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Key Analysis Exposes the “Want it Now” Shipping Strategies for Holiday Retail. Agile Network.

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Key Analysis Exposes the “Want it Now” Shipping Strategies for Holiday Retail

Today’s shoppers take “Free” shipping for granted.

Since the debut of Amazon Prime and other popular online subscription-based eCommerce services, consumers are well acclimated to the idea of low cost expedited and free shipping. A recent 2016 PwC analysis* revealed several key insights for what some would describe as the “Want it Now” culture of today’s consumer, many of whom will be eagerly placing an estimated average of $1,200 towards retail holiday orders.

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What can your business do to stand out in a very competitive retail landscape? Well for one, offering free shipping and free returns is no longer a core differentiator. The analysis found 60% of retailers will provide both free shipping and free returns this holiday season. Unless your business has it’s transportation management under control, it is difficult if not impossible to offer competitive shipping to your end customers.

The study also revealed that consumers have indicated both free shipping and free returns are a “must-have”: more specifically, 90% say free shipping is a very important deciding factor, while 78% want free returns.

Where enterprise retailers have the advantage of their large scale transportation spend when negotiating rates, other mid-size to large companies don’t have to struggle to keep up with rising transportation costs simply because they don’t ship as much. Leveraging a multicarrier shipping solution can benefit their position with a variety of cost-effective solutions, such as incorporating regional carriers in their transportation planning, or allocating transportation spend in other ways to take advantage of order consolidation, drop-ship, ship-from-store, and ship-to-store, to name a few.

With optimal routing and shipment planning, retailers can position their shipping methods at a lower and more affordable cost to their customer base. When you have transportation operating inefficiencies driving up costs, on top of rising general rate increases, it certainly makes it difficult to pass shoppers along free shipping or free returns, especially in emerging market areas where home delivery is the still the most popular option for online shoppers but also comes with a higher cost to serve.

However consumers did indicate an openness to new online order pickup options. 33% of shoppers were willing to try curbside pickup after ordering online: and 17% currently use that option regularly or on occasion. Consumers who do opt for curbside pickup, gain a benefit in shaving a few days off of delivery and may save on their shipping. 28% of potential first-time consumers were open to pickups at a designated location, such as an online order pick up at a FedEx Office or UPS Store, and 17% were open to Buy Online, Pick up In-Store (BOPIS).

Collectively these online order fulfillment models, dubbed “click-and-collect”, will grow as retailers and consumers find their balances between an order’s speed, cost, and convenience as retailers leverage a comprehensive transportation management solution to achieve the most value at the lowest cost.

For those focused in eCommerce, innovating to provide flexible shipping and returns options will help your business stand apart from the crowd.  It stands to reason your business will gain a competitive advantage whenever eCommerce departments implement flexible shipping and returns options with specific attention to their customers’ delivery and returns preferences.

Let us know if you’d like to learn more about effective transportation management this holiday season.


*To view the PricewaterhouseCooper Holiday Report, please click here.