When customers place an order, they expect to get exactly what they ordered and receive it on time. This is specially true now during COVID-19 when consumers are relying on online shopping for even their most basic necessities (like toilet paper). When they fail to receive their correct order in a timely fashion, it makes for unhappy customers.
On top of COVID-19, ecommerce sellers need to simultaneously prepare for the upcoming holiday season. And if the pandemic has shown retailers anything, it’s that consumers are getting more and more comfortable with online shopping. In May 2020, online sales spiked nearly 93%. That trend is likely to stay high through the holiday shopping season and beyond.
As retailers prepare for another onslaught of online shopping for this year’s holiday season, let’s take a look at five guaranteed methods that can ensure your deliveries arrive on time along with our friends at ShipStation.
Why Is It Important to Deliver on Time Before the Holidays?
At holiday time, many of your customers will be buying products in anticipation of the holidays or to give as gifts. If you fail them now, there may be long-term consequences.
Here are a few statistics that may help drive that point home:
- 90% of customers report that customer service is one of the deciding factors whether or not to do business with a company.
- Nearly half (49%) of customers switched companies when they received poor customer service. It’s the number one reason they switch – more important than price.
- When there’s a problem with an order, it can take a long time to regain a customer’s confidence. It takes 12 positive experiences to make up for that one bad one.
- Unhappy customers aren’t quiet about their concerns. Frustrated consumers typically share their negative experience with 15 people. This can hurt your reputation and influence other customers.
If failing to deliver on time doesn’t drive customers away, it certainly won’t endanger customer loyalty. Loyal customers tend to buy more often and they spend more than first-time customers. The cost of acquisition for loyal customers is also dramatically lower.
How to Guarantee Delivery on Time Before the Holidays
You may be asking how you can guarantee delivery on time for the holiday season. While some items on this list may seem obvious, they play a critical piece in the overall delivery puzzle. Let’s take a look at the top 5 ways to guarantee delivery on time before the holidays:
- Create Accurate Inventory
- Set up Efficient Warehouse Operations
- Anticipate Delays and Additional Surcharges
- Combat Additional Fees and Surcharges
- Offer Express Shipping Options
1. Create Accurate Inventory
The most important thing you can do to create happy customers is to make sure you have the products in stock when they want to buy. It sounds simple, but out-of-stocks (OOS) cost retailers an estimated $1 trillion every year.
To avoid this situation, many retailers overcompensate against stock-outs by over-ordering, maintaining larger inventory or safety stock, and spending extra money on expedited shipping from suppliers. This ties up cash that could be better put to use in other areas of the business.
The root cause of OOS spans all functional areas from operations, supply chain, planning, and forecasting. If you want to maintain accurate inventory to guarantee you can deliver on time before the holidays, start with a robust Inventory Management System (IMS), such as SkuVault.
SkuVault provides an end-to-end solution for your ecommerce business to improve accurate inventory across every sales channel, and provide enhanced reporting for better forecasting.
2. Set up Efficient Warehouse Operations
In some warehouses, 20-30% of inventory can be considered deadstock or obsolete. That doesn’t include stock that’s lost or misplaced. Efficient warehouse operations can cut down the amount of dead stock, lost, or misplaced stock.
A well-run warehouse can go a long way to guarantee on-time delivery for the holidays.
Using an intuitive inventory and warehouse management system provides cost-effective order-routing and inventory location. Bar code scanning to add and receive inventory directly from POs can simplify intake. Utilizing paperless picklists, such as Wave Picking, can reduce human errors and increase speed in order fulfillment.
Although an IMS is typically the last piece in a merchant’s tech stack, it’s a critical component to ensure products make it to delivery intact and in the right quantity. It saves time, money, and helps customers get what they want in a timely manner.
3. Anticipate Delays and Additional Surcharges
Ecommerce has outpaced its growth substantially this year—it’s currently 4-6 years ahead of its anticipated sales volume for 2020. Coupled with a reduced supply chain and workforce to cater, shipping delays have compounded. Sometimes, manufacturers have completely run out of supplies and merchants have to fight for reduced inventory.
