Online purchasing has not-so-slowly and very surely become the way people shop. It is efficient, convenient and best of all can be done without any concern for traffic or trying to find dreaded car-parking at a mall. But in this age of ultra-convenience, a downside to online shopping is that we have to wait for our purchases to arrive in the mail which, of course, is not a concern with traditional retail. This provides the opportunity for online retailers to be competitive with their shipping policies and to use them to create a point of difference. Let us look specifically at what shipping best practice entails.
Make shipping info easy to obtain
A big faux pas in shipping practices is to make it impossible for customers to view the accurate cost of shipping without logging in. Shipping is a key consideration when deciding on a purchase and if customers feel like they are committing (by creating a account) before they have had all the information to decide if they want the product, they will feel pressured which often makes people run a mile in the opposite direction. Enable customers to obtain a relatively accurate shipping quote based on their postcode on the product’s webpage so that they can make an informed decision easily. Ease-of-use is a component of a sale which should not be underestimated.
Pricing shipping correctly
Another big faux pas is when shipping rates are artificially inflated by the retailer to create a profit margin. Customers are capable of ascertaining what is a reasonable shipping quote given the time frame and distance and they will be quite content to search elsewhere for cheaper shipping options if they feel yours are too costly. By the same token, if your shipping prices are more reasonable than the customer would expect which results in a reduced ordering cost compared to competitors, you are more likely to guarantee a sale.
Use shipping to incentivise sales
An effective use of shipping to encourage sales is to offer free shipping above your average order value. The company obviously then covers the shipping costs, which is an added operational overhead, however it encourages sales volumes to increase which increases the profits. This also makes customers feel rewarded for their custom, which creates a sense of loyalty, ensuring future sales. It is a win-win for everyone!
Get things ship-shape and out-the-door
Create a company policy where normal shipping practice will be to get inventory stock out the door the next business day. If customers choose the express shipping option, then ship these items the same day. By creating such high standards, the customer will feel that their custom is valued not to mention they will be far more likely to enlist the company’s services in the future. An added bonus of this is that you effectively clear the decks to receive more inventory stock into storage which is a sign of healthy inventory management.
Beat the targets
Given shipping is such a large component of a sale, it is important to see it right through to the end and ensure the shipping is efficient, cost-effective and reliable. One way to ensure efficiency in shipping is to under-promise to the customer and then over-deliver. This ensures the customer will be pleasantly surprised when their shipments arrive early and again, this ensures the company will be very strong against their competitors with respect to future orders. The additional bonus of setting realistic targets and aiming to beat them is that if indeed there is a delay with the shipping which is out of your control, it may be possible to absorb the error and still deliver the product on time to the customer rather than it resulting in an instant delay.
A concern of online shopping is which party bears responsibility for the item if it is lost in transit. Is it the shipping company, the retailer or must the customer simply write it off as a risk of online shopping? If the retailer quickly responds to any concerns over shipping delays and potential losses by reshipping an item quickly, customer satisfaction increases. However, if the retailer avoids taking responsibility, citing the shipping company as responsible and not acting quickly, the customer will feel frustrated and dejected and will most likely avoid any future purchases with the company. Look after your customer and their purchases right up until the point they are united together. Anything less than this is poor customer service and will not do the company any favours. Although holding copious excess inventory stock is a poor inventory management practice, replacing lost product in transit could be a reason for holding inventory over and above what may be required for customer orders.
Now that you know what to do and what to avoid when getting your inventory stock out the door, check out these tips on how to optimise shipping for improved customer satisfaction.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.