Holiday shipping: What retailers need to know in an unpredictable year
If someone had predicted late in 2019 that we’d spend the majority of 2020 feeding sourdough starters, catching up on reading and turning our living rooms into home offices where we watched “Tiger King,” shopped for Pelotons and planned the KPIs for 2021, no one would have believed it. Suffice it to say that 2020 has made us rethink just about everything we do and consume. One thing that hasn’t changed? Our collective online shopping habits. When we were unable to visit brick and mortar stores, e-commerce saw a surge to the tune of $107 billion as a result of the pandemic.
With the 2020 holiday season approaching, that surge is only going to continue, as 47 percent of Americans say they only plan to shop online for gifts this year, according to a recent survey conducted by Morning Consult. Of that same group, 19 percent of respondents say they plan to start shopping earlier than usual.
Couriers are already anticipating an increase in deliveries and have subsequently issued warnings about potential delays. This has led to initial price increases — and there’s always the possibility of further surcharges. But this year, with the state of economy and ongoing pandemic, it’s important to have increased price sensitivity and always default to transparency when communicating with customers.
While the holiday season poses a huge business opportunity, there’s also potential for risks if things don’t go according to your best laid plans. Shipping plays a central role in making you have a successful season and keep your customers happy.
In the guide below, we’ll cover the customer timeline, fulfillment and customer service benchmarks that should be understood to have a successful holiday season. After all, no one wants packages containing holidays gifts to arrive on January 3.
Understanding the customer shopping timeline
In the last few years, customers have started their holiday shopping earlier in the season, with 52 percent of holiday shipments occurring before Black Friday and in the first two weeks of December. This year, businesses should expect that trend to continue, as customers will likely try to get their shopping done early to avoid any shipping issues.
To accommodate for the imminent swell of orders, which may begin as early as October 10, retailers should start padding delivery lead times. Seems simple enough, but peak season tends to complicate things. While it’s normally best practice to add an additional day or two to the tentative delivery date provided to customers for wiggle room, the holiday season calls for a longer lead time. Figurative and literal fulfillment roadblocks like stock outages, inclement weather or disruption in the supply chain are all the more likely this time of year.
In this case, it’s always better to plan for the worst case scenario and be pleasantly surprised than the other way around. Think of it this way: Everyone loves when mail comes ahead time, but no one wants to be left in the dark about a package they’re eagerly anticipating — especially if it’s a gift.
Marketing and offers
As any successful marketer well knows, marketing is more than the branded emails you send or what you post on social media. It’s also how you operate your business. Based on that standard, international shipping is marketing. By showing that your business is capable of delivering everywhere, you can attract customers all over the world.
During the holiday season, it can be difficult to stand out from the crowd vying for the same end of year dollars. Promoting offers and discounts, is one especially effective way to nab a sale, though.
Seasonal offers encourage and incentivize early ordering, which will be important this year. Offers are intended to encourage shoppers to beat the inevitable seasonal rush with deals. They are also a great way to encourage customers to order early. Whatever the case, ship-by dates should be front and center, as transparency about cutoffs will make or break the holiday season for businesses.
Shipping as a marketing tool
Free shipping: If the holiday season is all about giving, consider this perk for your customers: Free shipping during peak season. It can make a serious difference for your business when you consider that 65 percent of consumers look up free shipping thresholds before even adding items to their cart. Adding to that, nine out of 10 customers report free shipping as a deciding factor when they want to shop online.
That said, it’s OK — and financially savvy — to acknowledge the risks that are associated with offering free shipping year-round. One way to make this promotion especially powerful is to apply it to just the most popular items or in bundles, that way you’ll be sure to get a high ROI. Another solution is to absorb the cost of “free” shipping into the list price.
Same-day fulfillment: The holiday season can be a stressful time for the logistics industry — especially when same-day and rush fulfillments are so normalized. If your business will be offering those options this year, ask yourself the following questions first:
- Know your limits: Can you find, pack, and ship and order in one day?
- If you work with a 3PL provider is this feasible for their team?
- Will the package still arrive on time?
After all, it’s about pleasing the customer who is paying for an expedited service.
Returns: Although it may seem counterintuitive to your revenue goals, returns are an important part of any holiday strategy. In fact, 89 percent of repeat customers who had a pleasant return experience (like one that features free shipping) say they are likely to make a future purchase, according to Return Magic.
If you need to establish a clear and updated shipping policy that includes returns ahead of the 2020 holiday season, give this free shipping policy generator from Easyship a whirl. In the meantime, here are three strategies you can implement to avoid returns:
- Include accurate size guides. Whether you sell clothes or shoes, no one likes ordering something in the wrong size. If you ship internationally, make sure you have international sizing, too!
- Share high-quality product images. The item in the box should always match the product listing. It’s all about managing customer expectations and avoiding any unpleasant surprises.
- Solicit product reviews. It’s true what they say about constructive criticism — it makes you stronger in the long run. And in this case, genuine reviews from real users makes your products better, and it, again, manages customer expectations.
