Whether you’re running a traditional, subscription or e-commerce business, you know that your shipping experience can significantly influence customer satisfaction. With peak shopping seasons in mind, making sure that products reach customers on time is crucial. From offering fast and affordable shipping options to sustainable fulfillment methods and reliable returns processes and policies, you need a shipping strategy that meets customer expectations and helps you stand out from the competition.
But it’s not always easy. Mastering the last mile can feel like a tough balancing act, with the majority of today’s customers expecting free and next-day shipping. An ineffective checkout process can pose a significant leak in your sales funnel.
If you pour large portions of your marketing budget into running ads and attracting customers to your website, only to have them abandon their cart at checkout because of unexpected logistics and transportation costs or a confusing return policy, well, that’s a problem. It’s estimated that abandoned carts cost U.S. online retailers between $111 billion to $136 billion USD in lost revenue annually. The price of not delighting customers throughout the customer journey is too great to ignore.
In this checklist, we’ll walk you through effective e-commerce shipping strategies that can help create loyal customers, increase your ROI and improve cost efficiency.
Ensure your logistics and fulfillment operation aligns with your business goals
A strong shipping strategy begins with a clear objective. When you determine what you want to achieve from your shipping strategy, you can set actionable targets and measure results. Consider if you want to:
- Increase your average order value
- Improve conversions
- Decrease costs
- Expand your business and delivery area
- Provide an environmentally friendly and sustainable shipping solution
- Reduce order processing and delivery timelines with Express services
- Partner with a reliable shipping provider
Understand the four stages of the shipping operations
Before you can send products out the door, you need to familiarize yourself with the four main stages of the shipment process:
- Order receiving: Ensuring that your products are in stock to fulfill an order.
- Order processing: Checking that the order data, such as the delivery address, is accurate.
- Order fulfillment: Packing and preparing products for shipment.
- Order returns: Organizing the reverse logistics of products to return them back to the seller or manufacturer.
Must-haves for a smooth order fulfillment and shipping experience
As you fine-tune your shipping strategy, you’ll need to have the following high-level details ironed out:
- Clear shipping costs: Since unexpected shipping costs make 55% of shoppers abandon their carts, ensure that you keep shipping costs clear whenever possible.
- Displayed expected delivery times: For every shipping option, let customers know how long each method will take. This is especially key around the peak season when shipping delays can occur.
- Order tracking: In addition to offering peace of mind, offering order tracking is so important that 91% of customers actively track their parcel.
- A solid returns service: As 18% of online purchases are returned, it’s essential to create a convenient and straightforward reverse logistics strategy for e-commerce practice.
- Customizable delivery options: From ultra-fast delivery to pickup preferences, let customers personalize their shipping experience to fit their needs.
- Plan in advance: Create policies that can cover weather conditions, peak season rushes and supply chain issues.
- Create sustainable shipping practices: Whether it’s using biodegradable packaging or eco-friendly shipping options like e-bikes, more customers are looking to support businesses that contribute to the circular economy.
- Partner with a reliable logistics provider: With a trusted provider, you can benefit from innovative and flexible delivery solutions.
For a deeper dive into these strategies, check out our ebook on building a winning e-commerce logistics strategy.
Calculate e-commerce logistics and e-fulfillment expenses
To determine what customers’ shipping costs will be, you must first figure out what shipping will cost you. In addition to considering indirect business costs, such as website updates and marketing campaigns, you’ll also want to consider the following factors to optimize your shipping charges.
- Carrier cost (shipping label): The amount your carrier charges for postage to transport a package from its point of origin to its destination.
- Packaging cost: The cost of the packaging such as boxes and bubble wrap.
- Fulfillment cost: The cost of warehousing, picking, packing and shipping orders.
- Return cost: The cost of returning, including cross-border and Express shipping, as well as the costs of product restocking or disposal.
- Package size and weight: The cost of the weights and dimensions of your shipments. The more accurate they are, the more precise the rates you’ll receive from carriers.
- Origin country and destination: The costs associated with your origin and destination locations. Keep in mind that when it comes to international shipping, even neighbouring countries can have shipping rates that differ from your own.
