Shipping is a significant concern for small retailers, large enterprises, and consumers (yes, this is stating the obvious). We have written a variety of articles in the past about shipping, including our own experiences and strategies. Today, we received a “State of Shipping” report from Shippo, highlighting some fascinating statistics.
- E-commerce sales will soon be a trillion-dollar industry.
- The number of small and medium-sized businesses (SMB) offering free shipping has lowered by about 20% in the last four years.
- A staggering 47% of consumers prefer free shipping, and 27% will only pick companies offering free shipping.
- Only 27% of retailers are covering the shipping costs affiliate with return items.
- 46% of all consumers expect free shipping costs for returns.
- Almost 80% of consumers expect fast delivery lower than 4 days.
- The same day and next delivery options are becoming more popular to consumers but smaller retailers are not quite yet ready to offer that service.
- Only 18% of consumers care which carrier (UPS, DHL, etc.) your company utilizes. They are far more concerned with costs.
- 44% of SMBs report they work with only one carrier. This is probably so they can maintain better bulk rates. A whopping 55% of SMBs seem to be working with 2-4 different carriers.
At the time of this post, the latest report was not yet available directly from Shippo’s resource area, but it should be soon. There are some shocking findings in this report.
First, I never expected to see so many companies abandoning the idea of free shipping (a positive for SMBs everywhere). Clearly, shipping fees are too costly to absorb and force small businesses to inflate prices, in effect, making them appear more expensive than the competition.
I was also stunned to discover so many companies did not pay for the shipping costs affiliated with returns. That number has dropped 20% in the last few years, so I suspect that statistic will continue to decline. The report indicates businesses are experimenting with various return policies as it remains a major concern for consumers.
Amazon is still impacting how the overall e-commerce industry tackles shipping solutions. They are raising the bar on delivery times forcing small businesses to follow suit or get left behind. The era of 4-7 day deliveries is becoming obsolete.
“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.” – Jeff Bezos
Conclusion
We are big fans of Shippo, but they have no idea we wrote this article.
Our company offers a variety of shipping options tailored to our business that consumed years of missteps and strategies. For the most part, we are finally satisfied with the choices we provide, but we are always evaluating alternative strategies. Our approach embraces a formula that includes UPS, USPS, Shippo, Shopify shipping, and ShippingEasy.
If you would like to discuss your shipping strategy, please feel free to email chris@printkeg.com.
