In recent years, buying behaviour has changed drastically, with retail ecommerce occupying a larger portion of the market, presenting a crucial opportunity for businesses. Canada’s e-commerce users in 2022 accounted for 75% of the population, totalling 27 million people. In 2021 alone, worldwide ecommerce sales were 7.9 trillion CAD dollars. This amount is projected to grow by 56%, resulting in global ecommerce sales reaching 10.1 trillion CAD dollars by 2027.
Retail ecommerce comes with many benefits for B2B and B2C businesses, including increased scalability, reduced costs, faster buying cycle, widened reach, and greater opportunities for innovation. One of the most crucial components of retail ecommerce success is optimizing your shipping strategy, which directly impacts customer loyalty, ROI, market growth, sustainability, and more.
Here are the top trends and best practices for leveraging retail ecommerce for your business, including how to create an effective ecommerce shipping and returns strategy.
- What is retail ecommerce?
- What is the retail model in ecommerce?
- Retail vs ecommerce: The key differences
- Why is ecommerce growing?
- Is retail ecommerce right for your business?
- What is an omnichannel approach to ecommerce?
- How to transition to ecommerce
- 6 Current trends in ecommerce to boost your revenue
- 10 Key retail ecommerce shipping strategies
- How to reduce your retail ecommerce shipping costs
- How to streamline your shipping process for ecommerce
- How to create a sustainable ecommerce return strategy
What is retail ecommerce?
Ecommerce is a form of retail where goods or services are bought and sold online. Ecommerce has reduced overhead, more competitive pricing, and a shorter supply chain. For customers, ecommerce offers more convenient, varied channels for shopping internationally and better customer service.
What is the retail model in ecommerce?
The most common and most effective ecommerce retail models are the B2C and B2B retail models.
What is the Business to Consumer (B2C) ecommerce retail model?
This is the online sale of goods and services between a business and a consumer. Nurturing positive customer relationships is key to B2C success. Examples include subscription services and marketplaces.
What is the Business to Business (B2B) ecommerce retail model?
This is the online sale of one business’s goods and services to another business. The buying cycle may involve several steps and different stakeholders. Examples include branded swag retailers and software distributors.
For more information, download our guide, Omnichannel 101: Master Your Retail Omnichannel Strategy With Your Delivery Provider.
What is dropshipping?
With dropshipping, companies use third parties to transport and store their goods. It’s low risk and doesn’t require inventory maintenance.
Benefits of dropshipping include:
- Increased flexibility
- Greater scalability
- Low overhead
- Easy setup
- Reduced risk
What is D2C (Direct to Consumer) ecommerce?
D2C removes intermediaries and avoids the typical supply chain model, giving companies direct control over their business by selling directly to their consumers. D2C may use channels like social media and focus more on advertising to attract customers.
Benefits of D2C include:
- More control over marketing, brand, and customer engagement
- Increased profit margins, opportunities, and innovation
- Improved customer insights from data
- Faster go-to-market cycle
- Better customer relationships and brand loyalty
The Key Differences, Advantages, and Disadvantages of Ecommerce and Retail
Key Traits, Advantages, and Disadvantages of Retail
Retail refers to the sale of goods or services through a brick and mortar store and a point-of-sale (POS) system. In-person retail has a longer supply chain and is the more traditional model.
Advantages for Retail
- Tangible experiences. Customers can interact with products like testing out equipment.
- Boost sales with displays. Eye-catching displays can promote new items and discounts.
- Fewer shipping expenses. With customers visiting your store, see reduced costs with minimized shipping expenses.
- Strengthen customer loyalty. Engage customers with memorable experiences and welcoming store aesthetics.
- Instant gratification. Customers get to receive and use their purchases right away.
- Increased potential for sales. With multiple items in one place, customers are more likely to buy more, even when they have the intention of a single purchase.
Disadvantages of Retail
- Higher operation investment. This includes rent, utilities, technology investment, employee expenses, and more.
- Some restrictions on customer base and growth. Depending on business size, reach is limited to who comes into stores and lives locally.
- Hiring in-store employees. This includes wages, benefits, training, as well as maintaining a good customer to employee ratio to meet demand.
Key Traits, Advantages, and Disadvantages of Ecommerce
Ecommerce refers to the sale of goods and services online via a web store, social media, apps, or other channels. As mentioned, it has a shorter supply chain than in-person retail and is becoming a more popular form of retail.
Advantages of Ecommerce:
- Wider customer base. Customers aren’t restricted to a physical location, and have the potential to be worldwide.
- Reduced overhead. Money can be reallocated to shipping, packaging, marketing, and more.
