Holiday sales will be critical for many brands this year, as they seek to make up revenue lost earlier in 2020. Yet despite the importance of acquiring new customers and generating conversions, new data has shown that small- and mid-sized businesses are placing the most importance on fast global shipping during this holiday period.
In a study by logistics fulfilment service DHL, nearly half of all SMBs reported that fast global shipping would be the most important factor in securing a successful holiday season (44%). But this is also believed to be one of the biggest challenges facing these businesses, with 42% identifying supply chain issues as their number one obstacle. Establishing a strong shipping infrastructure will therefore be critical in order for retailers to reap the rewards of the holiday period.
“We continue to see a strong increase in merchants selling globally and through online marketplaces, such as shopping apps where customers can select products and international shipping options,” said Greg Hewitt, CEO at DHL Express U.S. “As a result, we are expecting an all-time high in e-commerce trade around the globe.”
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This was reflected in the DHL survey results, which found that most SMBs are optimistic about their e-commerce performance this year: 62% believe they will see an increase in online sales. And this increase is forecast to be quite significant, with 27% of merchants anticipating 1-20% growth; 20% anticipating 21-50% growth; and 15% anticipating growth of over 50%, compared to last year’s holiday season.
But it is this overburdening of shipping networks that is likely to cause delays and other challenges, warned Hewitt. Particularly at a time when free shipping and fast returns are table stakes in e-commerce, retailers may be struggling to maintain their usual shipping offerings while guaranteeing superior service. A fool-proof system may be impossible to implement, but certain steps can be taken to improve the positioning of a merchant as the season unfolds.
Establishing an efficient and easy-to-use mobile commerce platform is one way that retailers can maximize their incoming revenue. Data from Salesforce found that mobile accounted for 80% of digital traffic in 2019’s holiday period and 65% of digital orders on the peak shopping days; merchants can’t afford to miss out on this sales channel. Once the sales channels are set up, attention can then be turned to shipping options and communications.
“It’s essential for businesses to map out their shipping offers now and promote [these] clearly on desktop and mobile sites,” said Hewitt. “For example, businesses should consider a minimum sales amount for free shipping and returns, and whether to offer free shipping to global customers as international sales opportunities increase.”
Hewitt recommends overcommunication where possible. This is particularly important for international customers, who will likely have to deal with customs and possible duties. By calculating any of these additional charges at the point of purchase, retailers can ensure that their shoppers don’t get surprised with hidden fees at the checkout – potentially leading them to abandon their cart altogether.
Shoppers are expecting delays or longer shipping windows as a result of the pandemic, which means it’s less risky for retailers to acknowledge this than in previous years. In fact, this communication could actually improve a retailer’s performance, said Hewitt, by giving customers a clear timeline for them to plan their purchasing around. Not only does this help consumers, but it reduces the chance of shoppers waiting too long to purchase and then buying from an alternative seller.
“To manage expectations, businesses should carefully explain holiday shipping deadlines, for both domestic and international shipments, so customers know the last date an order can be placed in order to ensure delivery before the holidays,” said Hewitt. “Throughout every step of the online purchase process, small businesses need to reiterate these deadlines.”
