculate retailers’ shipping and delivery scores: free shipping price point and shipping charges.
While 65% of retailers in our study post a free shipping policy on their site, only 15% commit to free shipping on all orders. Most retailers restrict free shipping by requiring customer to meet a minimum order amount, which can fluctuate based on shipping promotions offered throughout the year. Cyber Monday has the highest occurrence of these promotions, with 76% of sites offering some sort of free shipping. while April typically has the lowest rate of free shipping offers.
In order for retailers to earn high marks in the free shipping category, they must consistently offer free shipping on all orders or for a reasonable minimum order amount. Retailers that do not provide free shipping or insist on a high threshold amount that is not in line with their product mix do not fare well in our scoring.
While free shipping is clearly favored by consumers, it is also important to examine how much delivery can cost without that benefit. Part of the SmartHub ordering methodology requires that customers select the standard shipping option in all major studies. Based on this data, we see that when free shipping is not offered, 9% of retailers charged less than $5 for delivery while 44% had a shipping cost between $5-$10. When we compare these numbers to sites that do offer free shipping with a minimum, we see that 14% charged less than $5 for shipping when that minimum was not met while 75% invoiced SmartHub for a delivery cost between $5-$10.
Retailers earn top marks in this category for keeping their shipping charges reasonable and in line with their categories. Some categories, such as housewares and home improvement, legitimately charge more to ship larger items and such special cases are weighted in our scoring. However, apparel and other soft good retailers can earn a penalty for charging an exorbitant amount to ship a single box or poly bag.
Once a shopper has clicked the “buy” button, our next category comes into play as the clock starts ticking at the ecommerce distribution center. With all of the same day shipping and/or delivery hype from the media, the time it takes for a package to hit the carrier network has become vital to the whole delivery process. This time span is what SmartHub refers to as “days to ship.” Over half of SmartHub retailers send out their packages within 24 hours while the bottom 10% take as many as seven days to process an in-stock order.
“Days in transit” is another metric we use to appraise finalists for the “Best Shipping & Delivery Experience” award. This score reflects the transportation strategy retailers have chosen and what tradeoffs they have deemed important. Almost all of the retailers we surveyed were divided between ground and consolidated delivery. Three-quarters of ground delivery orders were received within three days while 78% of packages sent through a consolidation service arrived within five days. Deliveries that took longer than the established norms for either service suffered a reduction of points in this category.
Stay tuned for Multichannel Merchant’s upcoming announcement highlighting the finalists for this year’s awards, and check back soon for the next installment which will focus on the “Excellence in Brand Communication” award.
Liz Harrington is a research analyst with eBay Enterprise + Innotrac