How to improve your shipping packaging
Your product packaging is an extension of your brand and part of the e-commerce experience. In addition to being functional, packaging reflects your business values. Consider which type of packaging is right for you:
- Customized packaging: Stand apart from the competition with a memorable unboxing experience with custom packaging such as branded boxes and tissue paper.
- Eco-friendly packaging: Shoppers are 57% less likely to buy products in packaging they consider harmful to the environment. You can use sustainable elements in your packaging such as biodegradable and compostable packaging from companies like U-Line.
Establish the right shipping methods for your business
From overnight to free shipping and everything in between, customers want the freedom to select the shipping method that fits their needs. It’s best practice to offer a variety of shipping methods so customers can pick what’s right for them each time. Consider which of the following shipping methods you’d like to offer when shaping your e-commerce delivery strategy:
- Free ship-to-store or curbside pick-up: A practical option if you have a brick-and-mortar location. Not only can customers pick up parcels on their own schedule, but you and your customer can avoid paying for shipping.
- Free shipping: Offering free shipping is so compelling that 79% of people are more likely to shop when it’s offered.
- Same-day delivery: Guarantees that orders will be delivered on the same day it’s purchased. If you need a contingency plan for time-sensitive goods, Mission Critical shipping is available.
- Evening and overnight options: Provide after-hour shipping options such as our Express by 9 am or evening delivery options to ensure customers receive their orders quickly.
- Two-day shipping: Thanks to e-commerce powerhouses, two-day shipping has become so highly requested that 42% of shoppers expect it as an option for every online purchase.
- Flat rate: This is defined as charging customers the same flat rate for shipping, regardless of the product purchased or order value.
- International shipping: For businesses with an international audience, it’s essential to work with experienced fulfillment partners who can help you navigate regulations, tariffs, taxes and other international shipping requirements.
Cross-border international shipping considerations
Selling products internationally can be enticing because your business can reach a greater audience, generate more sales and increase brand visibility. Before leaping into the international market, consider the following in your cross-border e-commerce logistics strategy:
- Is there demand for your products in the target market?
- Can your products be safely shipped internationally?
- Are you informed about your target market’s tariffs, taxes and duties?
- Are you familiar with the customs clearance process?
- Does your shipping partner provide cross-border e-commerce logistics and shipping services within the U.S. and Canada?
Are you ready to export from Canada to the U.S.? Read our article for more tips.
If you answered “yes” to some or all of the questions above, the next step is becoming familiar with the rules and regulations for the countries you want to expand to. The rules and regulations you’ll need to familiarize yourself include:
- Customs declaration and forms: These forms tell customs officers what’s in the shipment, how much it costs and whether it is a merchandise or gift.
- Tariffs, taxes and duties: Additional customs fees may apply when a package reaches its destination, which the customer is responsible to pay. In these instances, make sure you include this information on your shipping policy web page so customers don’t get surprised by unexpected fees.
Provide shipping labels and clear insurance policies
To ensure your customers have a great shipping experience, provide accurate shipping labels and shipping insurance policies:
- Shipping labels: Labels provide shipping carriers with essential information about the origin and designation of the shipment. Without labels, orders could be mishandled, delayed or lost, negatively impacting your customer experience.
- Shipping insurance: With this policy, senders can be reimbursed if parcels are lost, damaged or stolen in transit.
Create a complete order tracking, return policy, exchange and fulfillment system
Even after your carrier picks up an order from your store or warehouse the shipping process doesn’t end. Your shipping strategy needs to include a great tracking and returns process. Nailing the returns experience is crucial because 95% of shoppers who are happy with a return process will purchase from the same retailer again, while customers who had a bad returns experience are three times more likely to abandon the retailer.
Clearly share tracking, exchange and return policies when shoppers are placing an order:
- Tracking packages: It’s important that you and your customers know where packages are at all times. Ensure that you can provide customers with a tracking number so they can follow their shipment’s journey.
- Exchange policy: Ensure that customers can understand how to make exchanges, what the exchange deadline is and if there are any costs for making exchanges.