- Lower set-up investment. Creating an online store is affordable, and extra funds can be reinvested into the business.
- Offer better competitive pricing. Data analytics give businesses a clear picture on consumer behaviour and direct competitors to create better competitive pricing.
- More product selection. Unrestricted by a physical space means the potential to offer a wider range of products and opportunity for more innovation.
- Quicker buying process. Shopping isn’t restricted to hours of operation, so customers can purchase at any time, from anywhere.
- Cost-effective marketing and advertising. It also has increased strategic impact through audience targeting and data tracking.
- Increased shipping options. With an omnichannel approach, businesses can offer multiple pick up options like in-store pickup, ship to store, ship to home, curbside pickup, and more.
Disadvantages of ecommerce:
- More competitive. To stay ahead, businesses need to invest in maintaining and building strong customer loyalty, active competitor analysis, and innovating products.
- Technological interference. This can include cybersecurity, poor customer UX, lack of personalization, limited payment options, and more.
- Shipping challenges. The right shipping partner can help you anticipate and avoid challenges like congested shipping routes, damaged goods, and cross-border regulations.
Why is Ecommerce Growing?
The rise of smartphones, internet accessibility, online payment services, and social media shopping have changed buying behaviour and sparked a boom in retail ecommerce. According to Forbes, Gen-Z and Millennials now have the largest amount of buying power in the US, and are driven primarily by convenience in their shopping, which has contributed to the popularity of ecommerce. This presents opportunities for businesses looking to grow and streamline their ecommerce or omnichannel approach.
The Growth of Mobile Ecommerce
According to Dynamic Yield, 76% of consumers are shopping on mobile devices. The rise of mobile ecommerce means to increase sales and customer retention, businesses need to improve mobile ecommerce UX by addressing the top mobile ecommerce concerns for consumers:
- Mobile-first design (size and readability)
- Smoother navigation
- Streamlined, secure checkouts
(Source: Dynamic Yield)
Prioritizing these factors means seeing an impact on the number of multiple sales and opportunities for shipment consolidation, which brings higher ROI in ecommerce for businesses.
What is an omnichannel approach to ecommerce?
An omnichannel approach can be an effective retail ecommerce strategy, as it offers both brick and mortar and web stores to customers and integrates all business operations, such as marketing, branding, customer experience, and advertising, across in-person and online channels. This creates a consistent and holistic experience for customers regardless of how they access the business.
How to take advantage of an omnichannel approach
Your business can make the most of an omnichannel approach by:
- Leveraging offline channels like in-store and curbside pickup
- Taking advantage of online opportunities to push sales, enhance brand, and increase marketing impact
- Choosing the right omnichannel shipping partner that can anticipate and innovate your business
- Creating personalized shopping experiences with:
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- Data driven insights
- Personalized offers and online storefronts
- Loyalty programs
- Flexible and convenient shipping and returns
For more information, here’s how to master your retail omnichannel strategy with your delivery provider.
Benefits of an omnichannel approach
- Higher customer satisfaction. Customers get convenience and consistency that helps support easy buying decisions, stronger customer relationships, brand loyalty, and more.
- Better customer experience. Customers can interact with your business through multiple channels, which means convenient customer support and personalization that drives sales.
- Widened reach. This translates to a wider customer base, improved accessibility, increased market opportunity and potential for growth and innovation.
- Higher sales and conversions. An omnichannel approach increases customer retention and loyalty, which means repeat sales and increased conversions.
- Better inventory turnover. With more sales, there’s higher turnover of your inventory, which drives greater demand, revenue, and increases opportunity for new products and business expansion.
How to transition to ecommerce
Whether you are looking to shift your business from brick and mortar to online, or are interested in an omnichannel approach, here’s how to add ecommerce to your business strategy.
The Key Steps in Transitioning to Retail Ecommerce
Transitioning into retail ecommerce requires a strong foundation to maximize business impact. Here’s how to get started.
1.Understand your target market and the impact of online sales in your industry
Examine your niche and how online sales impact growth in your industry by asking yourself questions like:
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- Who are your competitors and how do their customers interact with these businesses online?
- How do these businesses engage and nurture customers?
- What are your customers’ preferred modes of payment?
- What social platforms do they frequent?
2. Formulate your ecommerce business plan
Use the information gathered from your market research to create a business plan. Include elements such as:
- Executive summary
- Business overview
- Market analysis
- Description of products and services
- Marketing strategy (channels, tactics, goals and KPIs)
- Financial plan (revenue projections, costs and pricing, expenses, budgets, etc).
