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How Your Delivery Options Can Increase Your eCommerce Sales

This is a guest article from multi-carrier delivery management solution, Parcelhub.

Thanks to Amazon Prime, consumers now live in an age where they expect to not only buy pretty much whatever they want at a bargain price, but to also have it delivered almost immediately. 

The problem, however, is that if you're trying to compete as a retailer, this puts enormous pressure on your logistics. 

In fact, it leaves you with two options.

Either you need to use Amazon's own fulfilment service, or you need to be able to offer the same level of service and customer experience - especially when it comes to rapid delivery.

So, what delivery options can you offer that align with customer expectations? And how can you implement them?

Why delivery is now a key part of eCommerce

The reason delivery has become such a key battleground in eCommerce is that shoppers are increasingly demanding and impatient.

Amazon Prime has offered them a really fast service, but in the wider eCommerce world, the increasing use of smartphones, smart speakers, social media, streamed TV services such as Netflix and increasing bandwidth have just made them more keen for instant gratification.

As online shopping has increased and the demand for instant shopping has grown, so has the need for online merchants to differentiate themselves in such a competitive arena.

In fact, a study of more than 180,000 consumers by KPMG found that 39% of millennial's preferred buying from shops than online, simply because "delivery took too long". 

This means that differentiating by price is no longer enough and merchants need to stand out through other means - including their delivery options.

What delivery strategies can you implement?

While the easiest answer to "what are the best delivery strategies to implement" would be "the fastest ones", there is much more to creating a sales generating delivery strategy.

Yes, there is obviously a need for speed, but there is also a need for variety, not to mention a balance between speed and cost.

So, what exactly do you need to offer your customers?

1. A range of delivery options

The first step is to offer a range of delivery options for the customer and to prominently use them in your marketing.

While it's tempting to offer every conceivable combination of options at the checkout stage, this can be as off-putting as not having any options at all. 

Instead, look to offer a sensible range of delivery options that cover all bases: same day, next day or standard, for example.

What you can offer will depend, as we shall come to shortly, on pricing, the relationship you have with your carriers and historical product demand

It is also somewhat dictated by the nature of the product, as there will be certain items that consumers will want almost immediately, whereas they will be happier to wait longer for others. 

2. Pricing

The biggest thing with offering a range of delivery options - and in using delivery to help drive sales - is the pricing of that delivery option.

As a merchant, delivery costs money. Usually, the longer and less precise the delivery time, the cheaper it is, and vice versa. This is where retailers need to be clever.

For some, the cost of rapid delivery can be justified in terms of either gaining sales, or in not losing sales to rivals. For others, the justification is less clear.

The problem is, it's not something you can afford not to offer.

So, what are your options?

Firstly, you can consider slightly inflating the price of goods, but appear to offer 'free' next-day delivery. 

Alternatively, you can simply charge more for next-day delivery, slightly less for three-day delivery and nothing for five days or more. 

The reality is, there is no golden rule for what does and doesn't work - it is wholly dependent on the goods being sold, the consumer base being sold to and your marketing approach. The only way to know what works best is to experiment. 

It is worth noting that, even if charging for next day or even same day delivery, it can pay to promote this at every opportunity, as this can provide instant gratification. 

3. Tracking and other 'add ons'

Other ways to tempt shoppers to buy with you - and indeed spend more on delivery - is to include a range of add-ons to the delivery process, such as free text alerts of progress, online tracking tools, specified delivery days and times, and so on. 

4. Subscriptions

One way to cover the cost of implementing all of these nice new services, such as same day delivery, text alerts and so on, is to offer a membership scheme where shoppers essentially subscribe to your brand and receive not only special offers, but also free next day delivery.. 

This works really well for fashion retailer, ASOS, with its Premier Delivery option costing £9.99 for the year and providing customers with either next-day or selected-day delivery at no extra cost. 

The power of returns

It isn't just delivery in its traditional sense where there are eCommerce gains to be made.

A recent study by Klarna did in fact find that more than three quarters of UK shoppers would buy more from a retailer online if they offered free returns.

The survey also found that 82% of consumers believed returns were a normal part of online shopping, while 31% would be more likely to buy something if they could pay for it after trying it at home.

That's not all though.

As many as 78% would buy more over time with the option of free returns, while 86% believed it would make them more loyal and likely to keep coming back. 

Now while most of these stats alone highlight the importance of returns, it's also worth noting that 89% of shoppers will check a brand's returns policy before they make a purchase online, so it's worth ensuring that yours gives you an advantage over your customers.

Need inspiration? Take a look at this returns policy template.

So, what does it take to make online returns as easy as possible. 

According to Paul Durkin, Director of Home and eFulfilment at Wincanton, an online portal that allows consumers to select specific pick-up times is an option to overcome this. It's more convenient for the consumer and increases visibility of stock for the retailer.

Ultimately, it's important to be flexible around returns.

Having the option to consolidate, refurbish, locally redistribute, recycle or even resell stock internationally can keep costs down.

Investing in the right technology increases visibility of products that are off of the shelf, cutting down unnecessary movements and keeping items available to customers.

The challenges of these new ways of delivering

While finding new delivery strategies and options is a must for driving eCommerce sales, it comes with its challenges.

Getting the price right, as we have seen, is a major challenge, but behind the scenes managing a complex array of carriers to make such delivery options possible - and cost effective - is really tricky.

Not only does it require working with an array of carriers, it also means managing stock and orders in line with those carriers.

While this can be done in-house, the sensible solution is to opt for a third-party company or software that can help manage this process.

In fact, it can be considered essential today to have such systems and services in place to stay competitive.

Final thoughts

The internet has revolutionised shopping, making it easier than ever to buy things, forcing prices to drop. 

The web - and allied services and tech such as Amazon, smartphones, smart speakers and streaming content services - have made consumers ever-more demanding of instant gratification.

This has made delivery one of the key battlegrounds to win custom.

Until recently, this has meant offering fast or free delivery.

Now it means offering fast and free delivery - and if that isn't possible, then offering something extra that makes buying from you more lucrative than buying from your competitors.

The technology is there to make it happen, even down to the complex management of making it, but it is hard and expensive. Consider how an advanced inventory management system with shipping management capabilities can benefit your business.

The caveat is that, done correctly, it will increase sales - and that is a delivery worth counting on. 

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Topics: Shipping & Fulfilment