The COVID-19 pandemic wreaked havoc on global supply chains. Lockdowns, worker shortages, and slow port turnaround times have all contributed to worldwide supply chain issues and shipping delays.
These problems have been felt by both retailers and shoppers. In the US,60% of consumersreport being unable to get a product due to shortages. And according to theUS Census Bureau, COVID-19 caused supply chain disruptions/delays for38.8% of small businessesin the United States.
Not only do retailers lose revenue from not being able to stock in-demand products, their customer relationships also suffer.58% of consumerssay they would stop buying from a brand entirely after one to three supply chain delays or disruptions.
So how can you navigate shipping delays as a retailer? This post will highlight the main causes as well as some tips for mitigating shipping delays.
Table of Contents
What causes shipping delays?
- Labor shortages
- Holidays
- Extreme weather
- Supply chain issues
- Inaccurate shipping information
According to the National Retail Federation (NRF),97% of its membershave been impacted by port congestion and shipping delays.These delays can damage retail brands’ reputations and reduce customer trust.
While delays are the last thing any retailer wants to face, sometimes they’re unavoidable.
Here arefive common causes of shipping delays:
1. Labor shortages
COVID-19 positive cases and global worker shortages have contributed to shipping delays.
Job openings in the US havehit an all-time high, and UK employers are experiencing thebiggest shortage of job candidates ever.
Without people to carry out tasks essential to the supply chain, delays are inevitable.
Kelly and Zoey Allen, owners ofKelzo Jewellery, a Shopify-based store, explain how a mix of worker shortages and an increase in online orders have contributed to delays.
For us, we feel the pandemic has had a lot to do with causing the delays. With many postal workers and couriers going sick or fearing attending work, alongside higher than usual online ordering due to physical store closures, packages have taken longer than usual.
2. Holidays
Retailers often experience spikes in orders during holiday periods. This causes an increase in shipment volumes that can overwhelm couriers, especially if they don’t have an efficient delivery network system. This can cause shipping delays at a time when shoppers most want to have their items arrive on time.
During the 2021 holiday season,25% of US shopperssaid they were very concerned about shipping delays.
3. Extreme weather
Nearly12%of total estimated truck delays in the US are due to weather. From freezing conditions on the road to gale force winds at sea, bad weather can create chaos at all stages of domestic and international shipping.
4. Supply chain issues
39% of brandssay shipping and manufacturing delays and shipping costs will continue to be a top supply-chain-related challenge over the next 12 months.
A global pandemic, war conflict, and port delays have caused worldwide supply chain problems. As aMcKinseyarticle says, “Clogged ports, expensive cargo capacity, and emergency shipments became prevalent during the COVID-19 pandemic. Since then, the conflict in Ukraine has also contributed to product-line closures, transport delays, and spiraling input costs.”
And according toBloomberg, 77% of the world’s ports are experiencing abnormally long turnaround times.
While in January 2019, an average late container ship was delayed by about four days, inFebruary 2022, a late ship was delayed by more than a week. In February 2022, only about34%of container vessels arrived at their destination without any delay.
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5. Inaccurate shipping information
When customers give a misspelled or incorrect address, or when the retailer doesn’t document the customer’s order properly, the courier company may not have enough information to correctly deliver the package. This can cause shipping delays, increasedlast mile deliverycosts, or worse, the package never arrives.
How do shipping delays impact retailers?
Today a sale is considered final not when a customer makes payment, but when the order arrives at the customer’s chosen address. There’s pressure on retailers to meet customer expectations.
In a recent survey,76% of respondentssaid that an unacceptable delivery experience would strongly or somewhat affect their decision to order from that company again.
On top of influencing customer purchasing decisions, shipping delays impact retailers on a number of levels:
Lost revenue
Shipping delays can negatively impact retail revenue on a huge scale. According to a recentMcKinseyarticle, “For companies in most sectors, a single prolonged shock to production could wipe out30-50% of one year’s earningsbefore interest, taxes, and depreciation.”
Susana Saeliu, co-founder and CEO of Shopify storePluto Pillow, a custom pillow brand, explains how shipping delays in the US and across Asia lowered her brand’s conversion rate.
The longest we've been delayed is by eight weeks; in other words, customers would receive their custom pillow in two months! This was incredibly difficult, as our turnaround time was usually seven business days. As a result, we definitely saw a decrease in conversion rate.
In addition, customers often find long delivery timelines off-putting. They may either abandon the purchase entirely or buy from a competitor. In the last year,32% of customerssay they have abandoned their carts because the estimated shipping time was too long.
Shipping delays can also cause inconvenientstockouts, which cost retailers $1 trillion every year.
Damage to brand trust
Concerningly,41% of consumersplace the blame for late deliveries on retailers. When shoppers rely on retailers to deliver items on time, they’re inevitably going to be disappointed when their order doesn’t show up when expected. That disappointment can lead to future concerns about delivery times and potentially a reluctance to re-order.
And according to32% of global consumers, shipping problems or delays are some of the biggest drawbacks of ecommerce purchases:
Inventory issues
Shipping delays can make it hard for retailers to effectivelyforecast demandand plan their inventory. As a result, retailers mayoverstockand end up paying high costs forinventory storage. Alternatively, they may under-forecast customer demand, quickly sell out, and be unable to restock quickly enough to meet actual customer demand.
