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Another month is gone and another DesktopShipper wrap-up is here! As we move into Q4, September tends to be a slower spending month yet a busy logistical time. There are a lot of moving parts within any e-commerce or logistics business to get ready for the busiest time of the year, Q4. Now that it is here, companies are scrambling to make the right decisions regarding their shipping strategies before it's time for holiday shopping. Though we can try to guess what will happen in this holiday season, we’ve never had economic conditions such as these. Explosive e-commerce growth, disposable income, and labor shortages make for a confusing time for companies going into the holiday season. With that said, companies have gotten creative and are ready to pivot. Here’s what happened in September!
As expected, almost all major carriers have announced their peak surcharges for the 4th quarter. Though structured differently for each carrier, the impact is the same - it will cost you more money to ship during the holidays. We can’t speak for all the carriers, but we assume that the price increase will help carriers work overtime to get packages to customers. Overall, we understand it’s a necessity during these busy and uncertain times.
For information on carrier peak season increases, view below:
IMPORTANT TO NOTE: On top of this temporary peak season rate increase, FedEx announced on September 20th that there will be a permanent rate increase in January of 2022. Each of their services will have different rates with FedEx Ground and FedEx Home Delivery shipping rates increasing by an average of 5.9%. To get a total rundown of their changes, click here.
Shopify is Growing:
According to a recent report by Business Insider, Shopify has surpassed Amazon in online traffic. This metric, while important, is very unique for Shopify since Shopify primarily competes against Amazon for online merchants to sell on their platform. Shopify reportedly reached 1.16 billion average monthly unique visitors in the past three months compared to Amazon’s 1.10 billion. Shopify is projected to grow even more, anticipating 1.22 billion visitors in the coming months. Shopify has quickly crept up on Amazon with its focus on warehouse fulfillment, social media partnerships, business banking, and intellectual property. business banking and intellectual property. They are focused on being a partner to e-commerce businesses big and small while Amazon continues to be focused on innovation and private label.
In the past month, Shopify has made big strides and we're looking forward to seeing what they do next. Around 56% of Shopify's merchants are located in North America despite their global reach and brand. In September they launched Shopify Markets which is a hub that helps their merchants pursue and manage global markets. Shopify stated in a press release that the platform, “helps remove the complexity of international commerce and empowers independent merchants to sell to consumers around the world.” Shopify easily integrates with Global-E Online which is a company that international sales a reality of online retailers. Shopify owns part of the company and has a stake in making sure it expands and grows. Overall, many international e-commerce markets are growing and becoming more trusting of purchasing from overseas. With Shopify integrating exclusively with Global-E Online, it helps itself by not only increasing their revenue but it’s gross merchandise volume and the value of the products sold across the platform. On top of that, Global-E has a captive audience of more than 1.7 million merchants looking to increase their sales. It’s a win for Shopify, a win for Global-E, and a win for their merchants.
Early Sales Announced to Beat the Holiday Rush:
Much like last year, consumers and retailers are expecting shipping delays. The biggest difference this year, of course, is the added stress of the labor shortage. All across the e-commerce industry, there is a shortage of workers which evidently delays things. When fewer workers are available to ship additional orders, logistics will be slower. On top of all of that, port closures and delays in overseas shipping containers means some items, once sold out, might not be restocked before the holidays.
With all that said, companies are trying to encourage consumers to shop early to avoid the bottlenecks of Black Friday, Cyber Monday, and those last-minute shoppers. Many companies are encouraging consumers to purchase now instead of later. Retailers are offering incentives to their early purchasers to encourage them to buy. Not only does that help companies with their bottlenecks but it helps them keep customers happy and keeps them coming back when they feel like their needs are being met.
Returns are Extremely Important:
According to the National Retail Federation consumers returned an estimated $428 billion to retailers last year which is around 10.6% of total retail sales in 2020. This same study showed that for every $1 billion in sales, the average retailer incurs $106 million in merchandise returns. Returns are so important and it’s finally being reflected in marketing research. According to MultiChannel Merchant, return strategies are the newest sales tool! Marketers are proving that if you don’t include return data and the return habits of your consumers then you aren’t fully understanding your customers. If you can understand and factor in return behaviors of your market then you can reduce returns, increase profits and keep customers coming back for more. As we head into Q4 it’s important to start thinking ahead to holiday returns.
E-commerce returns can be extremely costly, not only in terms of restocking, reverse logistics, and overall processing but also in terms of customer satisfaction. Customers do not want to continue buying with a company when the returns process is hard. By following MultiChannel Merchant's new study and actually analyzing your returns it can save you money and help get consumers in your site purchasing. Don’t sleep on returns!