3. Create your online storefront
Choose a platform with secure payment processing services that are PCI and SSL compliant. SEO-optimize your copy, test and iterate your online store on all devices before you go-live, and create opportunities for customer engagement like a newsletter signup for exclusive discounts.
4. Simplify checkout process
- Removing unnecessary steps and information requests
- Offer multiple payment options like installment payments and credit card
- Allow customers to save their cart for later purchase
- Optimize for mobile with design layout, easy-to-use buttons and white space
- Add ease to shipping and returns with a variety of options and instructions for each
To learn more ways you can maximize on your checkout completion and drive more business, check out our 10 ways to simplify your online checkout process to boost UX and sales.
5. Build your shipping and return strategy
Create a shipping and return policy that considers the varied locations of your customer base. Communicate shipping options and services as well as restrictions and considerations. Finally, choose a shipping partner that has the reach and expertise your business needs. This includes how to build a reverse logistics strategy that prioritizes sustainability and minimizes your shipping investment.
10 Key Retail Ecommerce Shipping Strategies
A robust ecommerce shipping strategy is essential for your success. Here’s what to keep in mind:
1. Build free shipping into your pricing
Customers are more likely to purchase when you offer free shipping and can be accounted for in your pricing. Here are 8 ways to make free shipping work for your business.
2. Increase average order value
Encourage purchase completion through urgency (eg only X left in stock, recent purchase notification popup, X people looking at it now) to reduce your overall shipping costs via frequent shipper discounts offered by shipping logistics partners.
3. Include real-time carrier rates
Real-time carrier rates give customers an exact price for shipping once they check out and is a top priority for global online shoppers. It helps your business meet customer expectations, establish trust, and improve brand loyalty.
4. Offer flat rate shipping
This eliminates price jumps as a result of factors like seasonality and distance of shipment. Flat rate shipping also increases sales through transparency and reduces price shock at checkout that result in discarded carts and incomplete purchases.
5. Offer free local pickup or delivery
Free local pickup or delivery boosts sales and encourages customers to shop in either greater quantities or more often because of its convenience, while saving money for your business and customers.
6. Use a trusted shipping partner with a wide network
Purolator offers 100% Canadian coverage, which means your customers can shop from anywhere, including more rural locations and receive their deliveries in a timely manner. Look for a shipping partner with a wide network and expertise that advances your business, including support for returns management, and multiple access points for customer pickup and drop-off.
7. Look for opportunities to reduce shipping costs
Affordable shipping influences customer satisfaction, brand loyalty, and purchase completion. Opportunities to save on shipping costs include reducing air space, packaging size, and choosing the right shipping partner. At Purolator, we offer multiple, flexible shipping options to ensure you have the best rates for your needs.
8. Transparent order tracking and communication
Transparent order tracking and communication drives customer loyalty, establishes trust, and encourages repeat purchases. It reduces cart abandonment, which impacts your revenue and business.
9. Plan ahead for international shipping. Check international shipping rates and factor this into your shipping budget. Take advantage of local shipping and drop shipping as well as loyalty programs and discounts offered by shipping carriers.
10. Understand customs clearance process. Familiarize yourself with associated duties and fees and check regulations and restrictions with your products and available shipping destinations. Work with a shipping partner who can guide you and support you in international or cross-border shipments.
How to Reduce Your Retail Ecommerce Shipping Costs
Strategic shipping minimizes unnecessary expenses, giving your business the financial leeway to reinvest in growth. Here are the top 8 strategies for reducing your retail ecommerce shipping costs.
1.Offer a range of shipping options. Create a variety of shipping rates for your consumers that take into consideration:
- Variety. Offer multiple flexible shipping options for different budgets, needs, and locations.
- Expedited rates. Include increased rates for expedited shipping, so you don’t have to absorb those costs.
- Speed. Use ground service for non-urgent shipments and offer next day shipping 7-days a week.
- Customer expectations. Offer transparent communication about how long it will take for shipments to get to customers as well as alerts while the package is on its way.
2.Sign up for business rewards. For example, Purolator’s SMB reward program helps you save on shipping as your business grows.
3.Use the right size of packaging. Make sure it’s as close to the size of the product as possible, and use pre-approved packaging from your shipping partner to access packaging discounts. To learn how to better package your items to reduce costs, environmental impact and reduce risks of damages, check out this article.
4.Reduce your package weight. Get access to more affordable rates. Reducing your package weight by using:
- The right, durable carton size
- Efficient item arrangement with nesting and stacking
- Lightweight and/or custom packaging
- Innovative packing materials like polybags and mailers
- Consolidate shipments as much as possible
5.Package for protection. Ensure your products get to their destination safely with packaging tips like:
- Protective material
- H-taping method
- Durable packaging
- Reducing extra air space
6.Consolidate your orders. Place a customer’s items from different orders in one shipment, rather than separately. Order consolidation improves customer satisfaction and sustainability. Learn more about sustainable business practices here. You can also boost revenue by encouraging shoppers to add more items to their cart to receive free shipping and allows you to consolidate orders.
