Can manufactured products make it to their US destinations in time for the holiday season? That is the question at hand. A number of factors are currently delaying small parcel and e-commerce shipping, including labor shortages, e-commerce growth, and other logistical problems associated with international cargo shipping. Early in September of 2021, the White House announced that they had appointed John D. Porcari as Port Envoy to the Biden-Harris Administration Supply Chain Disruptions Task Force. The task force is essentially established to address congestion at U.S. ports. The Infrastructure Deal includes $17 billion in investments to improve port infrastructure. Though a lot of excitement has been generated among the e-commerce and retail sectors about the creation of the deal, experts state that it is likely that it will not help the upcoming holiday season with its shipping backlogs.
According to the Washington Post article, “How the Delta Variant Stole Christmas”, retailers are putting together contingency plans, finding local and regional alternatives to national carriers, and in some cases boosting their own delivery capabilities. Although the concept of raising prices to deal with increased shipping rates has become universal within the e-commerce space, it is not going to cover all costs. In the same article, Nikki Baird, vice president of innovation at retail software provider Aptos noted, “prices are going higher and staying higher… free shipping is one of the most effective promotions for online retail, so it will be the last to go.” So, what are companies doing about it? In spite of raising its prices, MGA Entertainment tells the Washington Post it does not wish to alienate its customers. Rather, they expect to take a hit to their bottom line. The cost of acquiring new customers is high, so even if there is uncertainty in the air, it may be a good idea to take a small hit in order to avoid losing customers forever.
There is no predictability as to what will occur this year. However, we can take a look back and see what has happened this past year and how it might influence this holiday season. In the midst of the Covid-19 pandemic last year, e-commerce was turned completely upside down. In addition to businesses being overwhelmed by influxes of orders, parcel carriers were stretched to the limit. Furthermore, a severe winter storm in the Northeast prevented more than a million packages from reaching their destinations by Christmas 2020. This has resulted in an economic and social climate that is likely to affect consumer purchasing behavior. Although the weather cannot be controlled, we know that those consumers who did not receive their packages on time last year are likely to shop differently this year and expect higher levels of customer service.
Increased Customer Service Needs
In 2020, Microsoft Dynamics 365 released that 58% of consumers will change companies because of poor customer service and 90% of Americans use customer service when deciding to even do business with a company in the first place. Customer service can differ depending on your target market, but the golden rule of great customer service is to be constantly exceeding customer expectations. The big question on every e-retailers mind is “how do we exceed customer expectations with so much uncertainty surrounding this season?” Explore these five strategies for the best way to navigate customer needs:
(1) Communication is KEY
Good communication is a key tenant of great customer service. Maintain customer loyalty by communicating effectively with them at every opportunity. Inform customers about inventory changes, delivery times, promotions, and changes to the company. The goal is to keep all of your email list customers informed so that they know when to purchase from you in order to get their gifts in time for Christmas, even if they are not currently in the purchasing process. Not only should you email information to your customers, you should ensure all needed details are posted on your website, and if there are significant issues or delays, it should also appear on your check-out page and in the customer receipt.
(2) Under-promise and Overdeliver
As a consumer, it can be challenging to accept that deliveries and packages take 10-15 days rather than the usual 5-7 business days. Nonetheless, consumers want the truth and that involves clear expectations for their orders. A second favorite is when companies step in to "save the day" and are able to deliver their packages earlier than expected. That is why it is good to under-promise and overdeliver with your delivery times. While you can’t control carriers, you can control how quickly you package your items and get them to the carriers. By opting for the up to 15-days period, even if you intend it to only take a 7-day period, consumers will at least get what they anticipated.
(3) Take a Hit to your Bottom Line
As mentioned above, many companies are planning to simply take a hit on their profits. By keeping existing customers happy during these difficult times, companies will most likely save money in the long run. The cost of acquiring new customers is between five and twenty-five times higher than that of retaining existing ones. It is more cost-effective to take a 5% hit on certain purchases in order to retain customers long term. Furthermore, 'great customer service is often associated with free shipping options. According to a recent study by Jungle Scout, 80% of consumers expect free shipping on orders over a certain dollar amount in a single order, and 66% of consumers expect free shipping on all online orders at no minimum purchase order. Maintaining customer satisfaction involves keeping up with consumer trends and expectations.
(4) Early Shopping Encouragement
This year, e-retailers are encouraging consumers to purchase holiday gifts early. As a result of delays in international cargo shipping, fulfillment warehouses may not have the ability to restock products before the holidays this year. Promoting early shopping can prevent problems in the future by encouraging customers, especially loyal customers, to shop early. The majority of businesses have received a call from an angry customer asking why a particular item is not in stock. You can avoid these problems by being transparent with customers and planning ahead for them.
(5) Provide Shipping Options (with Realistic Delivery Times)
Ultimately, customers just wish to be in control. The carriers are beyond your control, snowstorms and blizzards may arise, and inventory shortages happen, so by providing shipping options, you can give an illusion of control back to the customer. However, ensure that in the checkout process and posted the shipping policy, delivery times are realistic based on the current shipping climate. Make it clear to the customer and allow them to decide what they want to do, as then it will be their responsibility if the package does not arrive by Christmas, not yours.
In the end, this season remains up in the air. The only thing for e-commerce companies to do is to remain as transparent as possible. Customer service is fully based on trust between the company and the customer. Businesses can only control a certain amount in a market such as this, so be as flexible and quick to react as possible.