2018’s Peak Season shattered spending records for retailers. According to Adobe, consumers spent $125.91 Billion online, resulting in an 18.3% increase in online sales compared to the rest of the year. Our data showed a 236% increase in parcel shipments year-over-year, and a 638% increase in LTL shipments year-over-year.
As online holiday shopping reaches an all time high, we tracked 2018’s peak season shipping insights through our customer data and through our annual shopper surveys.
Fast and Free Shipping Won Over Shoppers Initially…
Well ahead of the holidays, retail giants such as Amazon, Walmart, and Target doled out delivery promises such as free two-day delivery and faster shipping options. As a result, there was a 4x rise in two-day shipping in 2018. With more consumers shopping for presents earlier in the season, the demand for upgrades, such as same or next day delivery, either decreased or remained flat.
However, with high shipment volume came significant risk of margin decay. In 2018, brands saw an early Returns Day — December 19 — for those who self-gifted or bought presents during Cyber Week. UPS said that it anticipated 1.5 million shipments to be returned. While customers expect fast and free outbound shipping, stakes are high for returns as well. 44% of shoppers expect free shipping, and according to our Returns survey, almost ⅔ of shoppers will not return after a poor returns experience.
Even with volume through the roof and appeasements from retailers for faster and cheaper delivery, retailers who practiced Delivery Experience Management decreased opportunities for exceptions to impact customers. Customer feedback still decreased by 9% year-over-year, with the highest negative customer feedback spikes occurring during the week after Cyber Monday. Top reasons for customer feedback from customers were delays, missing packages, and specific carrier complaints.
Positive last mile experiences prove critical to long-term brand success
According to our survey, 84% of consumers will not come back after just one poor outbound shipping experience. While delivery issues happen — especially during times of high volume, such as peak season — customers have shown understanding and loyalty as long as the brand can take clear steps to fix the problem before it lands on their doorstep.
For instance, Grove Collaborative has created a dedicated exception resolution team whose goal is to proactively prevent customer complaints by addressing their most common causes of delivery issues — incorrect addresses and damaged shipments. They are able to alert customers and work with carriers to fix the issues in-transit, and as a result, the company saves money by diverting shipments and has seen a 3 point NPS increase for shipments with resolved exception issues. Because the company has a solution to handling scaled delivery volume, it can now devote freed up time to new happiness initiatives that have raised AOV by 50%.
2018 holiday performance indicates that Delivery Experience Management must be a priority for retailers who wish to be successful this year
As brands focus on balancing high transportation and customer acquisition costs in 2019, generating repeat purchases and higher lifetime value is critical to the path of long-term growth.
While fast, free shipping is still important to shoppers, here are three tips to maintain a lasting positive impression throughout the year and that won’t break the bank:
- Over-communicate with your customers: Keep customers apprised, especially when delivery exceptions occur. When it comes to retailers managing deliveries to success, it is not just about the “what” of fixing an issue it is also imperative to address the “how.” Give customers the opportunity to subscribe to updates through text or e-mail.
- Enable self-service options: With quick access to carriers, allow customers to update shipping details in-transit. While consumers want their shippers to take responsibility for the shipping experience from cart to door, they also want some options to help make the process more convenient for them. This expectation is almost universal among shoppers — in our annual survey, 98% of shoppers expected the ability to self-serve, or interact with their brands to solve delivery issues.
- Rapid Exception Resolution: Identify and resolve delivery issues before they impact customers. While having visibility is important, knowing where experience issues occur during the delivery process is only half of the challenge — the next step is putting an escalation plan in place to solve the issue.
Convey’s customers saved time and money with delivery experience management this year. Learn how they navigated top issues during peak here.