Amazon Retail Pressure
Amazon is putting pressure on retailers, and failure to provide competitive shipping options is costing online them business, according to a new survey of merchants and consumers conducted by e-commerce platform BigCommerce.
Half of the nearly 3,000 consumers surveyed said they avoid retailers that do not offer free shipping, and 84% said they’ve specifically made a purchase because shipping was free.
From the merchant’s side of the equation, shipping costs are a huge concern. Only 13% of stores offer free shipping on every purchase, and 68% say Amazon’s shipping practices put unfair pressure on independent retailers.
These are just a few of the interesting results of the survey, covering a wide range of ecommerce topics, including shipping, returns, sustainability, Amazon and more.
Matt Crawford, GM of Shipping at BigCommerce, says predictive analytics are key.
“Understanding the customer profile, such as where they are located and what products they are buying from what channels, then marrying it with external data, brings invaluable insights to a merchant,” he says.
“If a shipper can accurately predict what is going to be purchased and where it will be sent, they can materially reduce their costs to fulfill an order by holding less inventory, closer to the customer, shipping it faster and at a lower price point.”
For example, he says, imagine the benefit for a merchant fulfilling out of Los Angeles, who knows their holiday orders will mostly come from the Northeast.
“Instead of shipping everything via Ground at $15 per box (and taking 5 days), they can find space with a 3PL like ShipBob or others, in Pennsylvania, and offer next day arrival for 50% less.”
Just merchants are not required to offer a customer-friendly returns policy, merchants will never feel compelled to leverage predictive analytics, allows Crawford.
“But, without predictive analytics and a singular view of customer data across all different channels, they’d be playing at a notable disadvantage,” he says “Shippers should be getting into the predictive game if they haven’t already.”
BigCommerce Study: More Than Half of Online Shoppers Have Stopped Shopping With Retailers Due to a Negative Shipping Experience
Global Survey of Digital Consumers and Merchants Explores Shipping’s Growing Role in Ecommerce
BigCommerce, the leading ecommerce SaaS platform for fast-growing and established brands, has released Shipping, Delivered: Best Practices & Expectations for 2019 – a new research study that examines survey responses of nearly 3,000 digital consumers and 800 online merchants to understand the role that shipping plays in the consumer purchase journey and how brands are adjusting operations to meet shifting expectations.
The study concludes that, while ecommerce and shipping have a symbiotic relationship, shipping often becomes an afterthought for online retailers. For customers, however, a brand’s shipping experience can carry just as much weight as the product it sells and how it is marketed to them. An alarming 77 percent of global survey respondents have abandoned an online purchase due to unsatisfactory shipping options, while 58 percent have actually stopped shopping with particular retailers altogether as a result of negative shipping experience.
“Retailers need to take into account a number of critical factors to make a meaningful difference in ecommerce shipping, and finally bring it to a level playing field with the rest of the ecommerce experience,” said Jimmy Duvall, chief product officer at BigCommerce.
“This new report provides merchants with valuable insight into consumers’ shipping expectations, and best practices to create experiences that drive conversion and continued loyalty.”
In the global report, BigCommerce details key findings, including:
Keeping Up With the Amazon’s
The mass adoption of Amazon Prime’s free two-day shipping, as well as similar efforts from big-box retailers like Walmart and Target, have changed consumer expectations. In the past 12 months, 84 percent of global survey respondents have made a purchase from an online retailer specifically because it offered free shipping, and half of the respondents said that they avoid shopping with retailers that do not offer delivery at no-cost.
Turn Free Shipping Into Revenue With Millennial and Gen Z Shoppers
Free shipping can make online shoppers feel like they’re getting a deal – even if it means spending more to get it. In the last 12 months, eighty-four percent of global consumers have added items to their cart in order to receive free shipping.
From a generational viewpoint, nearly 90 percent of Millennial and 85 percent of Gen Z respondents indicated they have added items to their cart solely to hit a minimum order threshold for free shipping, with about one-third (33 percent) of Millennials admitting to ‘doing this all the time.’
The Amazon Effect: Merchants Struggle With Consumers’ Evolving Shipping Expectations
Even before Amazon announced its rollout of free one-day shipping for Prime members, 68 percent of surveyed merchants felt that Amazon’s shipping practices put unfair pressure on independent retailers.
Keeping pace with Amazon’s shipping speed becomes even more challenging for the 80% of merchant respondents that handle their own product fulfillment rather than relying on a third-party logistics provider (3PL).
A Dysfunctional Relationship
Consumers care about shipping – so much so that it can make or break their perception of a retailer. But, there’s very little merchant recognition of shipping’s impact on sales; forty-seven percent of merchant respondents were unaware of their online cart abandonment rate, nor the percentage of cart abandonment caused by shipping options.
Additionally, the survey found that only 13 percent offer free shipping on all purchases, while a larger percentage (39 percent) give consumers free shipping on purchases over a designated dollar amount.
Convenience Trumps Sustainability in Shipping
While consumers aren’t currently too concerned in the effects ecommerce shipping has on the environment, they are open to making changes to ease some of the burdens – as long as the change requires very little effort from them.
Sixty percent of global consumers already recycle packaging from an online shipment ‘often’ or ‘almost always’, and nearly one-third of consumers would be open to driving to a physical store to pick up an online shipment rather than have it delivered directly to their house. Shockingly, roughly the same percentage of consumers (29 percent) have no interest in making any changes to the shipping process to help offset its carbon footprint on the environment.
For a complete, in-depth look at the shipping insights collected from consumers and merchants, download Shipping, Delivered: Best Practices & Expectations for 2019.
About the Study
BigCommerce’s consumer survey was conducted between April 25 – April 28, 2019, and was distributed to online consumers at least 18 years of age via SurveyMonkey. Responses were collected from 2,933 individuals living in Australia, the United Kingdom, or the United States. BigCommerce’s merchant survey was conducted between April 20 – May 10, 2019, and distributed to BigCommerce merchants through email and their BigCommerce control panel. Responses were collected from 776 BigCommerce merchants that have made at least $1 in sales in the last six months.
BigCommerce is the world’s leading SaaS ecommerce platform for established and rapidly-growing businesses. Combining enterprise functionality, an open architecture, and app ecosystem, and market-leading performance, BigCommerce enables businesses to grow online sales with 80% less cost, time and complexity than on-premise software. BigCommerce powers B2B and B2C ecommerce for more than 60,000 stores, 2,000+ mid-market businesses, 30 Fortune 1000 companies, and industry-leading brands, including Assurant, Ben & Jerry’s, Paul Mitchell, Skullcandy, Sony and Toyota.