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Wary consumers have kept their dollars in their pockets as they monitor a rollercoaster U.S. economy and similar economic scenes abroad. One bright spot, however, has been continued growth of electronic commerce nationwide.
The online space remains the retail industry’s growth engine, according to Forrester Research. U.S. online retail (excluding auto, travel and prescription drugs) managed to grow 11 percent in 2009 to reach $155.2 billion. What’s more, Forrester predicts a healthy 10 percent compound annual growth rate for U.S. online retail, which would push sales to $248.7 billion by 2014.
Of course, the growth of e-commerce has resulted in increased shipping. Electronic retailing represented 8.5 million packages last year and grew 6 percent over 2008.
When small and medium-size businesses generate more sales online, they also face increased shipping costs. However, smart companies recognize that shipping can be much more than an expense in today’s highly competitive e-commerce universe.
Here are some ideas for turning shipping into a competitive advantage for your small business:
- Showcase your customer-centric approach. Convenience is one of the main reasons consumers shop online. Offering numerous options for product delivery shows that you aim to please all of them. Overnight and international delivery should always be available, as well as more economical delivery for customers who have more time in their schedules and/or are more cost-sensitive. Shipping providers have created an array of services to help e-retailers provide a broad spectrum of shipping options.
- Raise the bar. Many e-retailers are upgrading delivery at no additional cost or providing free ground shipping. It’s a great way to thank loyal customers or encourage them to hit a minimum order amount. More than 40 percent of online consumers say it motivates them to buy more online than they used to. Stu Eisenman, owner of ThinkFastToys.com, says FedEx SmartPost® — a cost-effective shipping solution that utilizes both FedEx® shipping and the U.S. Postal Service for final delivery — allows him to stay competitive. “Customers are savvy and price is a huge differentiator. FedEx SmartPost lets us pass the savings on to our customers.”
- Offer service upgrades your customers may not have heard about. For example, FedEx Evening Home Delivery® provides delivery between 5 and 8 p.m. on the scheduled day. And with FedEx Appointment Home Delivery®, FedEx will call the recipient to set up a two-hour appointment window. FedEx Date Certain Home Delivery® lets you choose a specific delivery date for your customers’ shipments. You can work around your customers' schedule and choose the best day from Tuesday through Saturday. Plus, Saturday is a standard delivery day for FedEx home delivery, which means no extra fee.
- Be upfront and clear about shipping costs. Questions about shipping should be addressed early and often. Don’t make customers jump through hoops to get the shipping price and options. They should be able to see the cost for shipping on the shopping cart page. If you base your prices on the location where the order will be shipped, give people the ability to enter their ZIP code for a quote.
- Be proactive about shipping status. Send emails notifying customers of the status of their order. Answer customers’ questions before they ask them. At the very least, provide the tracking number and easy access on your site for tracking each order to reduce calls to your customer service department. Ship as quickly as possible, within 48 hours for most orders and preferably on the same day for express orders.
- Brand your packaging. Putting your company name and logo on the package builds brand awareness. Also, family members or roommates sometimes reject a package delivery because they don’t know where it’s from. Branded packaging helps alleviate this issue.
- Streamline returns. Ironically, you can score huge loyalty points when customers are returning one of your products. It should be easy and, when the problem is on your end, at no cost to the customer. A replacement — if the customer requests one — should be delivered as quickly as possible. Consider attaching something of value to an easy return, such as a newsletter sign-up or a coupon for a future purchase.
Paul Nolan is editor of SalesForceXP magazine, a bimonthly publication that provides sales managers with insights for getting “Xtra Performance” from their sales teams.
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