As a result of the COVID-19 pandemic, the retail landscape in 2020 barely resembles that of years past. Supply chains worldwide have been disrupted and increases in e-commerce have limited shipping capacity and impacted delivery times. Many experts are also predicting a second wave of COVID-19 cases this fall and winter, creating uncertainty and unease everywhere.
Given this landscape, retailers are preparing for an unprecedented holiday shopping season, most of which may take place online. According to May 2020 data from daVinci Payments, 71% of U.S. adults are planning to do more than half of their holiday shopping digitally this year. Should this prove true, retailers will be on the order fulfillment end of record levels of online orders, and to manage these volumes successfully, necessary extensions in operations, fulfillment capacity, and customer service should be soon underway (if they’re not already).
To help plan, we’ve pulled together six best practices for shipping parcels during the 2020 holiday season:
1. Plan for Earlier than Usual Holiday Shopping
Experts say the combination of retailers’ decisions to close stores on Thanksgiving, questions about the timing of Amazon’s Prime Day, and the tremendous opportunity for e-commerce sales this holiday season could create a new holiday shopping calendar, wherein sales occur earlier and big, in-store sales at the end of November play a much lesser role in holiday revenue – if at all. In fact, some of the biggest retailers are planning for a surge as early as October:
- Target announced it will launch its holiday sales in October. “Historically, deal hunting and holiday shopping can mean crowded events, and this isn’t a year for crowds,” it said in a blog post.
- Macy’s CEO Jeff Gennette said, “But when you think about a Black Friday, if you think about the 10 days before Christmas, what does that mean in terms of traffic if people are nervous about gathering with crowds?” He anticipates the holiday shopping season will begin after Halloween.
2. Use Regional Carriers
If you’re competing against retailers that offer one-day and same-day delivery, adding regional carrier options can help lessen their competitive advantage. Regional carriers can be the key to faster, cheaper, and more flexible delivery services, usually offering next-day ground delivery within 400 miles of a shipment’s origin – often at a lower rate and with fewer surcharges than the national carriers. In comparison, the next-day footprint of the national carriers’ ground service is only 200 miles.
3. Leverage a Cloud Multi-Carrier Parcel Management System
To manage high volumes of parcel deliveries while maintaining on-time delivery, retailers need to leverage multiple carrier services. A cloud multi-carrier parcel management system will quickly access different carriers’ (including regional carriers’) shipping rates through a single system, enabling retailers to quickly compare rates and select the optimal carrier service for each shipment according to business rules.
Retailers can also integrate their multi-carrier parcel management system with their e-commerce platform to give online customers the ability to choose from various delivery/cost options at the point of check-out. This can decrease the workload for order fulfillment teams while improving the purchase and delivery experience for customers.
4. Offer Free Shipping
In a 2018 survey by Internet Retailer, shipping charges were cited as the most common reason shoppers abandon their carts. And similar findings were echoed in NRF’s quarterly Consumer View 2019 report, in which 75 percent of consumers reported they expect free shipping, including on orders less than $50.
For retailers looking to increase online sales this holiday season and recoup in-store losses caused by the pandemic, this is likely unwelcome news. After all, absorbing shipping costs reduces margins. And the alternative, wherein a retailer simply embeds the shipping cost into the purchase price of the product, runs the risk that consumers will find the same product at a lower price elsewhere.
One way for retailers to give consumers the shipping offer they want while protecting the bottom line, is to secure the most cost-effective carrier service. Again, a multi-carrier parcel management system ensures the best carrier service is used for every parcel, and it can also help retailers avoid unexpected custodial fees incurred by bad addresses and non-compliant labels.
5. Take Steps to Ensure On-Time Delivery
One of the easiest ways to mar an otherwise good online purchase experience occurs in the final mile. Whether the delivery is late, damaged, or lost, retailers can easily lose a customer and even sustain a reputation hit from poor online reviews and/or word-of-mouth when the delivery experience fails to – ahem – deliver.
A sophisticated multi-carrier parcel management system will include a Control Tower, which means retailers can proactively manage against unwanted delivery events and provide shoppers with delivery transparency. Specifically, the system will send early warning signs when there are parcel delivery issues or “exception events,” empowering customer service teams to proactively trouble-shoot the exception event and communicate delivery updates to the customer in real time. For example, perhaps the product can be sent from a different distribution center to arrive on time. Or perhaps the customer is willing to retrieve the product from a nearby store or locker. Customers can even track and trace shipments on company websites without the need to visit carrier sites, reducing inbound calls about shipment status to customer service and increasing the customers’ browsing behavior on the retailer’s website, which (fingers crossed!) could lead to additional purchases. Consider too that tracking delivery exception events enables retailers to capture accurate carrier performance data – improving carrier service measurement and better informing carrier contract negotiations.
6. Put a Returns Strategy in Place
Consumers will appreciate a fast, efficient returns process and will be more likely to generate repeat business if their returns experience is a good one. The key to winning this customer loyalty is to make the returns process simple.
Forward-thinking organizations who put the customer experience first employ a variety of creative methods for simplifying returns, including dual-use labels (labels that serve the purpose of both the outbound shipment and return), peel-off labels (where the outbound label easily peels off to expose a return label), and perhaps most notably, accepting returns of online orders in stores. This last approach is popular among omnichannel retailers that have both online and physical stores, but it was also adopted by Amazon, who has partnered with a large retail chain to accept, process, and ship returns at no cost to the customer – they simply initiate the return in the app and take the item to the store where it’s scanned, processed, and held until shipment.
The 2020 Holiday Shopping Season is Here
Looking ahead to October, retailers should have a parcel shipping strategy in place that delights customers and increases business. To learn more about simplifying the complexity of high velocity parcel shipping, contact us today.