Not surprisingly, retailers are obsessed with cost control just now. Whereas up to last year, the talk was all about service, service, service, the economic situation has caused business owners’ mindsets to recalibrate, and quite rightly they’re fixating on costs, costs, costs. Logistics costs are a big part of the equation.
In this climate, 3PLs’ service offer is hotly scrutinised. Here at Asendia we’re conscious that our support in helping online brands retain their customers while keeping the cost of delivery manageable, has never been more important. The good news is that there are many ways to contain international air freight and last-mile delivery costs, without compromising service or jeopardising customer satisfaction, even in downturn.
Delivery costs can cause cart abandonment
Asendia’s recent survey How to sell direct in the age of the conflicted shopper delved into consumer sentiment around online shopping in 2023. We found that a massive 75% of British shoppers[1] plan to cut back on spending in 2023. For 43% of the 8,000 global online shoppers surveyed, delivery costs were a key consideration, alongside overall value for money (54%), and quality of products (50%).
Meanwhile, another survey found that 32% of consumers[1] see delivery pricing as a barrier to online shopping, with 48% preferring free or cheap delivery to help with the cost of living.
This can be engineered into overall price for domestic deliveries, but for merchants sending parcels overseas, and receiving returns from customers dotted around the world, free delivery simply isn’t an option.
Add cheaper alternatives to the mix
Offering slower and cheaper international delivery options is a popular solution for merchants seeking to save costs and help customers save money.
As a logistic provider to e-commerce brands needing to send parcels by air, we help our clients offer a range of delivery services – from fast and tracked, to slower and basic. The different ePAQ options can be integrated into our retail clients’ websites, allowing customers to choose a lower-cost international postal delivery service if the purchased item is low-value and not urgently needed. Express and tracked can be selected, if the shopper wants their parcel more quickly.
Retailers say they’ve seen a marked uplift in cross-border shoppers opting for the slower service since the cost-of-living crisis kicked in.
Depending on your business requirements, an agreed service matrix can be hardcoded in the back end to ensure that savings are being realised on smaller, low-value products whilst not risking the brand image when delivering satisfaction on the higher ticket items. Some of our clients are using this flexibly, as a means of keeping shipping costs as low as possible.
Flaunt your authenticity
Authenticity plays a significant role in shopper behaviour during the rising cost-of-living. Our survey mentioned earlier[2], found that shoppers want to engage and buy from brands who act authentically. Increasingly, shoppers are holding the retailers and brands they shop with to account, with 70% of UK shoppers willing to spend more and 56% saying they would only shop exclusively with authentic retail brands.
The values defining authenticity for UK shoppers were: being straightforward in delivering promises (57%); transparency within supply chains (41%); standing up for sustainability (39%); clear brand values (39%); and acting upon brand values (32%).
A standout finding is that 43% said a brand’s authenticity would make them less sensitive to inflationary price increases, rising to 48% of Gen Z and 51% of Millennials. It’s safe to conclude that clear, honest marketing communications about efforts being made to reduce your carbon footprint will pay off.
Many e-fulfilment and shipping partners now offer low carbon, or carbon neutral delivery[3] – something worth discussing with your 3PL, and integrating into your delivery offer and comms.
Give overseas customers what they want
Many Asendia clients are working hard to be transparent with customers, both about what they are selling and the supply chain and delivery processes being used. Post-Covid consumers, coping with a cost-of-living crisis don’t take decisions lightly, and being open and honest with them pays off.
In our survey, shoppers were asked to consider, when having an international order fulfilled, what would influence their decision to make a purchase.
We found that 33% wanted to understand where their product is being shipped from to understand the cost and distance the product will need to travel to reach them. Slightly fewer (32%) wanted to see reliable, convenient returns methods, such as paperless, drop-off box, collect, postal office, and in-store options. And 32% wanted to see grouped deliveries, where there is less packing waste, and items are delivered in one go, rather than across multiple individual deliveries.
Brands that can tick these boxes will be in a strong, competitive position. Fulfilment and delivery partners should be on hand to advise and help their clients put these highly-desirable service elements into action. They won’t necessarily cost more, and in some cases will save the retailer money.
Keep in touch, show you care
Economic improvements may be on the horizon, but consumer caution is likely to dominate for the rest of the year. For e-commerce businesses, it’s clear that cross-border selling will continue to be an essential growth strategy, with 78% of those questioned for our survey expecting international demand to grow faster than domestic demand.
To avoid cart abandonment, brands must ensure they have optimised their digital stores and delivery services to provide a transparent, fairly-priced, and reassuring shopping experience. Keeping customers informed about their orders’ progress and budget-friendly offers can help maintain consumer-brand relationships.
Letting them know you are also thinking of their budget with special offers can help. It might be worth running flash delivery marketing campaigns or offering discounted delivery as a loyalty reward. I firmly believe that by offering cash-strapped shoppers choice and transparency, brands and their delivery partners are more than capable of surviving this economic endurance test.
[1] https://www.digitalriver.com/our-company/newsroom/press-release/digital-river-survey-cost-of-living-online-spending-habits/
[2] https://www.asendia.com/resource/how-to-sell-direct
[3] https://www.asendia.com/asendia-insights/asendia-is-100-carbon-neutral
