5 Lessons Peak Season Can Teach Us About Year-Round Shipping
Peak season is nearly upon us. It’s that time of the year when businesses are flooded with high-value orders. According to Shippo’s 2022 E-commerce and Shipping Benchmarks Report, 2021’s peak season order value was over $500 million, which outranked all other seasons by a significant margin. And while peak season had the highest order value last year, April-June saw the largest number of packages delivered.
What this tells us is that not only is shipping complex, but also that e-commerce businesses need to have a strategy that takes into account the change in demand throughout the year. Some months may be busier than others; are you prepared for both the ups and the downs of shipping? We believe that if you have a strategy in place to deal with peak season, you’re well on your way to a year-round, bulletproof shipping operation.
What is a year-round shipping strategy?
We describe a year-round shipping strategy as how your business deals with shipping orders throughout the year. In other words, a year-round shipping strategy takes you throughout the year without worrying about fluctuations in package volume or order value.
A year-round shipping strategy not only includes how you deal with variable supply and demand throughout the year, but also what returns procedures you’ve set in place. Shippo’s 2022 E-commerce Returns & Exchanges Report notes that, of all the consumers who returned an item, over 70% of customers returned between 2-9 items. Ask yourself: do you have procedures set in place to account for such frequent returns?
Why is having a year-round strategy important?
A year-round strategy allows you to prepare for the worst. If you have systems in place to manage the most demanding months, then shipping for the rest of the year becomes a breeze. Streamlining the shipping process for the year takes the load off your business, and more importantly, it keeps customers satisfied.
A year-round strategy also prevents any shipping backlogs caused by changes in supply and demand. These changes can cause late or even incorrect delivery of your product, which can lead to a bad customer review that can have long-lasting effects on your business. One study found that a single incorrect delivery can stop 16% of customers from shopping at that business again. The same study also found that 14% of customers who receive a late order will not shop with the business again.
Shipping can be a big issue with e-commerce. Shipping profit margins could literally make or break your business. We understand why this could be a major concern to businesses of all sizes.
That’s why we compiled this list of five ways you can ensure a year-round strategy for your e-commerce business from our 2022 E-commerce and Shipping Benchmarks Report, as well as some e-commerce specific advice for you to apply to your business:
(1) Incorporate automation in shipping and e-commerce processes
Many businesses create their workflows around a certain number of orders that need to be shipped out each month. While this might work in the short term for months where business is stable, it becomes an issue when orders fluctuate during the year. So, while you might be comfortable with your shipping operations for a certain amount of time, there will be moments throughout the year that require you to send out larger volumes of products in order to scale your business and keep up with demand.
To avoid such a hassle during the busiest time of the year, consider adding automation in your workflow. For instance, you can use “If-Then” rules as well as input default preferences to save time and eliminate human error, making it a win-win for both you and your customer.
These automation rules will be especially useful during peak season, where one wrong order can cause delays that could really hurt your business. Once you have these automations set, they will automatically extend to the rest of the year. In other words, automation applies to each and every shipping season.
(2) Leveraging 3rd-party shipping insurance for high-value orders
It doesn’t matter if you’re in peak season or not, each penny counts toward your business. Especially in busier and high-value order months, you want to ensure that your product is secure; there’s only so much you can do once your order is out for delivery. This is particularly important since almost 2 million packages are lost or stolen daily in the U.S. Using 3rd-party shipping insurance ensures there is no break in your workflow when customers don’t receive their orders, or if orders are damaged when delivered.
3rd-party insurance will help you recoup the value of your order quicker, which in turn will allow you to send your customers a replacement without having to worry about the nitty gritty details such as the claims process. For instance, adding shipping insurance with Shippo gives you three major advantages: (1) easy claims process (2) fast reimbursements and (3) affordable premiums. Money spent right now on 3rd-party shipping insurance is money well-spent for your e-commerce business.
(3) Utilizing unused digital real estate
Put yourself in your customers’ shoes: How often do you check the tracking page once you place an order? Probably a lot. The tracking page is particularly important during peak season when people tend to treat themselves and others to gifts. As such, the importance of having a page where customers can monitor their order’s location cannot be understated.
Apart from the utility to the customer, e-commerce businesses can also use this page for advertising their own products and brands. One way of doing this is by giving customers a list of similar products they can purchase alongside the ones they already have. This way, you’re not only giving customers smarter options to choose from, but you’re providing additional visibility to more products within your catalog.
This process can be repeated for each and every transaction made on your platform, making it valuable throughout the year.
(4) Optimizing the returns process
Every customer has their own preference. Some may fall in love with your products while others may want a different product from your catalog or even the market at large. The start of every year sees orders being returned en masse, so if your returns process is not rock solid, you will have a tough time. To avoid backlogs that will not only result in lost revenue but customer dissatisfaction as well, take the time to prepare such a process for your business.
Plan now and reap the benefits of a returns process all year round. Just know that more than 80% of customers familiarize themselves with a returns policy before making a purchase. If your returns policy doesn’t give your customers peace of mind, then you’re setting yourself up for a hard time.
(5) Diversify Your Carrier Mix
No matter how extensively you plan your shipping, something can always go wrong at the very last moment; maybe it’s an issue with the supply chain, or your shipping carrier is overburdened during peak season. What we know for sure is that if you don’t have different options to go to for your shipping needs, you’re at a disadvantage. Over 70% of merchants work with 2-4 shipping carriers, which tells us that having multiple carriers is not only an industry standard, but it also helps take into account any unexpected shipping issues on your end.
We understand how this might seem like an impossible problem to solve, but we have an easily implementable solution: multiple carrier backups. This means that you need to foster relationships with various shipping carriers so that if one option fails, you have an immediate backup to keep your workflow going. For instance, Shippo is considered a multi-carrier shipping software, and allows you to compare different shipping offerings from various global, national, and regional carriers across the board. This ensures you get the best rates and transit times for your particular item.
Creating a shipping strategy that caters to order fluctuations throughout the year is table stakes these days. With businesses still recovering from Covid and supply chain issues slowly being resolved, a year-round shipping strategy derived from lessons we’ve learned from Peak Season really makes shipping throughout the year less daunting and more efficient.