7. Plan ahead for the holidays. Create a holiday strategy that avoids overpaying for expedited shipments and passes extra expenses to customers, while making use of transparent tracking and customizable deliveries.
How to create a sustainable ecommerce return strategy
The rise of ecommerce has also resulted in a larger environmental impact. With ethical consumerism at an all-time high, businesses can benefit from more environmental practices through decreased costs, improved productivity, tax benefits, and increased competitive advantage and brand appeal.
Returns are one of the crucial opportunities in increasing sustainability. In 2021 in the US alone, a fifth of online purchases were returned, with a quarter of returns discarded into landfills.
Here are some key ecommerce returns solutions to reduce your business’s environmental impact.
1) Understand how to improve your product. Returns can be a signal of what to improve in your product to reduce the number of returns and increase customer satisfaction.
2) Pack your products properly. Using wrong packaging increases the risks of damage during transit and leads to excess waste. To optimize, use recommended packaging from your shipping partner. Here are 3 eco-friendly packaging best practices to make your business more sustainable.
3) Use resealable and reusable eco-friendly packaging. Make it easy for your consumer to reuse shipping packaging for returns and notify recipients of this option on the packing slip or packaging.
4) Minimize the amount of unnecessary extras. Reconsider adding paper products (product care instructions, business card, discount card) and digitize where possible.
5) Incorporate product recycling/reuse into your business model. Reuse returned materials into new products where possible, dispose of returned items properly, and/or create a resale offshoot of your company so there is zero disposal of your products.
6) Use effective reverse logistics processes. Create an easy and seamless return process, including offering multiple return locations. Inspect and sort returns quickly and thoroughly to determine if it can be reused, recycled, repaired or needs to be disposed of.
7) Partner with a sustainable shipping provider. Use a shipping partner that offers environmentally friendly shipping options like electric vehicles, e-bikes and more.
6 Current Trends in Ecommerce to Boost Your Revenue
Here are the top 6 ecommerce trends your business can take advantage of.
1. Contextual Ads
On the rise in response to privacy concerns, contextual ads appear on a specific website or location to target potential customers, rather than in response to individual online behaviour. According to Global Industry Analysts, the global contextual advertising market is projected to reach $562.1 billion by 2030.
2. Artificial intelligence (AI) and On-site Personalization
Customized customer experiences help minimize consumer fatigue caused by heightened availability and choice. According to McKinsey & Company, 71% of consumers expect personalization from companies. Companies with greater growth drive 40% more revenue from personalization.
3. Advanced shipping options and technology
Ecommerce shipping logistics are changing with new customer expectations and technological advancements to address top priorities for global shoppers like speed, pricing, and delivery time. These innovations include:
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- Local drop points
- Real-time tracking
- Eco-friendly logistics
- Automated and locally placed warehousing
- Customized delivery options
- System integration for seamless logistics
- Rural ecommerce and logistics
Take advantage of this opportunity with a shipping partner with technology solutions that help your business better meet customer expectations and gain competitive advantage.
4. Mobile ecommerce
According to eMarketer Insider Intelligence, mobile devices are likely to become the preferred channel in the next 5 years, with mobile ecommerce sales accounting for 40% of ecommerce sales in 2024.
5. Voice search
More than 1 in 4 people worldwide are using voice search on their mobile devices to find products and services. Optimize for voice search through search engine optimization (SEO) strategies and practices that incorporate conversational search queries.
6. Sustainability
Sustainable business practices and packaging has been shown to increase consumer brand loyalty. According to NielsenIQ, 73% of consumers are ready to change their consumption habits to minimize environmental impact.
Innovating Your Business for the Future with Ecommerce
Signals in buying behaviour show that the shift towards ecommerce and the popularity of mobile ecommerce are only going to grow. Companies looking to the future need to prioritize and evaluate their retail ecommerce business and their shipping strategy.
As one of the biggest components in ecommerce success, shipping helps drive revenue, customer loyalty, and worldwide impact. Leveraging the right shipping partner like Purolator gives you access to multiple convenient shipping and pickup locations such as parcel lockers, Mobile Quick Stop (MQS) trucks, and retail locations, shipping partners as well as the efficient and reliable service, and innovative expertise that gives you the competitive advantage to attract and convert customers, stand out in the market, and orient your business towards long-term growth.