It is crystal clear that retailers are facing increasing shipping costs year over year with virtually no end in sight. Titans like Amazon have set the bar low for price, and high for customer experience and speed of delivery. And, in recent years competing retailers are trying desperately to keep up the pace.
A few years back, it was acceptable to get your package within 4-5 days. Amazon changed that with their Prime free shipping benefits and improved the average delivery time to 2 days for most of the U.S. Now, retailers of all shapes and sizes are trying diligently to compete with that benchmark, which comes with a hefty shipping cost-per-product. The cost of that product, convenience and speed of delivery is catching up with retailers who are trying to maintain what declining market share they have left against Amazon.
Amazon’s Prime Day now accounts for more revenue than Cyber Monday and Black Friday combined. More than $4 of every $10 spent online in the US is on Amazon.com, and their number of deliveries topped more than 1 billion in 2017, according to the WSJ. Just as it seems other large retailers are hitting the 2 Day delivery mark, Amazon comes back to disrupt the industry with Next Day and Same Day deliveries while keeping the cost-per-product low for the Amazon customer.
So, as a retailer, can you compete with the rising shipping costs year-to-year?
Yes… yes, you can. Stay informed and utilize all the resources already available to you…
- Analyze and benchmark your current supply chain and costs, so you know what needs to be improved and what is already working and not working.
- Utilize the resources within your company to show you the problems you may not see from your C-Level suite. Go have a chat with the customer service group– they know your customer better than anyone else.
- Have a chat with your transportation and logistics group and find out the challenges they face each and every day working to improve service while at the same time trying desperately not to increase the cost of shipping.
We’ve seen companies time and time again not notice and fully understand their shipping costs until they start losing their customers because of it. Amazon will, no doubt, continue to innovate by finding new ways and places to compete. As a retailer, you need to invest in the right people and skills to provide an authentic experience that your customers will truly value. You can then be successful & can thrive with confidence.
What do you think?
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