April 29, 2011, 12:54 PM

May 2011 Supplement: Solving the "Free Shipping" Puzzle

(Page 4 of 5)

In addition to its fulfillment and shipping services, SpeedFC provides a suite of e-commerce services including e-commerce platform and integration, tier 1 web hosting, interactive online marketing, order management, reporting and customer service.

Self-service tracking

Package tracking is a service that consumers are starting to demand more, especially around the holidays when delivery is especially time-sensitive. Many consumers prefer a self-service feature that lets them go to the retailer's site, enter the tracking code assigned to their package and see where the package is and an estimated arrival date. Hyperlinks to the tracking page can be embedded in shipping confirmation e-mails.

"We can include a Track My Package button on the retailer's web site that connects to our tracking system or an e-mail link that takes the consumer to our site," says Streamlite's Routledge.

Still, some consumers prefer to track a package by contacting customer service. Streamlite integrates with customers' back-end systems, transferring data via EDI, and provides detailed reports and access to real-time tracking information so that the retailer's customer service team can easily support consumer inquiries.

Advances in returns

For all the effort retailers put into making certain orders are properly picked, packed, promptly shipped and arrive intact, they know returns are inevitable. A customer that orders the same color blouse in two sizes is going to return one once she decides which size fits best.

When part of an order or an item is likely to be returned, it is recommended that retailers include a prepaid return postage label in the package or include a message on the invoice directing the customer to a web site where she can request that a return label with postage be e-mailed to her so she can print it out and send back the package.

"Returns are a hot-button issue in the industry, so retailers need to make it as easy as possible for consumers to initiate the return process because how convenient it is to return an item does influence customer satisfaction," says Dymo Endicia's Khechfe.

To help retailers keep down return postage costs, but ensure that every outgoing package has a return shipping label with paid postage, Dymo Endicia has created a solution that allows it create return labels with a postage stamp that is not activated until scanned into the U.S.P.S. system.

Because it is integrated with the U.S.P.S. tracking system, Dymo Endicia is able to monitor the postage code as it is scanned and electronically notify the post office to debit the postage from its account. The company then settles with the retailer.

"It's expensive to include a postage-paid return label into a package that never gets used or thrown away," says Khechfe. "Technology has advanced to the point we can now activate postage as the label is scanned, which makes it feasible for retailers to include a return label in every order shipped."

The returns process can be more efficient for retailers—and convenient for their customers by expanding the number of locations where consumers can drop off a package. UPS has built an extensive returns infrastructure through its network of UPS stores, drop boxes and UPS customer centers. The logistics provider also has an agreement in place with the U.S.P.S. to facilitate returns. The program, called UPS Returns Flexible Access, allows consumers to return packages by placing them in their mailboxes for their postal carrier to pick up.

"Returns have got to be flexible and hassle-free," says Mansour. "The more options there are for consumers to return an item the better the chance they will be a repeat customer."

A clear message

Making returns easy must be part of any shipping strategy for retailers. The ultimate goal is to take steps to minimize returns before the items is even shipped. While verifying orders before they go out the door can help retailers avoid incomplete orders, it does not address the issue of an item failing to meet a consumer's expectations.

Improving product descriptions, displaying accurate color images of the product and providing precise sizing charts so consumers are clear about what they are buying significantly reduce the chance a consumer will return an item because she is dissatisfied.

"Clear information up front about the product is one of the most effective ways to minimize returns," says SpeedFC's Zisk. "When we work with retailers on shipping and fulfillment, we meet with their copywriters to go over the need for better, clearer copy and high-quality images. We do the same thing when we help retailers develop their web sites."

A sophisticated delivery process not only satisfies customers, it can also serve as an effective marketing channel. The box used for shipping, the shipping label, the invoice, even shipping confirmation e-mails are providing retailers with new marketing and branding opportunities.

Some of the branding techniques being used include printing the retailer's logo on the inside of the box or on the shipping label. "Retailers can insert ads for upcoming promotions in the box or coupons for a discount on their next order," says Toner. "We are even seeing some retailers put their logo on the outside box again as a branding tool. That was something they got away from so as not to draw attention to a box that may be left on a doorstep."

Including marketing messages in e-mail shipping confirmations, invoices and packing slips are highly effective because those are documents consumers read. "Retailers are showing a lot more creativity in how they put marketing messages in front of consumers when it comes to the delivery channel," says Zisk.

Picking a partner

Given the breadth of services available from carriers and shipping and fulfillment specialist firms, sorting out which potential partner offers the best combination of services to meet their needs can be a bit overwhelming for retailers.

"One question that certainly needs to be asked is what are the potential partner's technical capabilities and how retailers can integrate them to their business through a seamless process," says UPS's Mansour. "Technology and innovation are how retailers close the order fulfillment and delivery loop while providing the customer experience many strive to achieve in this competitive market."

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