Are Customers Complaining About Your Shipping Costs?
Customers are shopping online more than ever. Retailers that were once known for their amazing store presence are now competing in the global marketplace on the e-commerce front. They all have the same goal: create a customer experience that keeps people coming back. And although there are many challenges in building an amazing online shopping experience for customers, shipping takes the spotlight.
Over 50% of consumers spend $25 – $100 per month online. What’s even more impressive is that 40% of consumers spend $101 – $500 per month online. So you’ve got to be thinking, “Why don’t I see those statistics at my company’s online store?” Well, do you have a high cart abandonment rate? The issue probably isn’t with your products- it’s most likely how you ship them.
When customers place a product in their cart, they usually have some intent to buy it. As they move through the purchasing process, surprise shipping costs tend to lead them astray. In fact, 70% of customers over the age of 55 abandon their purchases when the cost of shipping is too high, as do 67% females. Moreover, 41% of people aged 35-44 abandon when they don’t qualify for free shipping. So here comes the influx of customer complaints.
Now, let’s segment retailers real quick. Smaller retailers, dealing with tighter margins and less volume, are passing on all or part of the cost of shipping to their customers. Mid-sized retailers pass all or part of the cost on to their customers 72% of the time, while enterprise retailers pass on all or part of the cost 57% of the time.
But why do retailers do this? Why do they put this burden on their customers at all? Well, the main concerns that retailers have in shipping and logistics is that carrier rates are too high and/or they aren’t meeting their customer expectations due to an insufficient supply chain. Eek!
Many people who do not have expertise in the shipping industry think that in order to get a shipment to a destination the next day , they need to ship it with a costly next-day air service. However, very often a cheaper ground shipment service is just as efficient. This may be due to that insufficient supply chain I mentioned above. A discouraging 22% of retailers are still manually booking carriers! These retailers have no quick rate shopping abilities, and therefore tend to lose money and customers due to the way they ship. Efficiency is key to an exceptional customer experience.
With regard to loyal customers, it appears that the major reasons a customer makes a repeat online purchase are linked to logistics and transport such as free shipping, return options, delivery times and shipping updates. Shipping is therefore important not only to logistics experts, but also to sales and marketing specialists as it is an ideal tool for conversion and customer retention.
Bottom line: Retailers need to start thinking of ways to automate their supply chain processes with a high focus on their shipping strategy. Yes, shipping is in the spotlight, so automate it, make it look pretty and take a bow.