This is Part 1 of a two-part series by our trusted tech partner, eShipper, an online platform that allows businesses to integrate, automate and save on shipping. Part 1 focuses on planning and preparing your shipping and fulfillment strategy for the holiday season and Part 2 dives into some actionable tips and tricks!
Part 1: Planning your holiday shipping and fulfillment strategy
With the holiday season around the corner, consumers are bracing for sales and are prepared to spend. For retailers, holiday sales represent an average of 20% of their annual revenue. Last year, U.S. holiday sales totaled nearly $1 trillion for the first time in history. Consumers spent $874 billion offline and $123 billion online, making it an all-time high.
With so many sales opportunities lying just weeks ahead, now is the time to fine-tune your strategy and make this season your most profitable to date. Sales and marketing should be your primary focus during the season, while your shipping & fulfillment strategy should already be in place working seamlessly in the background.
Not there yet? Don’t worry. I’ve created this guide to get you up to speed with exactly how to map out your e-commerce shipping and fulfillment strategy for holiday sales.
When to start planning your holiday shipping and fulfillment strategy
Most businesses start planning their holiday shipping strategy in September, giving them enough time to map out the buyer journey. Sales start steadily increasing from the first weekend of October, and most consumers don’t wait until Black Friday to start shopping. Even though the earlier you plan the better, it’s still not too late to catch up.
Start by using sales patterns and spikes from last year to give you an indication of how much inventory to plan for. Make sure you have enough staff to fulfill your orders, or outsource your operations to an e-commerce fulfillment center. Take advantage of this season to offer free shipping, and make sure your returns strategy is on point.
- Implement free shipping on returns. This way, your customers will feel safer buying your product knowing they won’t be charged if it arrives and isn’t what they expected.
- Make your returns policy visible and easy to find. If a customer has to search through the fine print to find it, you’re risking the chance of losing them.
- The same goes for long, drawn-out returns policies that are overbearing and confusing. Keep it simple, concise, and clear.
- If returns aren’t possible due to the type of product you’re selling, consider offering store credit for dissatisfied customers. This will go a long way in increasing customer satisfaction and brand loyalty.
Identify shopper behavior
To build your ideal audience profile, figure out what gets their attention, their preferred time to buy, and their demographic trends.
Use heatmap tools like Hotjar or CrazyEgg to find out exactly what your customer is doing on your site. Verify whether they’re buying on impulse, or carefully considering their decision before making a purchase. Are they abandoning the cart when they get to the shipping page? That might be an indication that you need to rethink your shipping strategy.
Refine your strategy
Do you have a younger demographic? 54% of US consumers under the age of 25 said that same-day shipping is their number one purchase driver. If you’re not selling on Amazon, choose carriers like FedEx and UPS who generally ship out products quickly and effectively. Or use a shipping partner that offers Prime-like shipping options with added customer service perks.
Make your shipping time clear at checkout, not just in your FAQ. 53% of US online shoppers won’t make a purchase without a clear indication of when it will arrive. If you’re not showing your customer exactly what to expect as they make a purchase, you’re risking the chance of losing them. Remember that shipping time and fulfillment times differ. Provide a timeline for how long the item takes to ship out, then how long it takes to get delivered. If you use a partner that provides live shipping rates, this will already be automated.
Consider upsell strategies to increase sales
Generate offers through thoughtful analysis of your customers, trends, and profit margin.
Do you know which products customers most often purchase together? If you don’t already have an upselling app linked to your e-commerce store, now is a good time to integrate. In a case study by Bold Commerce, an online business owner was able to increase his sales ten-fold in two months by adding intuitive upselling features to his online store.
Another great way to boost sales is by bundling products, which in turn increases average order value. Bundles give shoppers the satisfaction of a great discount while making it harder for them to price-match with other online stores.
Plan ahead for inventory
Managing your inventory is an essential aspect of running your company, and even more crucial during the holidays. If managed poorly, you could either be wasting money through overstocking or losing customers through understocking. To avoid an inventory nightmare:
- Track sales history in the last year to determine your bestsellers and make sure they’re in stock.
- Ensure that your supplier is reliable, and your warehouse or fulfillment partner is well-staffed and able to handle the influx of orders.
- Use real-time predictive analysis to understand product trends and stock up accordingly.
- Use an e-commerce fulfillment partner that uses automated reorder thresholds to stock up when inventory is running low.
Pay attention to packaging
Many businesses take advantage of the holidays to wow their customers with a great unboxing experience. 40% of shoppers would share their package to social media if it came in unique or custom packaging, and 61% say they’re more likely to make a repeat purchase if it came in a custom box.
Custom packaging isn’t just an investment; it’s an effective way to gain repeat customers and advertise your product through word of mouth marketing. While aesthetics are important, consumers are becoming increasingly conscious of their carbon footprint. Be a part of the movement by using eco-friendly custom packagings like Arka or Packlane.
Optimize the checkout experience
According to a Baymard Institute survey, 69% of items added in online carts are never purchased. The possible revenue from these could add up to 260 billion dollars. With this in mind, it’s crucial that your checkout experiences are as seamless as possible.
Create a better checkout experience for your customers and reduce cart abandonment with features like:
- Live chat support
- Full cost breakdown
- Transparency on exact shipping times
- Free gift with purchase
- In-store pick-up options
- Offering affordable same-day or free shipping options
If you’re a Shopify store owner, take advantage of Shopify Scripts. Scripts allow you to customize the checkout experience with things like multiple payment options, cart recovery email automation, and more.
How to offer free shipping
If you’re not already offering free shipping, the holidays are the perfect time to start. 79% of US consumers are more likely to shop online if shipping is free. The question is, how do you offer free shipping and increase profits at the same time?
Be strategic about your free shipping play. Set minimum order value thresholds for customers to qualify so you can recover shipping costs and increase profits within the same purchase. A survey by HubSpot revealed that 24% of customers would spend more money in order to qualify for free shipping.
In order to offer your customers free shipping, you as the business owner will have to absorb the cost. Make sure you use carriers that offer competitive shipping rates or integrate your online store with a third-party logistics provider (3PL) that gives you discounted shipping rates from major carriers.
Want more holiday shipping tricks and advice? Watch out for Part 2 where I dive into solutions 🎉.