Ship it their way

What’s another way to increase sales revenues without coupons or lower prices?

One answer might surprise you: make it easier for customers to return their purchase. Nearly 80 percent of customers say they’re more motivated to shop with a retailer who makes returning a gift a positive experience, according to LoyaltyOne.¹

When it comes to shipping, consumers want flexibility and they reward retailers who give them what they want. When retailers provide the option to order online and pick up in the store, 40 percent of shoppers who do so purchase additional items at the store, a comScore study found.²

Top Five Tips
Satisfying the fickle desires of consumers isn’t easy. Retailers have to evaluate their customers’ preferences carefully, as well as their own carriers, their shipping policies, and even warehouse locations to ensure their operations are designed to satisfy a wide range of customer requirements. Here are five ways retailers can give consumers control without having their costs spiral.

1. Prioritise cost over speed.
Retailers need to consider how shoppers weigh the tradeoffs of cost and convenience. “Customers are choosing cost over timeliness — in general, they’d rather pay less and have the package come a little later,” says David Bilodeau, a product marketing manager for Pitney Bowes. “However, they want the option to pay more to have it delivered faster.”

Savvy retailers, who study and track their customers' preferences, can provide an appealing combination of offers. They can raise the price slightly on fast-selling items to keep shipping costs lower, offer free shipping to customers who spend more or on second orders to encourage additional business, or provide free shipping during flash sales to push goods.

But don’t have so many offers that consumers feel overwhelmed. “Customers want retailers to provide them with shipping and return options, but they don’t want to have to wade through too many choices,” Bilodeau says. “They want flexibility, but simplified flexibility.”

2. Re-examine your carriers.
Retailers should continually analyse their selection of carriers, not only in pursuit of the best price, but for better levels of services. “Some retailers are locked into the thought process of only using one carrier they prefer,” says Mike Graves, director of channel sales for Pitney Bowes. “That’s dangerous because you are missing out on regional carriers who can move faster in particular areas and provide next-day delivery at a better price.”

“You need to keep your finger on the pulse of industry changes,” Graves says. “Auditing your shipping operations and implementing multi-carrier software can help you strike the balance between cost and customer satisfaction.”

3. Be a wiser warehouser.
The concept of warehousing is in tremendous flux. Warehouses that used to only replenish retail stores are now being positioned for e-commerce customers and other needs as well. “Many retailers were starting to think that storefronts were dinosaurs,” Graves says. “However, they are beginning to show new benefits, such as acting as mini-warehouses that goods can be shipped from.”

The changing nature of warehouses requires companies to develop better systems for tracking inventory and determining granular costs for all types of shipping. In the past 18 months, 44.1 percent of online retailers upgraded their fulfillment, inventory or order management software, according to a survey by Internet Retailer.⁴

This helps to ensure the right product is shipped from the right place to increase efficiency and reduce delays.

4. Make returns easier.
Your return policy is a huge factor in whether someone buys your product. Today, 39 percent of customers examine a company’s return policy before buying; that’s up from 33 percent two years before, according to comScore.⁵

Companies are finding ways to ease the process of returns, such as online software that allows customers to generate return shipping labels and track the package. Some retailers are providing a return shipping label with the product when it goes out. Others are giving customers a longer time frame to return products — and there’s good evidence that this actually makes it less likely a product will be sent back.⁶

5. Prepare for tomorrow.
“You need to pay attention to your customer base and examine regional and global trends,” Graves says. “Flexibility means truly paying attention to where customers are going.”

The comScore study found that 5 percent of customers have had goods shipped to their workplace; 5 percent to a friend or family member; and 3 percent to another location, like a grocery store.⁷

While those might seem like small numbers, remember that consumer attitudes and expectations can change fast. As shipping becomes a more nuanced and critical element in the shopping process, retailers need to keep one step ahead of competitors and consumers.

By keeping an eye on what customers want, and constantly examining new ways to satisfy them, retailers can expand their shipping from a service to a competitive advantage that can result in stronger relationships and more sales. 

¹ “Half of U.S. Shoppers Say Returning Gifts Turns Holiday Fest Into New Year Stress,” LoyaltyOne, February 6, 2015

^2,5,7 “2014 UPS Pulse of the Online Shopper™,” ups.com

⁴ “Exclusive survey results on fulfilment and delivery,” Internet Retailer, February 3, 2014

⁶ “Your Shipping Charges Take Shoppers by Surprise,” crazyegg.com, June 23, 2014; “4 Ways to Improve Your Ecommerce Customer-Return Policy,” Jane Porter, Entrepreneur.com, January 14, 2013

© Pitney Bowes 2015.  All rights reserved.

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