After the increase in digital shopping due to the coronavirus outbreak, 51% of retail leaders said they’d be increasing logistics and supply chain investments, per a report from BigCommerce and Retail Dive from late 2020. Of course, while shipping can be a strong point of differentiation for your brand, you can’t just create a strategy and call it a day. You have to be prepared to execute — both operationally and in terms of pricing strategy. That requires the coordination of multiple teams, from marketing to fulfillment and many others in between, or in other words, a clear and smart logistic strategy.
Establishing your logistic policy isn’t just about what options you’ll offer. You also have to ensure that everyone involved in the pipeline understands their part in the process. So let’s look at the absolute must-haves in your logistic strategy and what you need to know to make it happen.
Assemble a great team
The first step is identifying the right people to help make decisions about your shipping strategy to tackle any big challenge. Who are the stakeholders in this project, and at what level will each be involved?
Here’s a list to get you thinking:
- The marketing team is responsible for communicating with your customers. They may use shipping promotions like free or flat-rate shipping to bring people to your site, increase order value, or promise expedited shipping speeds for an upcharge.
- Your web designers and developers ensure customers see the right shipping options surface at the right time — and that the offers are clear to customers from a microcopy and usability standpoint.
- The fulfillment team is, of course, very involved in ensuring orders are picked, packed, and shipped accurately and on time every time.
Your customer service team members are perhaps the most important. Nothing sparks an angry customer call like a missing or delayed delivery.
Support needs to know how your approach to shipping will affect customers at each stage in the customer lifecycle — especially if it has any impact on product prices — so they can plan to answer customer questions satisfactorily.
Set the right goals
Now that your team is assembled define what you want to achieve with your shipping strategy. There are plenty of areas you could focus on, but here are some common examples:
- Increase conversions by offering shipping options and price rates your ideal customers expect.
- Increase average order value through promotions like a free shipping threshold or flat rate shipping on certain high-profit items.
- Expand market or target audience by shipping to new geographies.
- Decrease costs by investigating alternate shipping services with major carriers.
- Improve operational efficiency through incremental process improvements and thorough education of fulfillment teams.
Choose the best shipping strategy.
You might be overwhelmed by all the options at first, but don’t worry — we’ll break them down.
Successful online stores implement several of these shipping methods into a complete strategy that works for their unique business.
Free in-store pickup.
If you have several brick-and-mortar locations or a very strong local business, offering free in-store pickup could be a win-win for you and your customers.
Benefits:
- Customers can skip the wait for and the cost of delivery.
- Your online business can skip the weight of one more package.
Live rates.
Getting live rates in real-time directly from carriers like UPS, FedEx or DHL will often get you the best possible rates while still covering your shipping costs. Using this approach as a promotional tool isn’t easy because the rates may vary significantly.
Benefits
- You ensure the cheapest possible shipping option by charging exactly what the carrier would charge you.
- For lightweight orders or customers near your warehouses, you can often offer significantly cheaper shipping than your competition while still covering costs.
Same-day delivery.
Same-day delivery is exactly what it sounds like — but it’s a lot harder to achieve than it is to define. Serving your customers with same-day delivery requires a smoothly smooth logistic strategy operation and plenty of resources.
Benefits
- Stand out from the crowd with the fastest delivery time, and you’ll increase your conversion rate.
- Those higher conversions — and the reputation you’ll build with same-day options — could lead to increased revenue.
But unless you’re only doing local business, this shouldn’t be your first go-to strategy. You have to walk before you can run! A slightly easier goal to achieve could be two-day or overnight shipping.
“We’ve seen two-day and next-day delivery transform merchants’ websites regarding ads efficiency, customer lifetime value, and average order size,” said Michael Krakaris, co-founder at BigCommerce fulfillment partner Delivery.
Free shipping.
Free shipping has become, for many consumers, an expectation after becoming spoiled by Amazon Prime.
Benefits:
- It’s easy to explain to customers
- It aligns with customer expectations
- It positively impacts conversion rates for customers who make it to your checkout funnel.
But, while free shipping is free to your customers, it’s not free for you. You still have to pay the carrier and make sure your margins are high enough to cover the associated costs. Even if you’re making more sales, you’re not getting ahead if you’re losing money on each one.
Ecommerce Packaging Options
While not every business needs to ship products in the kind of package that ends up in one of the many unboxing videos on YouTube, the way your shipment presents itself at your customer’s front door is a concrete representation of your brand. That means you need to consider a few things.
Choosing your packaging.
When choosing the packaging, you’ll use things like the fragility of the items, how the components packed inside will settle or move around, and how the package will be opened. Fragile products will need extra padding in the packages, and there are still more specific considerations if you’re shipping temperature-sensitive or perishable items.
Custom packaging.
Custom packaging can set you apart from your competitors and give shoppers a more memorable unboxing experience. And it doesn’t have to be dramatic. Maybe your packaging materials are customized with your logo, or you use a branded sticker to wrap the products in nice tissue paper.
Eco-friendly packaging.
Ecommerce has been a boon for the world in so many ways, giving people access to more and more opportunities — but all that shipping does have the potential to create a lot of waste. Consider whether you can incorporate eco-friendly elements, like biodegradable packaging filler or compostable mailers. The method will be especially important if eco-friendliness is a value of your brand.
Calculating Ecommerce Shipping Costs
Before you select a shipping strategy or decide how much it should cost your customers, you need to understand how much shipping will cost you.
Package size and weight.
The important thing to focus on here is making sure your products have accurate weights and dimensions so that the rate you get back from a carrier is as precise as possible. Break your products into groups and focus on getting weights and measurements for the heaviest or largest 20% and the smallest or lightest 20%.
Origin country and destination.
If you’re only shipping domestically, it can be pretty simple. Flat-rate or free shipping options tend to work well, as it’s not as expensive for you to ship within the U.S.
However, if you want something a bit more nuanced, you can also set rates by zones. For example, if you’re located in Austin, Texas, you might want to offer a cheaper rate for nearby areas, increasing the rates as you radiate out from there.
Shipping internationally normally necessitates getting a rate straight from the carrier, like U.S. Postal Service, DHL, or others. Rates can vary significantly even in neighboring countries, and it isn’t easy to build your rates for these scenarios.
Conclusion
Above are the five clear ideas to level up your BigCommerce logistic strategy. Regarding the logistic strategy, refer to Backorder if you need an application that can assist you in some repetitive tasks. With a small amount of investment, you will be able to save cost and warehouse space since the app can notify you when the product is out of stock, automatedly hidden from the category page.
