Each year, more customers pivot from brick and mortar stores to online shopping. As this overall volume increases, it’s only logical that holiday sales would also trend upwards. In fact, 2018 Black Friday brought in $6.2 billion in online sales, a growth of 23.6% year over year. Naturally, with increased online holiday shopping there is an increase in holiday shipping. And while there are more opportunities to attract more customers, this also makes for that much more competition. Understanding changing consumer demand is what makes you stand out among the competition and is your best shot at winning more sales and gaining repeat customers once the holiday season ends.
Free Shipping is the New Norm
While consumer demand for express shipping is high, there is still a greater emphasis on free shipping among most customers. According to the National Retail Federation, 75% of consumers expect free shipping on orders over $50. This is up from 68% in 2017.
To break it down into generations, Baby Boomers (born 1946-1964) wanted free shipping more than other groups—88% actually expecting it. That compares with 77% for Generation X (1965-1980), Millennials were the lowest with 61% for Millennials (1981-1994) and 76% for Generation Z (1995 and later).
While cart abandonment is an ever-present issue, many customers won’t even place an item in their cart unless they know shipping will be free. As we move into the holiday season—particularly the big, high-competition shopping days like Black Friday and Cyber Monday—free shipping can mean the difference between making a sale or not. In fact, ShipStation’s survey and found that 69% of consumers would rather have free 5-10 day shipping than pay for it to arrive more quickly.
What About Express Shipping?
While Amazon Prime has rewired how we think about online delivery, not everyone sees all online purchases as needing express shipping. Express shipping is still important, but it is still seen as a value-added charge. This is particularly true of items in the following categories:
• Pet Supplies
• Personal Care & Hygiene Products
Express shipping is generally seen as 2-day delivery and quicker. ShipStation’s study found that only 49% of consumers expect it to be offered. And 37% expect to have to pay for this option.
The major reason to offer expedited shipping, though, is that it is often incorporated into gift buying. In ShipStation’s study, 76% percent of customers said they are more willing to pay for expedited shipping if it is as a gift for someone else. As we approach the holiday season, especially December’s procrastinators, offering expedited holiday shipping is a great way to increase cart conversions.
Ship Orders the Same Day They Are Placed
Whether you can offer expedited or free shipping or not is one thing. But, expeditiously shipping products out of the warehouse is a must. The sooner a customer receives their shipping confirmation email with the tracking link, the sooner they breathe a sigh of relief. Staying on top of order fulfillment can be challenging, but it leads to repeat customers. Offering free “Same-Day Shipping” is a great way to incentivize customers to shop with you. This doesn’t mean they’ll receive their order the same day they place it. It just simply means that you’ll ship out an order on the day it’s placed. Using a shipping software is a great way to stay on top of your order volume and keep them going out the door as quickly as they come in.
Returns Are Becoming a Selling Point
Returns are objectively unenjoyable for everyone involved—except the carrier. However, there is a lot of selling power in doing returns well. According to Allbusiness, 91 percent of customers factor return policies into their online shopping. During the holiday season, returns are more common. And a website that doesn’t offer returns, or offer them well, will likely be sidelined in favor of a company that has a good returns policy.
80% of customers expect to be able to return purchases for free. This can be difficult to offer—particularly if you offer free outbound shipments as well. This is certainly an area that express shipment is not necessary. If you can use cost-effective shipping options like First Class Mail or hybrid services (Surepost or Smartpost), do it.
What This All Means for Your Holiday Shipping
As customer demands shift and grow more towards express and free shipping, it’s important to protect your profit margins. While free shipping and easy returns can be costly, remember that these options are the new norm for many customers. And, unfortunately, if you can’t offer these shipping options to the customers, there’s likely someone else who can.
About the Author: ShipStation is the world’s leading web-based shipping solution that helps e-commerce retailers import, organize, and ship orders quickly and easily—wherever they sell, however they ship. ShipStation integrates with over 160 of the top marketplaces, selling channels, carriers, and fulfillment providers. Utilize features like auto-selecting shipping preferences, customizable automation rules, multi-carrier rate calculators and shipping, and much more.