- Simple package return policy: It’s essential to have a streamlined return policy that leaves customers satisfied. Just like with an exchange policy, be sure to detail the return window and any return fees prominently at your store or on your website.
- Terms and Conditions: Be sure to include terms and conditions that can cover weather conditions, holiday season rushes and supply chain issues.
How to offer free shipping and boost revenues
Our research found that free shipping is so compelling of an offer that 62.5% of customers cite it as the most important positive influence on their satisfaction. However, free shipping isn’t a viable option for all businesses. Before offering free shipping, you need to make sure that your margins are high enough to cover your shipping costs.
To make free shipping work for your business you have several options:
- Increase product prices to cover shipping costs
- Offer a discount code to certain customers for free shipping, such as a limited-time promotion code to new email newsletter subscribers
- Provide free shipping on a minimum order amount, such as enabling free shipping while spending over $49 and above
- Offer free shipping during peak sales periods
- Offer free shipping as a customer loyalty program perk
- Only offer free shipping in specific regions
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The call for eco-friendly sustainable shipping practices
E-commerce shipping and packaging contributes to a concerning amount of emissions and waste. The shipping industry is responsible for about 940 million tonnes of CO2 annually and 86 million tons of plastic packaging is produced globally each year.
To counteract this waste, customers are using their purchasing power to support companies that incorporate sustainability into their business. To add sustainable measures to your shipping practice and support a circular economy, you can:
- Use eco-friendly biodegradable packaging
- Reduce void space in boxed shipments
- Use eco-friendly shipping options such as low-speed vehicles and e-bikes
- Use alternative delivery methods like parcel lockers and Quick Stop Kiosks
- Browse for ground shipping options
- Ship in bulk
Transactional email best practices for incredible ROI
Turn subscribers into buyers with emails that help set expectations around deliveries while communicating important information. To support your shipping strategy, incorporate the following best practices into your communications strategy:
- Set goals: Whether it’s boosting sales or keeping in touch with customers, create a goal for every email.
- Automate your campaign: From welcome emails to abandoned cart emails, deliver the right emails at the optimal time in accordance with the customer’s lifecycle with automated emails.
- Suggest alternatives for out-of-stock products: Send customers suggestions for your sold-out products that they’ll enjoy to encourage conversions.
- Encourage consumers to shop early to avoid out–of–stock items: Keep customers in the know of what products are likely to sell out early so they can stay ahead of the curve.
- Make emails skimmable: Write short paragraphs, add headlines, use bullets to break up content, bold important information, incorporate eye-catching graphics and use call-to-action (CTA) buttons.
- Use a welcome series: With an 86% open rate, these emails are a great way to tell your subscribers about your brand, share your best content and offer promotions.
- Create abandoned cart emails: By reminding shoppers of what they left behind in their carts, businesses using abandoned cart emails can earn up to 14% of lost sales.
- Promotional emails: From giving offers on a particular product, a sitewide discount or free shipping, these emails are perfect for savings-conscious customers, especially while holiday season shopping. Free shipping is so appealing of a promotion that 79% of people are more likely to shop online with it.
- Order confirmation: After customers make an order, summarize their purchase and contact details.
- Tracking details: Provide customers with peace of mind by sharing their order tracking number and partnering with a shipping provider that offers customized delivery preferences for your customers.
- Encourage reviews: As 88% of customers trust user reviews as much as personal recommendations, this social proof demonstrates the trust shoppers have in your business.
After reading our checklist, are you ready to take your shipping strategy to the next level? You can lower your shipping costs and delivery times with the right tactics while increasing customer satisfaction. To elevate your shipping practice further, team up with a reliable logistics partner.
From next-day delivery service to sustainable e-bike delivery, when you work with Purolator you can benefit from flexible and customized e-commerce logistics solutions for all of your shipping needs. With Purolator’s expansive reach serving up to 99.9% of Canadian postal codes, plus cross-border capabilities, multi-modal transportation, courier and freight solutions and multiple e-commerce integration partners, we’ll help keep your customers satisfied with every purchase.