Shipping delays can cause a lot of problems for online retailers. Unfortunately, they come with the territory of eCommerce. On average, 6% to 12% of packages experience delays, regardless of the carrier; this increases to over 30% during peak eCommerce package delivery periods, such as Christmas.
In January 2019, FedEx shipping delays hit 12.87% of deliveries from Canada to the US, while UPS shipping delays hit 16.16% in the same period on the same route. The same amount of USPS shipping delays were experienced, too. Even Amazon shipping delays have become more common in recent months as the COVID-19 pandemic has spread across the globe.
Unless you find a way to deal with delays, they can negatively impact on your online store's reputation, making it hard to land new customers and retain existing ones. Easyship can help you mitigate the problem with accurate, branded tracking emails and pages that will keep your customers updated on the status of their order.
We can also make the whole shipping process easier by giving you access to over 250 reliable couriers, and automating labor-intensive parts of the process such as creating shipping labels and filling out customs forms.
In this article, we’ll discuss what causes shipping delays, the negative impact of delayed deliveries on your business, how to deal with late deliveries, and how avoiding delayed deliveries can boost your customer lifetime value.
What Causes Shipping Delays?
Delayed deliveries can badly damage the reputation of an eCommerce store and break its customers’ trust. While this is the last thing that any online merchant wants, sometimes delayed deliveries are unavoidable. Here are some common causes.
1. Current Events
Global current events can have a big effect on shipping if they prevent supply chains from operating normally. We’ve seen this in the current global pandemic. Coronavirus shipping delays have been felt across the world, from China and Singapore to Italy, India, the UK, and the US. FedEx shipping delays (and those of other couriers) have increased due to lockdowns, curfews and other measures put in place by governments to help combat the disease.
If you’re concerned about managing your shipping in the current pandemic, visit the Easyship Covid-19 resource hub to learn more about how coronavirus shipping delays are impacting couriers.
2. International vs. Domestic Shipping
Congestion in airports and bad weather are some of the leading causes of international shipping delays. Customs issues can also hold up packages, which is why it’s important to ensure your customs paperwork for international shipments are properly and correctly filled in.
However, domestic shipping is more affected by traffic, construction, major roadblocks and detours, and accidents. All shipments can also be delayed by failed delivery attempts, high volumes (especially around holiday and peak periods), and vehicle trouble.
Holidays are prime time for eCommerce, and the industry often experiences huge spikes during this period. Of course, this means a huge increase in shipment volumes that can easily overwhelm couriers’ capacities, especially if they don’t have an adequate delivery network or system. This can result in delays at a time when customers most want to have their packages arrive on time.
4. Supply Chain
Problems with logistics top the list of the reasons for delayed deliveries. Most supply chain constraints arise due to lack of capacity to process orders or store goods, especially during holidays, peak eCommerce periods, or major sales. They can also occur during the last-mile journey to deliver the package to the customer's doorsteps if your shipping partners lack enough vehicles and workforce capacity.
You and your carriers will face customs requirements when shipping internationally. Unless all the required documents are attached and filled out correctly, customs may hold your package indefinitely or until the right information is presented.
Partnering with reliable courier services that stay on top of customs documents can help you navigate around customs delays. Don’t forget that Easyship can automatically generate customs paperwork for your shipments so that you can avoid customs delays as much as possible.
6. Incorrect Address
When a customer gives a misspelled or wrong address, or when the retailer fails to document the client's order properly, the delivery company may not have enough information to correctly deliver a package. This may result in shipping delays or the shipment not being delivered at all. So, make sure you’re correctly addressing your mail to avoid any problems with delivery.
How Can Shipping Delays Negatively Impact Your Business?
In the eCommerce retail space, a sale is not considered final when the buyer cruises through the checkout process, but rather, when the order arrives at the customers’ doorstep.
That means delayed deliveries can devastate your eCommerce retail operations due to the negative impact they have on your business. Here are some essential metrics you should know to help put the cost of late deliveries into perspective.
- 69% of buyers are less likely to shop in your store again if their purchase is not delivered within two days of the promised delivery date.
- 17% of buyers will stop shopping with an eCommerce retailer after receiving a late delivery once; 55% will not shop with the retailer again after two to three late deliveries.
- It will cost you five to 25 times more to acquire a new customer than retain an existing one.
- Loyal customers are worth up to ten times as much as their first purchase, and a 5% customer retention increase can boost your profit by 25% to 95%.
The Real Cost of Shipping Delays
The cost you incur to convince a potential customer to buy a product or service is known as the customer acquisition cost (CAC), which includes the cost of sales, advertising, and marketing. You won’t make a profit if the acquired customer spends less than your CAC.
