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How to Utilize Shipping Solutions to Impact eCommerce Conversions

eCommerce business owners face several marketing challenges along with shipping today. There are so many challenges that make it hard to get your products to your customers on time. That’s why you must seek proactive shipping solutions.

Seeing that the landscape has become much harder for retailers and  brands to thrive, the big question remains: “how can retailers keep shipping in a way that elevates the customer experience, improves their journey, and guarantees their satisfaction?”

Of course, your ability to get it right with shipping goes a long way to boost your eCommerce conversion rate. But, before we provide shipping solutions to the questions posed above, let’s first consider the current shipping challenges facing retailers.

What Shipping Challenges Are Retailers Up Against?

Several problems exist for virtually every fast-growing eCommerce business out there, but we will highlight 4 of the major issues in this piece, including:

  • Carrier duopoly
  • Inability to benchmark rates
  • The amazon effect
  • Demand exceeds supply

Problem #1 - Carrier duopoly

The biggest shipping carriers right now are companies like FedEx and UPS, and what we've noticed in recent years is that these two shippers operate in lockstep. So whenever FedEx implements an increase in surcharge, peak surcharge, fuel surcharge, and more, UPS goes ahead to copy and implement the exact same thing.

Now, this happens multiple times throughout the year, not just in January alone when rates tend to increase in general. FedEx recently raised the fuel surcharge, and UPS went on to mirror that increase. 

In the minds of online retailers, after observing these lockstep patterns, it’s almost like the shipping carriers are holding all the cards here with rates continuing to increase. 

Problem #2 - Inability to benchmark rates

Do you have the ability to benchmark your rates? How can you even tell if you have the best-negotiated rates possible and if what you are getting is accurate? 

The thing is, right now, when you look at the carrier agreements from shippers like FedEx and UPS, you will notice that there are around 250 data points to consider. But you also have other competing, but smaller shippers who offer different rates as well.

The existing challenge for many eCommerce businesses right now is that they have no way to tell if the current rates they’re getting from these bigger shippers are optimized well enough against the competition. 

Problem #3 - The Amazon effect

Yet another big challenge for online retailers is the ever-growing demands of shoppers, especially since the end of the pandemic. Customers are demanding free shipping. They also want their shipping to be fast and cheap. 

In general, today’s shoppers now expect to never have to pay for shipping and that's because companies like Amazon have set the stage for such expectations. Since customers are unwilling to pay for shipping, eCommerce brands are in a sort of dilemma to decide their strategy and figure out how to meet such demands through their logistics profile. 

Retailers have to find a way to deliver orders fast and at a minimal cost, in order to reduce abandoned carts and increase conversion rates.

Problem #4 - Demand exceeds supply

The COVID-19 pandemic has impacted buying habits, changing the landscape. Buying volume online has increased so much that it’s now causing numerous shipping challenges for retailers. Some of such challenges include slower transit times, surcharges, capacity constraints, etc. 

The 5 to 7-year growth projections for eCommerce have been exceeded already and we anticipate more increases. So retailers must find a way to keep up since UPS and FedEx can’t handle all this volume. 

How Retailers can Tackle These Challenges and Keep Shipping Profitably 

Amidst these ever-present challenges facing eCommerce brands, what other options are out there in addition to FedEx and UPS? How can retailers remedy these challenges using shipping solutions to reduce abandoned carts and keep shipping profitably?

3 ways that retailers can become proactive and go on to increase their eCommerce conversions in spite of these issues include:

  • Don’t use single-source shipping
  • Display the most competitive shipping options at checkout
  • Improve the post-purchase experience

Solution #1 - Don’t use single-source shipping

With more consumers shopping online, your customers are scattered around different locations. Using just one carrier to handle your shipping needs could be doing your business more harm than good. You want to evolve from being single-source and start exploring better ways to optimize your shipping logistics. 

Rather than stay confined to one carrier, explore more options from other shippers that help you save on shipping costs and time while increasing last-mile delivery speed. Here are some tips:

  • Use consolidated shipping solutions: Using split shipments to deliver faster will only cost you more in shipping fees while increasing wasted packages which isn’t environmentally friendly. Consider opting for consolidated shipping services to help reduce shipping rates and boost customer service. 
  • Explore regional carriers: Regional shippers help to shorten the delivery time since they have a smaller operation scope. The fact that they are familiar with the routes in a specific region gives your customers greater flexibility as well. 
  • Take advantage of zone shipping: Have more fulfillment centers around your customer bases and ship from wherever the majority of your customers are located.

Solution #2 - Display the most competitive shipping options at checkout

When shoppers hop on your site, they are not just trying to find the best products alone. They also want to figure out how to get the fastest shipping and lowest cost options at the checkout. That's because retailers who offer the most competitive costs at checkout are the ones who go on to convert higher. Online stores with hidden costs or high shipping rates eventually lose such customers at checkout, ultimately hurting their conversions and increasing cart abandonment rates. 

To solve that problem, it makes sense to start leveraging an eCommerce automation solution that monitors the shipping rates from different carriers in real time.

FenixCommerce was built to do just that. Our shipping and delivery software uses real-time rates from carriers to display accurate delivery dates and multiple shipping options on your product, cart, and checkout pages. All pickup and delivery options displayed are tailored to the location of the individual customer to create a more personalized experience.  

See how Road iD was able to increase conversions up to 17% by displaying the most cost-effective shipping options to customers using Fenix.

Solution #3 - Improve the post-purchase experience

Your connection with customers doesn’t just end once you get them through checkout. You must keep the experience enriched until the final delivery. That’s why it makes sense to optimize your post-purchase phase. For example, customers want the ability to track their orders, so make sure to offer order tracking and keep customers updated regularly about their packages until the delivery gets completed.

With a smooth after-purchase experience, such customers are bound to return to your online store again the next time they need to shop or replenish their supplies. That’s how you earn customer loyalty and drive conversions. Fortunately, Fenix also provides branded order tracking services for retailers to make sure you’re creating an immersive end-to-end customer experience. 

Convert Higher by Utilizing Shipping Solutions Today 

Being open to alternative shipping solutions can be the game-changer that helps reduce shipping costs and improve overall customer service levels. At FenixCommerce, we are constantly creating software that helps retailers sell more and reduce abandoned carts arising from shipping and delivery challenges. If you’d like to have an eCommerce conversion expert at Fenix go over your entire shipping strategy and help set your logistics right, then reach out to us at once and schedule a free consultation.

Akhilesh Srivastava

Author: Akhilesh Srivastava
Founder and CEO of FenixCommerce

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