A recent study from ShipStation shows consumers are looking to cut back on spending in certain categories during the holiday shopping season. But the same study finds merchants are considering increasing delivery costs and extending delivery timeframes. ShipStation said that’s a critical misalignment, citing its findings that delivery speed and cost are the two most important conversion factors for online shoppers.
ShipStation’s “Holiday Shopping Trends Report: Winning Customers Despite Uncertainty” compiled data from over 8,000 consumers and over 800 merchants around the globe. It found 58% of US consumers expected to cut back on non-food spending this holiday season, but it also found that half of merchants expected online sales to increase this holiday season.
It noted that online searches for the term “save money” had increased in the US and hit a five-year high globally.
One takeaway from the report on the online delivery experience: “Consumers are much more likely to accept delivery charges if they are positioned as ‘services’. Businesses can enhance the delivery experience by offering timed delivery slots (dynamic pricing), accepting returns, removing old products for disposal, and offering supplementary services, particularly over the holiday period. Delivery service revenue can be achieved if implemented efficiently and at scale, although can be category-specific.”
Some additional findings of note include the following:
The report found the top six ways merchants planned to offset rising operating costs this holiday season included the following:
Increase cost of delivery (34.7%)
Change delivery timeframes (26.3%)
Increase promotions (18.1%)
Eliminate free returns (10.1%)
Restrict return policy (7.6%)
Increase staff (3.3%)
The report also found the biggest concerns consumers had impacting their spending headed into the holiday season and next year:
Rising inflation (28.8%)
Rising uncertainty about the economy (18.3%)
Lack of savings (11.6%)
Loss of earnings (11.5%)
Rising interest rates (9.6%)
Lack of available credit (8.6%)
ShipStation General Manager Robert Gilbreath advised merchants to proactively formulate a holiday season plan that includes re-examining and improving the experience they offer, “from the moment an order is placed online through last-mile delivery.”
The report is divided into several sections. The first section, “The financial squeeze,” highlights consumer sentiment versus merchants’ expectations. The second section, “The cutback landscape,” delves into the impact of consumer sentiment on categories and channels. The third and final section, “Adapting and thriving,” offers advice for merchants.
You can download the full report on this page of the ShipStation website.
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