The holiday shopping season is ramping up, and that means sellers are anticipating increased orders in what for many merchants is the busiest quarter of the year.
Making sure you’re ready to pack and ship holiday orders is essential, but there are also opportunities to use shipping strategically in an effort to increase sales and customer loyalty.
We checked in with Katie May of ShippingEasyto learn some tactics sellers can use to attract holiday shoppers. ShippingEasy is cloud-based shipping label printing software that allows merchants to print discounted shipping labels and process orders faster.
EcommerceBytes: When does holiday shopping (thereby holiday shipping) kick off for online sellers based on what you see with your customers?
Katie May: It’s certainly getting earlier every year – last year Walmart was in the news for kicking off their holiday shopping season the day after Halloween. But the big rush still starts around Thanksgiving; according to the NRF, last year 26% of shoppers shopped online on Thanksgiving day, 47% on Black Friday, and 36% on the Saturday after black Friday.
From our perspective, most sellers that use ShippingEasy will see a more gradual uptick from now through Thanksgiving, and then a massive spike in orders starting Thanksgiving Day.
So our recommendation is that they revisit and optimize their shipping operations now, and use the gradual increase over the next few weeks to stress test their plans. We actually just published a guide to help them do this: The ShippingEasy Guide to Holiday Shipping for eCommerce 2015.
EcommerceBytes: Are there any special services sellers should consider offering as shipping options during the holiday period as shoppers start to get concerned about getting gifts in time?
Katie May: Oh yes! This is a great time of year to re-evaluate your shipping options, processes, and costs. We recommend sellers look at:
Service levels: Free shipping is a massive conversion booster if your business model allows you to comfortably absorb the costs; otherwise sellers can consider thresholded free shipping where they can set the threshold just above their current Average Order Value (AOV) to drive up their AOV – again if the economics work for their business. If the economics don’t work, the seller can think about flat-rate shipping, or perks like free Saturday delivery during the holiday season.
Saturday shipping: This one has a lower economic bar for most sellers – it might cost some overtime. But basically, make Saturday a work day to get orders out. You can even consider using Sunday to queue them up for Monday pickup.
Saturday delivery: If a seller doesn’t typically offer this, consider it as an extra-cost option or provide it for free as a Christmas gift to your customers during the season. If you use USPS you get this automatically – which means you might think about shifting some shipments to USPS, at least for the holidays, to take advantage of it.
Returns: Per UPS, 63% of customers take issue with having to pay for returns, and shoppers are especially concerned with returns during the holidays, so again if your business model supports it, now is a good time to look at the feasibility of offering free or flat rate returns. Even if you can’t afford to absorb some or all of the cost of mailing a return, you can make getting a discounted return label straightforward to your customers (most shipping software supports the direct email of a return label as a PDF to the buyer with a single click).
EcommerceBytes: Are those services you mention available to lower-volume sellers or sellers on marketplaces?
Katie May: The good news for online sellers is that USPS is committed to supporting ecommerce and allows the PC Postage providers and online shipping software to offer discounted rates typically reserved for the Fortune 500. Small sellers get the same volume discounts and suite of services available to large sellers, which helps maintain a more level playing field online. A few more specific suggestions:
- USPS First-Class packages is the best rates for packages under 1 pound.
- By using the Carrier cut-off dates as a guide, Ground shippers can upgrade to Priority (a 2-day service) and then Express for the last few days but keep their costs lower until then.
- Leverage a Carrier Release – to get more packages delivered on first attempt by making it clear to the carrier they can leave on a porch or with a neighbor.
EcommerceBytes: USPS, FedEx, UPS – what advice do you have for small sellers regarding shipping carriers during the holidays?
Katie May: Our best advice is to be clear on the inclusions of any given service (eg how much insurance is included; is there a guaranteed delivery date) and to go through the process of calculating the fully loaded costs.
In some instances there are surcharges (fuel, residential delivery) and other costs not evident in the base label fee.
Dimensional weight is new this year and online sellers are not as familiar with the additional charges for certain box sizes. This can add unexpected costs and wipe out the margin for certain products. There are handy calculators to assist with this online. (Note from the editor: ShippingEasy provides one such calculator on this page.)
EcommerceBytes: Should merchants be willing to send items to a different address than the billing address to attract holiday gift-givers? How do you balance the hope of additional sales with the risks of fraudulent purchases?
