With supply chain disruptions still making headlines, small and mid-sized businesses (SMBs) looking to remain competitive may contend with inventory challenges and rising rates of theft and damage in the last mile. In this new landscape, the shipping experience has become more important to a brand’s bottom line — and reputation — than ever before.
A new research report conducted by UPS Capital, Personalized Shipping Experiences: The Next Frontier for eCommerce, shows that personalized shipping experiences have emerged as the next frontier for SMB retailers looking to provide an excellent customer experience in the wake of these supply chain disruptions. With consumers feeling increasingly worried about missing and damaged packages, SMB retailers that adopt personalization methods — from real-time package tracking and multiple delivery options to an omnichannel ecommerce approach — can improve both their bottom line and provide peace of mind for consumers.
Here are three ways SMBs can deliver a more personalized shipping experience to build a happier, more loyal customer base.
Explore options for personalization beyond delivery speed.
While two-day shipping has long been considered the ecommerce “gold standard,” today’s consumers have different priorities. The vast majority (80%) of consumers in the study reported they would prefer other perks — such as picking which day their package arrives or electing shipping insurance — over two-day shipping or free shipping. Offering different shipping speed options is no longer enough to differentiate.
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It’s becoming increasingly clear that supply chain risks and shipping mishaps are top of mind for today’s consumers. Incidents that happen in the last mile — such as damage, loss, or theft — are a driving force behind what prompts consumers to leave negative reviews and take their business elsewhere. In fact, according to the report, the #1 reason a shopper would bother to leave a negative review is if their package was damaged or never arrived.
The report also notes that the majority of consumers (69%) are willing to pay for the ability to personalize, control and up-level their shipping experience. Further, consumers asked to identify the most important perks to personalize their shipping experience prioritized the ability to track packages in real time (74%) and pick the exact package arrival date (72%). Beyond these two perks, the majority of consumers would also like access to multiple cost-affordable delivery options and the ability to add shipment protection guarantees for lost, stolen or damaged items. In short, consumers are now looking for more unique shipping perks from online merchants, and meeting these demands will present an opportunity to differentiate.
Prioritize mitigating theft through personalization.
Since the pandemic began, UPS Capital has witnessed a 65% increase in paid claims,[1] which may indicate a rise in shipping mishaps, damage and theft amidst supply chain volatility. Over 210 million packages disappeared from porches across America in 2021, showcasing that porch piracy has been on the rise since the pandemic and plays a major role. Giving consumers more opportunities to protect the items they order online will help quell increasing last mile anxieties.
Businesses can mitigate theft and provide peace of mind for consumers by offering different delivery options. These delivery options can include package delivery lockers, alternate delivery locations available through the UPS Access Point® network and customer signatures for high-value items. Another option is enabling consumers to pick whether they prefer a home delivery or delivery to another safer location, such as their office, for specific goods. Providing more personalized delivery options for consumers gives them more control — allowing them to better protect high-value or more breakable shipments.
Given these rising concerns of potential loss and damage, the report found that there are consumers willing to pay to personalize their shipping experience to help mitigate risk. Of the 69% of consumers interested in personalizing their delivery experience, 34% said they would pay $20-$30 per year, and 14% would pay $40-$60 per year.
Offering flexible options to shop online and in-store.
While the pandemic steered consumers toward online shopping, SMBs are starting to see some of this demand shift back to retail locations. According to the Digital Commerce 360 analysis of U.S. Department of Commerce data, offline retail sales grew 8.2% year-over-year in Q1 2022, showing elevated sales growth from pre-pandemic times.
To meet this demand, SMBs are pivoting to pursue a robust omnichannel ecommerce strategy, designed to reach a variety of consumers where they are the most active, including social platforms, ecommerce marketplaces, their website and brick-and-mortar. Retailers looking to gain a competitive edge should prioritize an omnichannel approach that meets consumers where they are and creates a seamless delivery and exchange experience, whether that starts or ends online.
It’s important to note that an omnichannel approach can work for retailers of all sizes. For example, a smaller retail store can serve as a point of discovery for consumers, whereas that retailer’s website and online marketplaces can serve as points of purchase for consumers looking for expanded inventory and delivery options. The key is to create an experience that caters to all consumers. By giving consumers these additional personalized options, SMBs can create a better customer experience.
The Future of Ecommerce
While the desire for personalization is nothing new, to date ecommerce businesses haven’t prioritized the shipping experience as the place to innovate and offer consumers more options. Savvy SMBs that work to deliver on these emerging last-mile preferences may see it pay off as a major competitive differentiator. In this new landscape, the key will be to mitigate risk and give consumers more options.
[1] Figures are based on aggregate insurance claim payment data collected by UPS Capital Insurance Agency, Inc. during the three year calendar period from 2019-2021.
2 www.digitalcommerce360.com/article/quarterly-online-sales. Source: Digital Commerce 360 analysis of U.S. Department of Commerce data; May 2022
Eduardo Lopez-Soriano is VP of Marketing at UPS Capital, the shipping experience and insurance division of UPS. UPS Capital leverages 100+ years of supply chain expertise to help customers anticipate and overcome shipping setbacks, protecting their reputation and bottom line with fast claims payment, expedited reshipment and more. Prior to joining UPS Capital, Lopez-Soriano was the VP of New Product Development at UPS, where he led an initiative to enhance UPS Weekend Services. Throughout his career he has held various marketing roles supporting the transportation and financial services industries in the U.S., Canada, Latin America and Asia Pacific, where he has led business process improvement projects for consumer banks and provided innovative products for SMBs. He earned his Bachelor of Science degree in Industrial Engineering from the Universidad Anahuac in Mexico and a Master of Business Administration from Duke University.
