Author: Zach Warrick
Boost Shipping and Returns to Compete with the Amazon Effect
Author: Evelyn McCarter
The Amazon Effect on Shipping and Returns
Amazon continues to shift consumer expectations for all retail shopping via what many call the “Amazon effect”. The digital-first marketplace’s business model redefines consumer patterns and expectations with fast, free shipping and returns. Now customers expect the same shopping, shipping, and delivery experience from other retailers. To keep up, online retailers must accelerate their logistics support to meet customer expectations throughout the entire purchase process. From the first click to doorstep delivery, retailers must remove friction and streamline operations.
With this in mind, let’s look at two ways e-Commerce retailers can compete with the Amazon effect and keep their customers happy: fast, free shipping, and easy returns.
Fast, Free Shipping
Fast, Free Shipping Doesn’t Have to be Intimidating
Amazon is famous for its fast, free shipping. Thanks to this offering, many shoppers now expect all online purchases to arrive fast and free, with up to 75% of U.S. consumers expecting free shipping on any order, according to the National Retail Federation.
For many e-Commerce merchants, the idea of offering fast, free shipping is intimidating. It poses its own set of logistical challenges. However, “fast and free” is not necessarily a bad thing for retailers. While offering fast, free shipping may detract from a seller’s profit margins, it will increase profit overall with a higher volume of orders. Additionally, fast, free shipping is a powerful way to attract and retain customers. Up to 84% of customers specifically purchase because shipping is free.
Consider Curbside Pickup
Another element of competitive delivery that is now prevalent is a curbside pickup or “Buy Online, Pick-Up in Store” (BOPIS) model. Curbside pickup heavily increased due to the pandemic, with 75% of shoppers using it, and it’s here to stay. Customers are willing to pick up curbside or in-store to avoid delivery fees and ensure fast delivery. Over 50% of large retail chains now offer curbside pickup, which further suggests curbside pickup is becoming a crucial component of the omnichannel retail landscape.
Curbside pickup draws customers into the store, where conversion rates are higher. For example, while the online conversion rate for fashion retailers is 2-3%, store conversion rates can be as high as 30%. If shoppers choose to pick up their items in-store, they may see other appealing products. Ultimately, this increases shopping cart sizes.
Retailers pursuing omnichannel fulfillment do benefit from curbside pickup. The brick-and-mortar locations can serve as ship-from-store locations to complement warehouses. This method improves delivery speed and cost savings.
The key to fast, free shipping, as well as curbside delivery, is to leverage the right technology. An Order Management System (OMS) helps ensure a streamlined omnichannel fulfillment process. Advanced OMS technology supports complex order management, helping retailers establish a rules-based approach to fulfill both online and in-store orders.
This way, retailers can choose the most logical place from which to ship orders. Many retailers who start an omnichannel shipping strategy tend to ship from the closest location to the customer. However, experienced omnichannel retailers also consider location risk for inventory markdown, differences in cost of labor, staff availability, and more. An OMS is the best way to automate such decision-making and ensure effective fulfillment.
Explore Effective Returns Management
As with fast, free shipping, Amazon has set the bar with its easy process. Their returns process is fast, easy, and often free to return most items. The brand emphasizes convenience and does not charge for returns. Making returns free is a wise choice, as 67% of customers are deterred from making future purchases if they must pay free for returns or restocking. In fact, 96% of customers intend to repurchase from a retailer if they offer an “easy” or “very easy” returns experience. Implementing easy, free returns management is key for e-Commerce merchants to compete and stand out from the crowd.
Communication is essential for good returns management. Amazon communicates with the customer throughout the returns process in the same way they do when fulfilling the initial order. During the returns process, you should provide tracking information and updates to your customers. Rearticulate the shipping policy details, like when the customer can expect to receive their refund.
Merchants do not have to lose out in the returns process. Try to transform the return into a future satisfactory purchase. Offer the customer alternative colors, sizes, accessories, or versions of what they initially purchased. Use return data to provide better alternative options. This can boost long-term customer loyalty.
Find the Right Carrier Partnerships
Finding the right carrier partners is critical for successful returns management. Consider your current carrier network and determine what partner support is required to both successfully meet customer expectations and speed the returns process. The more rapidly partners can manage returns on your behalf, the faster you can reclaim value from the returned inventory.
As you work with carrier partners, pay attention to the data to determine if there are new approaches you can take to improve returns. For example, if goods are shipped to the East Coast, find ways to store returned inventory regionally to resell to the same region.
Peak shopping season is just around the corner, and now is the time to prepare. To remain competitive, and compete with major marketplaces like Amazon, e-Commerce merchants must pursue optimal shipping and returns management strategies to support their business and customers. Focus on improving shipping and returns to meet evolving customer demands.
How GEODIS Can Help
Navigating complex supply chains requires expertise and adequate resources, and GEODIS is here to help. We deliver exceptional value by improving supply chain efficiency, profitability, and customer satisfaction across the supply chain via our contract logistics, transportation, and freight forwarding services.
To find out how GEODIS can help you realize these goals, schedule a call with us today.