Picture this: Your customer places their order, and then sits back in happy anticipation of their order arriving by the date you’ve given. But then the date passes. And the day after.
It’s safe to say that this one of the worst-case scenarios in ecommerce. Customers expect retailers to meet their delivery promises. When they don’t, this can seriously affect their relationship with a brand – and might cause them to shop elsewhere in the future.
For this reason, merchants need to do everything they can to avoid late deliveries that cause customer churn and damage to their reputation.
This topic is going to be divided across two posts. In Part One (this post) we’re going to cover the main causes of shipping delays and what you can do to combat them. In Part Two, we’ll explore the best ways to manage customer expectations when shipping delays do occur – despite your best effort to avoid them!
It’s no secret that the COVID-19 pandemic has put unprecedented pressure on supply chains and carrier networks – at a time when consumers have bigger expectations than ever for two-day and even same-day delivery methods. In the second quarter of 2020, there was huge disruption as ecommerce sales surged and carriers found themselves having to manage volumes that exceeded holiday season peaks.
So, how has the pandemic impacted delivery performance?
According to Digital Commerce 360, the performance of all major carriers experienced a significant dip in April 2020, with USPS sitting at 89.3%, UPS at 86.0%, and FedEx at 81.7%. This is compared with the 90% or higher for on-time delivery seen at the start of March.
However, this picture was quite different by the time we reached the 2020 holiday season. Despite dire predictions of massive delays as carriers grappled with the peak of an already record-breaking year, major carriers exceeded on-time delivery rates compared with 2019. According to ShipMatrix, all three carriers saw on-time delivery rates in the 90% range – some of the highest on record for the last quarter of the year.
So, what does this turnaround tell us? That through a combination of measures, including surcharges, extra seasonal labor, and volume caps, carriers were able to limit delays and improve customer satisfaction.
By looking at the root causes of shipping delays and how they can be alleviated, retailers can also take proactive steps to prevent late deliveries. And as you’ll find out in the next section, it’s pretty imperative that you do.
Late deliveries are more than just an inconvenience; they’re highly detrimental to your reputation as a retailer. Why? Because in an age where instant gratification has become normalized, shipping delays are one of the biggest sources of friction in the post-purchase experience.
A study by Voxware found that 69% of customers are much less likely to shop with a retailer again if their order isn’t delivered within two days of the arrival date given. So, when the number of late deliveries increases, your customer retention rate takes a companion nosedive – as well as the ROI it took to acquire customers in the first place.
While this statistic reveals that there’s a bit of leeway for retailers, this is by no means something to take liberties with. When Amazon is continuing to push the envelope by making even same-day delivery the norm, there’s less and less margin for error.
It’s hard to prevent late deliveries if you don’t have any insight into why they happen. Shipping delays often come down to a mixture of factors, some of which are under your control – and some that aren’t. But by having a plan prepared in response to the most common scenarios for late deliveries, you’ll be much better positioned to respond effectively and ease customer concerns.
This won’t come as a surprise to any retailer; when the holiday season rolls around, small parcel volumes inevitably increase as consumers hit up online retailers in massive numbers.
Of course, this doesn’t only happen during the holiday season; any sudden increase in order volumes has the potential a overwhelm a fulfillment operation – especially if it’s an unexpected situation like the COVID-19 pandemic, where staffing levels can’t be adjusted in preparation. Due to peak season surcharges, shipping costs also become more expensive, which leads many retailers to opt for economy shipping options that take much longer to reach the end customer.
Solution: A lot of managing order peaks comes down to good business planning. If you’re a newly-launched brand, you should have several contingency plans in place for handling the different levels of growth you may experience over the next 1-2 years. Partnering with an ecommerce fulfillment provider will help you in this regard, in addition to accessing more favorable shipping rates for those expected and unexpected peaks.
For those engaging in cross-border fulfillment, each market has different sets of rules and regulations for selling and shipping that you need to abide by. To make matters worse, this can often change at very short notice (as the post-Brexit United Kingdom can attest to). If you don’t dot the I’s and cross the t’s correctly on the paperwork, you could be looking at orders spending days or even weeks stuck in a custom’s office.
Solution: If you’re going to ship orders internationally, it’s vital that you understand the requirements and what paperwork is needed to avoid necessary delays. Opening up to international customers can mean making some big changes to your fulfillment operation, so it’s a good idea to open up shipping capabilities slowly to significant customer hubs, rather than adding a variety of locations all at the same time.
There’s no big scientific reason behind this one; humans are not infallible and often make mistakes, especially when we’re engaged in repetitive tasks or are trying to juggle multiple responsibilities at once. Whether it’s an address that’s been inputted incorrectly into an OMS or a typo in an SKU, even minor errors can result in lengthy delays to orders being fulfilled or delivered.
Solution: Investing in integrated OMS and WMS systems means that orders are transferred directly from your ecommerce website to your warehouse. This removes lengthy, manual processes from the fulfillment process that are easily prone to error. However, it’s still a good idea to have your staff re-read order confirmations or have another team member check to ensure that everything is correct.
Bad weather is one of the biggest barriers to getting orders delivered on time. Whether it’s heavy rain, snowstorms, or severe fog, there’s a myriad of different ways that delivery trucks can become grounded or slowed down, especially in regions like the Southeast which are prone to tropical storms at certain times of the year. Adverse weather events can throw off delivery timetables by as much as several days, especially if there are road closures or severe damage to infrastructure.
Solution: While some events such as earthquakes occur with literally no warning, others can be predicted according to advance weather forecasts. If delays are predicted, see if there are ways to reroute deliveries out of risky areas or plan alternative shipping timetables to avoid the worst of the disruption. One of the best strategies to pre-empt delivery issues is to notify your customers of potential delays as they happen. This allows customers to make an informed decision about whether or not to place an order.
The ‘last mile problem’ presents many inefficiencies that are difficult for retailers to streamline. This often results in massive bottlenecks that add considerable time to the delivery process. This is because it’s challenging to create an economy of scale approach when each order requires a tailored transportation route and delivery method. Furthermore, there’s also the possibility of a failed delivery attempt which can add days onto the final delivery time.
Solution: Investing in route optimization software and real-time order tracking are two of the best ways to eliminate last mile delivery issues. Route optimization helps to prevent wasted driving and idling time by planning the most efficient delivery routes for the orders in your truck, while order tracking is a valuable tool for helping customers ensure that they’re in the right place at the right time to receive their order.
When it comes to delivery timeframes, it’s often best for retailers to under-promise and over-deliver. Because no matter what contingencies you put in place, there’s always the chance of the unexpected happening and adding days onto your parcel delivery. It’s far better for customers to be surprised and delighted by ‘early’ delivery than it is for them to be frustrated by their order’s late arrival.
So, if late delivery is going to affect your customer (despite your best efforts) what is the best way to navigate this potentially awkward situation? Keep an eye out for Part Two on this topic, where we will be discussing our top tips for managing shipping delays and alleviating customer frustration. Because if this is done well, you can transform a case of customer attrition into an opportunity for fostering lasting brand loyalty. Watch this space!