To arrive at your CAC, divide the amount spent on acquiring new customers during a specific period by the number of customers acquired. For example, if you spend $100 to acquire four customers in one week, then your CAC is $25 for each new customer.
The customer retention rate (CRR) is the percentage of customers you can keep during a specific period. To arrive at your CRR, subtract the number of new customers (N) from the number of customers at the end of the period (E). Then, divide the resulting number by the number of customers at the start of the period (S), then multiply by 100 to get your percentage. This is usually less than 20% for most industries.
CRR = [(E-N)/S] X 100
Customer lifetime value (CLV) predicts the total revenue your business will receive from one customer over your entire business relationship. The longer a customer continues to buy from your eCommerce store, the higher the CLC. It is, therefore, imperative to retain customers. Here is how you can determine your CLV.
CLV = average purchase value X average purchase frequency X average customer lifespan.
Late deliveries decrease your customer retention rate, which then reduces your customer lifetime value drastically. Perhaps more importantly, delivery delays increase your customer acquisition cost due to negative reviews, which make it harder to acquire new buyers.
Amazon and Shipping Delays
The impact that the COVID-19 pandemic has had on retail giant Amazon and its operations are a good example of the cost of delays. Thanks to government regulations, out-of-stock items in essential product categories, and restrictions on non-essential categories, Amazon shipping delays are very common at the moment.
The company has been forced to make many changes to its shipping policies, which has significantly increased the cost of Amazon’s shipping (and negatively affected their customer metrics) and resulted in unprecedented Amazon shipping delays that customers have become disgruntled about.
6 Tips for Dealing With Shipping Delays
Despite having done your best to streamline your business processes and shipping operations, delayed shipments will still, inevitably, occur. Regardless of what causes it, your customer will always see it as a problem, and you risk losing them to the competition unless you step in quickly to ease their frustration. The secret lies in having the right response towards such delays so that you can protect your brand reputation. Here are some tips you can use to deal with shipping delays.
1. Communicate with your customers
The first thing you should do to deal with delays is to contact your customers and explain the reasons why they're not receiving their oders on time. While using emails or a dedicated response channel like Facebook Messenger are good options, making direct calls to your customers is a better option. You’ll be able to offer a personalized solution to the problem, and your customers will appreciate the extra effort you have made to call them. Discuss every detail of the order delays and give them an estimate of when to expect their package.
2. Offer free shipping
Free shipping can help you lower your customers' expectations for faster shipping. Your customers won't expect same-day delivery, or next-day delivery if you offer free shipping. Having lowered their expectation, you can then do your best to improve your shipping times and avoid any delays so that you tap into the competitive advantage that comes with faster shipping.
3. Shipment tracking
A shipping method that enables you and your customers to get tracking information in real-time can reduce the anxiety and frustration that comes with delays. Sharing the tracking number with your customers will enable them to check the shipping status themselves and see where their package is. Easyship gives you the ability to offer branded tracking pages that give your customer a 360-degree branded experience and easy tracking for their orders.
4. Partner with domestic suppliers
Working with suppliers who have warehouses in your target countries can help reduce delayed deliveries because they can fulfill your orders from the closest warehouses. This will help you avoid delivery delays and reduce the shipping times for your products. Easyship works with warehouses across the globe, so we can help you make sure your goods are in the right place to reach customers.
5. Provide offers and discounts
Offering coupon codes or inexpensive gifts to your customers can help neutralize their frustrations. While this will cost you a little money, it’s much cheaper than having your customers slap you with bad reviews that can turn away hundreds of potential customers.
7. Package stuck in transit
If a vehicle is experiencing breakdown issues, web-based tracking can help identify the problem and dispatch the nearest driver to deliver the packages to the final destination. Also, calling your customers to inform them of the possible delay before they notice it will help deal with the situation.
Easyship can help you mitigate the problem with accurate, branded tracking emails and pages that will keep your customers updated on the status of their order. We can also make the whole shipping process easier by giving you access to over 250 reliable couriers, and automating labor-intensive parts of the process such as creating shipping labels and filling out customs forms.
Avoid Shipping Delays and Boost Customer LTC
You can save your eCommerce store from the devastating wrath of unhappy customers by putting customer retention practices in place to communicate and help your customers understand the problems and the solutions you are implementing.
This will help reduce the negative effects of shipping delays on your business. Engaging the services of a well-established and trusted shipping partner like Easyship could help you make some strategic moves to navigate delayed shipments, especially during the COVID-19 pandemic.
Last update July 26, 2020 to reflect new information