Mobile accounted for 25% of Ulta's e-commerce revenue during Q2.
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It’s not uncommon for e-commerce merchants to have a substantial percentage of outgoing packages that could qualify for first class mail delivery. Yet many merchants ship those items by private carrier out of concern of losing a volume discount. That may be short-sighted, Zimberoff says.
“A retailer can end up saving more in the long run than the value of the discount by shipping those lower-weight items by first class mail, but they don’t always look at it in those terms,” says Zimberoff.
ShipRush provides integrated shipping software for the Amazon, eBay, PayPal, Magento and Yahoo Stores e-commerce platforms. As shipping data is downloaded to the application it automatically prints mailing labels, assigns a tracking number to the order, e-mails the tracking number to the consumer, and sends a packing list for the order to the retailer’s fulfillment department. Thanks to carrier sponsorship, free versions of ShipRush are offered to FedEx and USPS shippers.
While many retailers look to lower shipping costs by focusing on the actual rates they pay, improving delivery performance can also have a significant impact on reducing their overall business economics. Delivery that is consistent with consumer expectations is critical to satisfaction and, importantly, can reduce both customer service costs and the cost and quantity of reshipments. Reducing misrouted or incorrectly addressed shipments also reduces these costs. Between 2% and 4% of all mail is either misrouted or undeliverable.
When a package fails to be delivered when expected, retailers typically receive several calls from the consumer who is anxious to know why her package has not arrived and when it should be expected. To satisfy the customer, the retailer often resends the order using a higher-priced express service, which significantly increases the shipping cost for that item.
Verifying and correcting addresses before packages enter the mail stream is one way to reduce returns as a result of failed delivery. Shipping companies that perform this service add value to their clients’ businesses in the form of improved deliverability and more satisfied customers.
“There are a lot of hidden shipping costs that retailers don’t factor into the discussion about rates, and the cost of undeliverable packages is one of them,” says MailExpress’s Clark. “Retailers need to look at the whole picture to understand the total cost and how a shipping partner’s services can ultimately create a better consumer experience through speedy, reliable, low-cost delivery consistent with expectations.”
MailExpress, which specializes in shipping packages up to five pounds, collects, processes and distributes packages for its retail customers, and leverages the U.S. Postal Service for final mile delivery. MailExpress’ service offering includes address verification, delivery confirmation and web-based package tracking. MailExpress guarantees delivery in five days or less.
Delivery issues become more complex when shipping to consumers who live in other countries. As retailers expand their business globally, they have a growing need for shipping partners that can help them file the paperwork needed for packages to clear customs and to figure fully landed costs, including duty and tax for international orders.
“There are a lot steps that retailers need to take to prepare an order to be shipped internationally and clear customs, and one of the most important is accurately figuring duty and taxes in advance,” says DHL’s Tessy. “Consumers don’t want to pay hidden tax, duty or surcharges when it comes to international orders.”
In addition to transporting packages to local postal services globally for final delivery, DHL also provides direct mail services. Retailers can use DHL to transport direct mail promotions or catalogs to the local postal services around the world. DHL can electronically send a direct mail promotion to its facilities in or near the country of destination, print the materials locally, and then drop them at the local post office for distribution with a reduced carbon footprint. The service is more economical than traditional cross-border mailings and slices days off delivery time.
Another option for handling the cost of duty and tax for international orders is to require the consumer to pay them upon receipt of the item. Retailers that choose this option should fully disclose this obligation to the consumer so it does not come as a surprise upon delivery and lead to consumers rejecting packages.
International buyers are sometimes confused as to how much shipping will cost. And merchants don’t want to receive a bill weeks later for import duties. One way to be certain international consumers understand they are responsible for paying duty and tax upon receipt of the item is to make it clear during checkout that the customer is responsible for duties and import fees.
“Without full disclosure and some acknowledgement by the consumer of their responsibility, there is too much risk the consumer will reject the package upon delivery,” says ShipRush’s Zimberoff.
Retailers are also advised to carefully consider the success rate of shipping packages from the United States into foreign countries where they want to sell. “In some countries, the success rate is not that good, because the item either gets lost and is never found or is stolen somewhere in transit,” says Zimberoff.
Despite all the effort retailers put into shipping items to consumers quickly and cost-effectively, returns are inevitable. Retailers that make the return process as easy as possible for the consumer have a better chance to win their loyalty, and reduce customer service costs.
Some retailers can predict when a return is likely to occur, such as when a consumer orders two different sizes of the same shirt. In this case, the retailer can proactively include a return shipping label with the order. Other types of orders that are likely to generate a high percentage of returns are sales made after midnight. These are frequently impulse buys that often lead to buyer’s remorse and a subsequent return.