This has been difficult on carriers.
National carriers like USPS have been hit hardest. The USPS’s commitment to delivering to every US-based address is a big one. As such, delays have become standard. USPS is now operating with an additional day in delivery time frames for their services.
UPS and FedEx removed delivery guarantees for their ground services. This information is not to criticize or stoke fear. Instead, it has recalibrated consumer expectations of what to expect this holiday season.
Customers Expect Delays
Recently, ShipStation conducted a research study with ecommerce customers and found that 79% of them are OK with waiting longer for their orders as a result of COVID-19. However, while these delays are expected, proper communication is crucial.
Empathizing with your customers is important and customers are generally understanding of what is and is not within your control. However, if this is not communicated to them at checkout or via followup emails, there is no way of knowing.
We found that 90% of customers also attribute a poor shipping experience to the merchant. Frequently, this is attributed to poor communication between the customer and merchant.
Setting proper expectations early can lead to a more human connection. With COVID removing some of our abilities to do this, creating a positive shipping experience can increase customer engagement. This has a greater chance of converting one-time buyers into long-term customers.
4. Combat Additional Fees and Surcharges
The USPS has been hit hard by COVID. And while peak surge surcharges have been common with UPS and FedEx, 2020 is the first time the UPS has announced this information. This is not their annual rate increase, though. That is still yet to be announced. Luckily, the surcharges only range from $0.24 to $1.50 per package.
However, the recent influx in remote working has shifted parcel delivery to more residential addresses. Because of this, merchants shipping with FedEx and UPS need to be mindful of the residential surcharges accrued post-billing.
For UPS and FedEx, this is usually around $4.00 per shipment. Even though heavier parcels weighing over 3 lbs or so tend to be more affordable with FedEx and UPS, it may be beneficial to look into using USPS for parcels shipped to residential addresses.
If you have the means to offer BOPIS (buy online, pick up in store) you should definitely offer it.
However, finding ways to eliminate or reduce residential surcharges for post-billing carriers such as FedEx and UPS is a quick win. Luckily, ShipStation offers rates with UPS that greatly reduce and eliminate certain surcharges such as fuel and residential surcharges.
5. Offer Express Shipping Options
In our study, we also found that 47% of shoppers are more willing to pay more money to receive items more quickly than they did before COVID.
Luckily, most express services such as USPS Priority Express and FedEx and UPS Air services have not been hit as hard as standard Ground shipping options. Because of this, two-day shipping services still arrive on time. It’s worth noting, though, that some services have had their delivery guarantees suspended due to COVID, so it is likely that there will be no financial compensation in the event the carrier doesn’t deliver within two business days.
This could be due, in part, to the fact that more people have moved their shopping online. Some people are less tech-savvy than others and don’t reflect current trends or expectations of ecommerce shipping.Keep in mind though that only 58% of consumers say that they are willing to wait longer for their deliveries to avoid paying shipping fees, down from 69% in 2019.
Common Questions About Guaranteed Delivery Times
Here are some of the common questions that retailers ask about guaranteed methods to provide on-time delivery for the holidays.
My supplier can’t meet my deadlines. What should I do?
The best safeguard against this is to have dual sources at a minimum. Many retailers have multiple suppliers available in case there’s a problem with availability or pricing.
I struggle to keep the right amount of inventory on the shelf. I either buy too much or too little. What can I do to prevent this?
It’s one of the most difficult things for retailers and warehouse managers to do – keep the right amount of inventory on the shelves to fulfill demand. The solution is to have real-time access to accurate data that spans all of your sales channels, including Amazons FBA. Robust reporting that allows for better forecasting, ordering, and management of safety stock and supply chains is also a huge plus.
If you want to ensure you can handle the volume for peak sales times and on-time delivery before the holidays, you need to make sure you can maintain accurate inventory levels across all sales channels and have efficient warehouse operations.
Utilizing SkuVault and ShipStation together can help you run your business more smoothly, both on the back end and customer-facing side.