Katie May: An important determining factor is the availability of fraud detection tools, plug-ins or add-ons on smaller commerce platforms. Here are some rules of thumb for smaller sellers:
- Restrict access to the ability to enter different shipping and billing addresses to the safest customers. For example, no shipping to a different country, only customers who have bought in the past can use the feature, etc.
- Use the most conservative fraud triggers you can for orders with different addresses. Plan to spend more time manually reviewing orders routed to the high-risk queue. Take special note of an order with different addresses that has no gift note, multiple of the same item in one box, high item value, etc., to flag an order for review.
- Just flag every order with a different ship/delivery address for manual review BEFORE you ship it.
EcommerceBytes: What can online sellers do to make it easier for shoppers who are buying gifts?
Katie May: Perhaps counterintuitively, the main thing we recommend is that the seller devotes appropriate time to preparing for the season. That means first strategically evaluating all the customer-experience-enhancing features, like:
- Changes to your shipping options/costs, and your return policies.
- Support for different billing & shipping addresses, and multiple ship-to’s.
- Gift wrap and gift notes.
Part of that evaluation is to determine what’s going to work best for you and your customers – and what you can make work operationally.
For example, will your commerce and shipping platforms support the functional changes you want to make? Do the economics work for your business? Can your operations/number of employees support the changes? How about your supply chain and your shipping partners?
It’s critical to keep in mind that all of these behind-the-scenes questions have a direct impact on your ability to get product out the door and therefore on your customer experience at this critical time of year.
In a nutshell, to make it easier on your shoppers, make sure you can deliver on the promises you make and services you offer them!
EcommerceBytes: Does the task of packing and shipping present any marketing opportunities for merchants?
Katie May: Yes! If you allow direct shipping to gift recipients, it’s a perfect opportunity to make many new potential customers aware of your brand.
Be clear about your branding and messaging (even if you use carrier-supplied boxes, use the packing list and label – or maybe even custom tape – to represent your brand).
Do promotions: you can include them in the box via a customized packing slip for direct gift recipients, or email them to the giver and/or receiver.
Be on time, and be communicative: receiving a package is always the most critical component of an online purchase experience, and even more so this time of year. Communicate proactively via email when it makes sense throughout the process, and followup to check satisfaction after the package arrives. If something goes wrong, be transparent and do what it takes to make it right.
EcommerceBytes: Any other marketing tips?
Katie May: Yes! Lots!
Think about how you can turn returns into repeat business. A simple thing to do if you charge for returns is to give the customer a credit equal to the return charge or shipping for use on a later purchase.
Look at wishlist items not purchased and target promotions based on them.
Lots of your customers will receive gift cards for Christmas – if you are in a position to take advantage of this, consider promoting to them.
Everyone is waiting for the post-holiday sale! Get their attention by doing some prominent (even if limited) markdowns on your site the day after Christmas, or do a targeted email campaign at recent customers offering some kind of promotion.
Retarget customers who looked before the holiday but didn’t buy. Throwing in a little “just for you” discount can help here
Promote the new season’s merchandise at full price, especially in trend-loving markets.
EcommerceBytes: When is holiday shopping over?
Katie May: As with the question of when it starts, this is a moving target. Last year, PWC expected about 8% of holiday spending to happen after Christmas day. There are lots of folks who simply prefer to celebrate after Christmas. We definitely see the big spike in buying end around December 23, but we recommend thinking about the following:
Post-Christmas shopping: consider the aforementioned promotions for people who did celebrate Christmas but still have stuff to buy, gift cards to use, are looking for deals, etc. Also consider promotions for shoppers who may prefer to or also celebrate New Year’s Day or Kwanzaa with gifts.
Roll back holiday services: The big question is, if you’ve made any major functional or customer experience changes, will you roll them back at some date? If you, for example, changed your shipping service level pricing or options for the holiday, or offered free returns, when will you shut that down?
We recommend keeping such initiatives going until at least January 1 (and advertising that fact), and in that timeframe looking at the data on how these initiatives helped increase conversion or AOV (average order value) vs how much of a cost impact they had, in order to see if it makes economic sense to keep them live (permanently or long enough to collect more regular-season data).
Start planning for next year: Finally, once it’s over it’s never too soon to start thinking about next year! The best time to look at how you did over the holidays is as soon as possible after the rush is over. Look at all the data you possibly can to see what worked and what didn’t, and to start planning your strategy for next Christmas.
ShippingEasy prepared a guide for online sellers called the ShippingEasy Guide to Holiday Shipping for eCommerce 2015. It’s available for download on the ShippingEasy website.