Reduce the amount of time it takes for an online retail order to be picked, packed, and given to the package carrier, and your ecommerce business will have gone a long way toward meeting customer expectations for fast shipping.
Online shoppers often want both free shipping and fast delivery. Consider that in May 2016, AlixPartners, a well-known consulting firm, reported ecommerce shipping expectations for American online shoppers who were or were not members of Amazon Prime.
About a quarter (24 percent) of Amazon Prime members and 15 percent of shoppers who were not Prime members expected online orders with free shipping to take two days or less to arrive, including both the time it takes a merchant to process the order and the time it takes the carrier to transport it.
A majority of the online shoppers surveyed expected free shipments to take five days or less to be delivered, again including not just the transit time but the retailer’s order processing time, too.
The cost of not meeting customers’ expectations for fast delivery may be high. UPS and comScore, the trend-tracking firm, reported in 2016 that one in three online shoppers made the decision to purchase from an online marketplace — think Amazon — rather than another retailer because of faster delivery.
Online businesses not delivering quickly may be losing new and repeat sales.
Process Orders Effectively
Ecommerce retailers have a few ways to address fast and free shipping and the customer expectations associated with them. Stores might choose different service levels from a carrier (such as second-day air versus ground shipping) or use distributed warehouses and fulfillment centers to strategically place products close to likely customers.
A mid-sized or larger merchant might try to negotiate special rates with a carrier to offset more expensive shipping methods or use techniques like zone skipping. Or sellers could simply focus on the part of the shipping process they have the most control over. They could focus on making the time from when an order is placed until when it leaves the warehouse as short as possible.
Again, this order-processing time is often completely within your business’s control and it can have a significant impact on when an order is delivered.
Here is an example.
Imagine that you have an order come in at 5:00 p.m. on Tuesday. Your warehouse is just closing down for the night, so the order, which is bound for a customer five zones away, isn’t processed until Wednesday. The order takes three days in transit but isn’t delivered until Monday because the carrier you selected does not offer Saturday delivery on ground shipments.
From your customer’s perspective, this order took a week to arrive. If the customer expected the order to arrive in just a couple of days, there was a service failure.
If, however, your warehouse had picked, packed, and dropped the order off with the carrier on Tuesday evening, the order would have arrived at your customer’s house on Friday, three days sooner.
Adjusting and Streamlining Order Processing
Carrying this example forward, it is likely that the merchant could have, in fact, shipped this 5:00 p.m. order on Tuesday.
Many carriers will accept package drop-offs until 6:00 p.m. on weeknights. So an ecommerce merchant might schedule warehouse employees (or at least a portion of them) from 10:00 a.m. to 6:00 p.m. rather than the more traditional 9:00 a.m. to 5:00 p.m. This way, packing and shipping an order that comes in at 5:00 p.m. on a Tuesday is the norm rather than an exception.
The evening supervisor could make it part of her routine to drop off orders at the local UPS store by 6:00 p.m. and then go home. Or, if a retailer, has sufficient volume, that retailer might be able to schedule a 6:00 p.m. pick up each day.
This example may not work for every ecommerce business. But the idea of adjusting some part of an operation or a workflow to make order processing more effective and faster can be applied to just about any step in the order fulfillment process.
Specifically, a retailer might look at how:
- Orders are passed from the ecommerce platform to the warehouse;
- Orders are received at the warehouse;
- Labels, pick lists, and packing slips are printed and distributed;
- Products are picked;
- Packing materials are selected and used;
- Long the packing process takes;
- Orders are picked up or dropped off with carriers.
Even a small improvement in any of these steps might result in getting an order out of the warehouse and to a customer sooner.
Online shoppers expect fast ecommerce deliveries, and to stay competitive retailers will need to find ways to meet those expectations.