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Importance of shipping for D2C brands

Versha Kamwal
September 23, 2021
6
mins read

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In 2019, the direct-to-consumer (D2C) sector had a total valuation of $26.8 billion compared to $20.8 billion in 2018. The number suggests that D2C brands have experienced massive growth owing to low pricing, quality assurance, better customer policies, and applaudable customer engagement.

Additionally, ecommerce brands with dedicated websites recorded an 88% rise in consumer demand in 2020 compared to the previous year. It’s evident that D2C brands now compete mainly on customer experience.

However, keeping up with the constant increase in demand is not easy when it comes to order fulfilment, especially shipping—a crucial aspect that often gets underestimated that impacts your online store’s profitability.

In this blog, you’ll learn what is ecommerce shipping, what are the new norms of shipping, and importance of shipping for D2C brands.

What is ecommerce shipping?

Ecommerce shipping constitutes all the services that are required to transport the online orders from a fulfilment centre (FC) to the customer's doorstep.

Shipping is a challenging aspect for any online business. So, it's essential for ecommerce brands to create an effective shipping strategy that optimises their order fulfilment capabilities, keeps a check on costs, and delights their customers.

Fast and free shipping: The new norms of shipping

Fast and free shipping statistics

By looking at the above stats, we can conclude that customers expect fast and free delivery as a standard service from ecommerce brands.

Let’s take a look at the reason why shipping is important to keep up with ever-growing customer expectations.

Importance of shipping for D2C brands

Shipping is indeed the first point of physical contact with your customers when you're running an online business. Hence, it is important to provide your customers with a great shipping experience to keep them returning to your online store.

Pre-purchase shipping influence

When purchasing a product online, consumers often compare all of the implicated costs, such as shipping, tax, and other fees—while shipping is the most significant one. Offering fast and free shipping to your customers across the country can give you an edge and increase conversion rates drastically.

Post-purchase shipping influence

Customers are starting to expect a more personalised experience around their online purchases. Any delay or exception during shipping that can result in late order delivery, damaged or lost package, can definitely ruin the customer experience. While a fast, on-time order delivery with incredible order accuracy can delight the customers.

In order to achieve lightning-fast shipping speed, you need to fulfil your orders from multiple locations, i.e. a distributed network of fulfilment centres. And for offering free shipping, you must determine a strategy to cover and reduce the shipping costs.

Here are a few of the main benefits of offering fast and affordable (or free) shipping on your online store:

1. Increase conversions and reduce cart abandonment

44% of online shoppers who abandon their carts cite shipping and handling costs as the primary reason. 24% of customers have canceled an order due to too-slow shipping. You can reduce shopping cart abandonment and keep conversions high by offering the fast and free shipping your customers expect.

2. Boost customer satisfaction and loyalty

73% of online shoppers expect affordable, fast shipping. When you meet this expectation, they’ll come back for more — and tell their friends. You can also include free shipping and redefine ecommerce shipping standards that can help you increase customer retention.

3. Increase average order value (AOV) and revenue

When you offer free shipping over a minimum purchase threshold, many shoppers will add additional products to their cart to meet the minimum. For instance, free shipping for all orders over 1000 will attract shoppers to add more products in their carts. Thus, this will increase your average order value (AOV) and revenue.

A study found that 52% of shoppers have added extra products to their shopping cart to meet a minimum purchase threshold.

Wrapping up

When it comes to keeping your D2C business competitive, it’s easy to believe that you need to match the aggressive speed of Amazon. With so much customer experience and potential sales riding on the kind of shipping service you offer, it is essential to ramp up your shipping capabilities. By partnering up with a tech-enabled 3PL like Eshopbox, you can offer lightning-fast shipping speed and affordable shipping that your customers are looking for. Well, then the sky is the limit for your D2C business.

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