It’s never been more important to plan early
Most retailers understand the importance of planning and likely began their preparations for the holiday season in Q3. It’s important to have all your bases covered ahead of time, starting with stocking inventory, hiring and maybe even fortifying your server and tech accommodate for the increased number of visitors. Once the operations of your business are squared away, you’ll want to ensure that the UX of your website is up-to-date and polished; customer experience is key, after all.
Shipping and the holidays
Of course, one of the most important customer experience touchpoints comes post-purchase: package shipping and tracking. Before you can send anything out the door, you’ll want to make sure your shipping policy has been updated and is accessible.
Once that’s covered, you can start preparing for the nitty gritty. This year, expect shipping costs to be higher than previous years. UPS and FedEx have already said that big box companies that are usually exempt will be hit with shipping fees between $3 and $5, meanwhile small and local businesses will be spared. To keep things transparent at checkout and price tags consistent, many build the increased shipping costs into their overall pricing and communicate with customers to avoid “hidden fees.”
Set clear shipping deadlines: Transparency is key, always, but especially around shipping expectations during this busy time of year. It’s important to set clear and accurate shipping expectations and ship-by dates as they pertain to the holidays.
Have a seasonal shipping offer you’d like to highlight? Make sure it’s front and center! When it comes to promotions, marketing materials like transactional emails and banners advertising those dates are your friends. And, as the end of the year draws closer, rush fulfilment options will be top of mind. Make sure to be clear about what couriers you work with, what services they offer, and how much they cost.
Communicate cutoff dates: There’s no cookie cutter, easily replicated solution for shipping in 2020. The USPS might be the most popular choice historically, but with their recent delays and problems it’s best to offer a mix of options and let your customers choose for themselves at checkout.
Whatever the case, it’s essential to clearly communicate your holiday shipping cutoff dates to your customers in customer communications and at checkout. After all, there’s nothing worse than a package arriving on December 14 when your gift exchange is on December 13. The couriers’ holiday deadlines, generally released in full sometime in October, are a good rule of thumb for your brand to follow, but it’s always better to err on the side of shipping ahead of time if you can — especially with everything going on this year.
Here are the 2020 holiday season cutoff dates for the major U.S. couriers, either announced or estimated based on information from 2019:
- Retail Ground: Tuesday, December 15, 2020
- First Class Mail: Tuesday, December 22, 2020
- Priority Mail: Tuesday, December 22, 2020
- Priority Mail Express: Wednesday, December 23, 2020
- SmartPost Services: Wednesday, December 9, 2020
- Ground: Tuesday, December 15, 2020
- Home Delivery: Tuesday, December 15, 2020
- Express Saver: Monday, December 21, 2020
- 2Day Services: Tuesday, December 22, 2020
- Overnight Services: Wednesday, December 23, 2020
- Ground: Friday, December 11, 2020
- 3 Day Select: Monday, December 21, 2020
- 2nd Day Air Services: Tuesday, December 22, 2020
- Next Day Air Services: Wednesday, December 23, 2020
The importance of transparency and planning around holiday shipping cannot be stressed enough especially during these — dare we say it — unprecedented times. Being transparent about courier cut off dates and your own holiday deadlines is imperative to keeping the customer satisfied this holiday season.
Given that the possibility of delays is even greater than normal this year, it is wise to be transparent about that as well, and to add extra dates to pad your own deadlines around the holidays. Of course, no matter what option a customer goes with, make sure to follow best practices as far as package tracking communication is concerned.
Check out rates: As all marketers know, the post-purchase lifecycle begins at checkout. Start that relationship off on a high note by providing courier choices at checkout. In doing this, make sure to be transparent about rates, lead times and cut off dates. Offer customers a choice so they can make the best decision for their needs: fastest, cheapest, and best value. Often seeing the rates side-by-side gives customers an idea of the best option for them.
If you’re shipping internationally, hybrid solutions are a great option. Hybrid solutions are the most cost-effective and reliable, working with a domestic courier for most of the journey and then a regional courier for the tail end. If you go this route, however, make sure to give plenty of lead time from the cut off date — especially with USPS.
Taxes and duties: No one likes to be hit with hidden fees. That’s why it’s so important to be transparent about the taxes and duties that come with international shipping. For everyone’s convenience, here’s a quick recap on international import duties:
- Delivery duty unpaid (DDU): The buyer is responsible for covering the import duties. If not paid, items are liable to get stuck in customs.
- Delivery duty paid (DDP): The seller is responsible for paying for the import duties, taxes and clearances.
When in doubt, DDP is a safe bet that’ll keep customers from being surprised down the road. If you do go with DDU, take the logistics and customs work out of your customers hands by rolling the duties into the cost. Easyship’s rules feature allows you to set a condition that automatically pre-selects DDP or includes DDU (it’s up to you!) for international shipping.
Still time to plan
If you’re reading this, it’s not too late to plan your peak season shipping strategy — but you should probably start sooner rather than later. With so much uncertainty due to currents like the coronavirus pandemic, the US presidential election and the USPS delays, it’s best to plan as much as possible and to allow ample lead time for shipping and fulfillment. While you’re planning, make sure to communicate any policies and promotions as transparently as possible to your customers.
Easyship partners with the leading couriers to offer over 250+ shipping solutions, globally. Easyship also allows you to create branded tracking emails and packing slips, providing your customers with a holistic, branded experience.