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Tips for dealing with shipping delays
- Shipment tracking
- Consistent communication
- Offer free shipping
- Provide local pickup
- Offer gift cards and discounts
Dealing with shipping delays is one of the biggest challenges retailers face in 2022. Even with streamlinedretail operations, it’s hard to avoid shipping delays completely. Unfortunately, even if the delay isn’t your fault,your customer will see it as a problem and you may lose sales.
As a result,43% of retailersare changing their shipping strategies to reduce the impact of global shipping delays.
It’s vital to plan ahead and think about how you’ll handle inevitable shipping delays. Here arefive tips for dealing with them:
1. Shipment tracking
Customers like to know when their order will arrive. In a recent survey,96% of respondentsindicated they would findGPS tracking useful when awaiting deliveries. Shipment tracking can reassure them that their order is on its way, even if it’s delayed.
Shipment tracking can also explain the cause of the delay.
Jack Lee, the owner ofEvolve Mala, a Shopify-based crystal jewelry store, says that shipment tracking has helped his business lower the number of customer support requests they receive.
Shipment tracking allows customers to know if a delay is caused by the shipping carrier or your business. The latter erodes brand trust much more than the former. Another benefit of offering shipment tracking is that it reduces the number of support tickets from customers wanting to know where their order is.
Some ecommerce providers let customers track the delivery of packages. Look forappsthat track orders in real time and integrate with multiple international carrier companies.
2. Consistent communication
Consumers want to know delivery expectations upfront –– around45% of shoppersactively look for businesses that clearly show anticipated delivery times.
Following a purchase, they want to receive regular updates on their order status. Maintaining open channels of communication with customers helps build trust.
49% of surveyed brandsare investing in not just their delivery practices but also transparency with their delivery promises, like sharing when an order is prepared and shipped.
Retailer Jack Lee finds that when his jewelry store is honest about shipping delays, customers tend to be understanding.
我们将在我们的电子邮件通常包括一个提醒customers that delivery may be delayed due to the holiday rush, inclement weather, Covid, etc. We find that customers are generally pretty understanding of shipping delays as long as you're being honest and transparent with them.
3. Offer free shipping
75% of shopperssay free shipping continues to have a significant influence on purchasing decisions. Free shipping is a chance to show customers you value them and are committed to providing high-quality service.
Even if orders are hit with shipping delays, free shipping goes a long way in improving customer experience and encouraging people to shop with you.
卢克·李,创始人兼首席执行官Pala Leather, says that offering free shipping has helped his brand build trust with customers.
Offering free shipping is also another way to build trust, especially if you're a global brand. Why? Because shipping is a common concern for overseas buyers. Taking this worry off their backs can help you gain more buyers.
4. Provide local pickup
35% of consumersare choosing shipping options likecurbside pickupto receive their orders on time. As shoppers become increasingly aware of shipping delays, they’re more open to new ways of receiving their orders.
As a result,41% of merchantsplan to invest further in buy online, pick up in-store options like curbside pickup andclick and collect.
Kelly and Zoey Allen, the owners ofKelzo Jewellery, are tapping into the rise of curbside pickup as well as absorbing additional postage costs.
We offer local pickup as well as a signed-for-delivery option. We also absorbed the rise in postage costs ourselves so as not to incur any extra costs to our customers, showing them how committed we are.
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5. Offer gift cards and discounts
Gift cards and discounts are another way to show customers you care and value their business, even when things don’t go according to plan.
Offering gift cards and discounts can help lower their frustration surrounding late delivery. This strategy will require a little investment on your part, butit’s much less expensive than having your customers write bad reviews or never buy from you again.
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Shipping trends for the future
Customers areincreasingly conscious of the environmental impact of their shopping choices.In 2021,44% of customersactively chose to buy from brands that have a clear commitment to sustainability.
Retail businesses need to be aware of how their shipping and delivery options impact their overall carbon footprint.
Green shipping
“Green shipping” or “zero-emissions shipping” is an important topic, both for shipping companies and retail business owners.客户希望看到品牌采取措施增加e their carbon footprint.Shipping is one of the major ways to do so.
Today, the shipping industry is looking at ways to reduce fossil fuel consumption. Recent progress inmarine wind and solar technologymeans that these options could become a cost-effective fossil-fuel reduction choice for shipping companies.
Currently, there are plans tobegin installing marine wind and solar technologyin shipping vessels this year.
Some ecommerce providers allow you to offer carbon-neutral shopping to customers. Look forappsthat provideinstant emission calculationsso customers can see details about the item they’re purchasing. It’s important that providers have offset projects that areverified by internationally recognized third-party organizations to ensure their quality and integrity.
Shopping local
As a result of the pandemic and sustainability concerns,around 56% of consumersare shopping at neighborhood stores or buying locally sourced products. Brands with physical locations can tap into these customer preferences to combat shipping delays as well.
Retail businesses can consider offering hybrid shopping options (the preferred shopping method for27% of consumers) by providingBOPIS(buy-online-pick-up-in-store) for in-stock items.
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Mitigate shipping delays at your store
Now that you know the main causes of shipping delays, you’re ready to put in place these strategies to minimize their impact on your retail store in 2022.
Whether you run a thriving ecommerce store or manage a physical retail location, these tactics will help your business succeed in spite of current challenges.
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