The Intersection of Shipping Trends and Sales

Business

People today increasingly care about shipping options when deciding whether to buy things online or go to physical stores.

Not long ago, shoppers were content with waiting several days for their purchases when ordering items through the internet.

Here’s a look at how shipping trends tie into brands’ marketing efforts and the sales they achieve.

1. Only Offering Conventional Shipping Could Make Brands Miss Sales Opportunities

Due to companies like Amazon, people became accustomed to fast shipping speeds when purchasing through e-commerce sites. The company’s Prime service introduced shoppers to two-day shipping on a vast assortment of products in exchange for a membership that also gave them other perks.

Specialty companies now frequently launch expedited shipping programs, too. In one recent example, Brooks Running Company launched same-day shipping with the help of local partners. This option complements FastTrack, another shipping-related perk the company rolled out in 2018. FastTrack is a mobile app for drop shipping that allows retailers to send shoes directly to customers wherever they are, whether inside or outside of retail stores.

When it released FastTrack, the company also positioned the app as something that could help running shoe retailers offer their products differently. Since the app’s content facilitates fitting a shoe and selling it, Brooks Running Company suggested retailers could take FastTrack to places like race meetings to directly engage with customers.

This approach could acquaint a person with the brand even if they don’t have a physical location near them to visit. The drop-shipping aspect also lets merchants display more products in their stores, even when they lack the retail space to hold the merchandise.

In another example of companies giving customers what they want without delays, BJ’s Wholesale Club recently started offering same-day delivery for alcoholic beverages. The timing seems especially strategic since the holidays are just around the corner. If companies only provide standard shipping options to customers and make them wait days for their goods, they’ll likely struggle to compete with companies that offer faster shipping.

2. Customers May Choose Not to Purchase If Shipping Is Not Fast and Free

Fast shipping is something most customers expect, according to a January 2019 report. This report found 75% of consumers expected to get free shipping, even for purchases under $50. Moreover, 30% of shoppers expected free two-day shipping. Another eye-opening revelation from the research was that 29% of people backed out of their purchases after finding out their order did not include free two-day shipping.

On a related note, customers often research shipping thresholds before picking their items. The report’s statistics indicated 65% of people checked out the shipping options before selecting things to buy.

E-commerce brands continually struggle to figure out what makes online shoppers ultimately decide not to finish their purchases. The information here strongly suggests stores could lose customers by not offering free shipping. One of the challenging realities for online retailers is that customers can easily look elsewhere in seconds if they don’t find what they want at one store.

Conversely, though, offering free shipping — especially if shoppers must meet a minimum amount to avail of it — may stimulate sales. The findings from another study confirmed three-quarters of shoppers spent more to take advantage of free delivery that had a minimum spending requirement.

This data emphasizes why e-commerce companies must weigh the pros and cons of free shipping. Indeed, providing it might require significant upfront investments and taking time to find partners who will help with the deliveries. However, these conclusions show direct connections between appealing shipping options and consumers’ willingness to buy.

3. Retailers Mention Shipping Benefits as Holiday Shopping Helpers

The leading retail brands know the importance of early prepping for the holiday season. They roll out carefully planned marketing campaigns featuring press coverage, TV commercials and more. In the run-up to the 2019 holiday season, some retailers are using fast shipping as a selling point.

Walmart kicked off its campaign especially early in 2019 — on October 23. The brand mentioned its Free NextDay Delivery service, as well as an Expanded DotCom Store. The DotCom perk allows people to place online orders directly in stores when they can’t find what they need in those locations. Then, a shipping service will deliver the merchandise directly to a shopper’s home or the store closest to their abode, depending on preferences.

Amazon started its holiday marketing efforts about 10 days later. It mentioned same-day and next-day shipping as being a “delight” for procrastinators who wait longer than most to buy goodies for the season.

Plus, if people prefer to send their deliveries to somewhere other than their homes or offices, they can choose to have Amazon ship the order to a Hub Locker location, many of which are conveniently placed in places like Whole Foods Market stores and Rite Aid pharmacies.

The holiday season is a well-known sales booster. In cases like these, retailers are smartly using convenient shipping choices to tempt shoppers during one of the busiest times of the year.

4. Brands Connect Sales Increases to Shipping Options

When a store rolls out an incentive like same-day shipping, it typically takes a while to determine if the decision paid off. It did for Target, as evidenced by the store’s recent sales numbers. Comparable sales through the store’s digital channels grew by 34% in the second quarter of 2019.

Moreover, same-day fulfillment options for the period — including delivery and pickup options — accounted for almost 1.5% of the company’s total comparable sales gains. These achievements gave Target a 10% uptick in comparable sales over the last two years, which equaled the best performance in more than a decade.

Amazon is also ramping up its shipping investments. The brand spent almost 50% more on shipping and fulfillment in the past three months compared to a year ago, according to October 2019 coverage. The spending increase was necessary because of Amazon’s decision to start testing an enhanced basic Prime shipping tier where items arrive in one day instead of two.

The extra expense could pay off, though. An analyst from RBC Capital Markets anticipates a $24 billion revenue increase for Amazon. The professional clarified those results are due to the faster shipping, as well as Prime members choosing to spend more per each order placed.

5. Bulk Purchasers Find Direct-to-Door Deliveries Appealing

People who buy products in bulk are more likely to purchase online than in stores. That’s the conclusion of one 2018 poll, which surveyed people in several countries, including the United States. Plus, those bulk purchasers said discounts and offers make them open to spending more than planned.

In both the United States and Germany, 57% of the people polled said price and free delivery were the top two factors influencing their purchasing choices of bulk items. Regardless of where a person lives, it’s easy to envision several scenarios that may discourage them from purchasing in bulk at a brick-and-mortar store.

For example, bulk purchases are usually not feasible for a person who solely uses public transportation because they take up an excessive amount of room on a bus or train. Likewise, elderly or disabled individuals may find it too difficult to load bulk purchases into physical shopping carts, and they might not want to deal with the hassles of carrying them into the house.

Things like work schedules and car dimensions can also make in-store bulk purchases more difficult. If a person has both an intensive work schedule and the responsibilities of raising a family, they may not want to take the time to shop in a store for the bulk items they need.

Similarly, when a household only has a compact car with a child seat in the back and not much trunk space, trying to buy cumbersome merchandise in person may prove prohibitively stressful.

E-commerce stores that offer free shipping for bulk purchasers take care of all those difficulties. Some merchants also provide ongoing, periodic shipments of items that people want to always have on hand, such as jumbo bags of specialty pet food or bulk packages of medical supplies.

Strong Connections Worth Studying

This list shows businesses have numerous valid reasons for viewing shipments as mechanisms for driving sales. It may take a while to see surges in profits after making these changes.

However, when companies offer the kinds of shipping possibilities customers want and need, they should see it’s worthwhile to become or remain loyal patrons.