Ecommerce businesses that are focused on hitting growth goals in 2021 will need to pay close attention to the latest trends in logistics. Without a sound logistics strategy and the ability to implement new strategies and solutions, it will be a challenge to continue to meet customer expectations and scale your business.
The ShipBob team is continuously looking for ways to help ecommerce brands and retailers improve their fulfillment and logistics operations by sharing important data and industry trends around shipping and delivery.
To help you optimize your logistics strategy, here is an overview of the latest ecommerce shipping trends and statistics to help you stay informed, so you can grow your business and continue to improve the customer experience.
The Latest Ecommerce Shipping Statistics and Trends
To meet customer expectations, it can be a challenge to offer affordable and fast shipping options without a proper fulfillment strategy in place.
Fortunately, there are ways to offer better shipping incentives, such as free shipping, while simultaneously reducing shipping costs and speeding up transit times — even if your customers are scattered across the country.
Here is a deeper look at the latest shipping statistics and trends:
1. The Benefits of Offering Free Shipping
68% of US online shoppers surveyed stated they didn’t make a purchase more than half of the time if the brand didn’t offer free shipping. Based on this data, it’s clear that offering free shipping is worth it if you want to boost your sales and reduce cart abandonment.
Offering free shipping has proven to:
- Increase average order volume (AOV) by 97%.
- Reduce cart abandonment by 18%.
To offset the costs, most often you’ll see bundles, upsells, or a minimum spend threshold offered in exchange for free shipping.
Additionally, it’s worth noting that free shipping is the only top website banner that matters from a conversion rate standpoint, and it also makes for a great messaging strategy that can be shared across other channels, including email and social media.
2. The Benefits of Distributing Your Inventory
In the contiguous US, shipping carriers use shipping zones to measure the distance a package travels for domestic shipments — with the point of origin being Zone 1 and the destination being as far away as Zone 8. The higher the zone, the more it will cost to ship an order.
While shipping can be expensive, data can help you reduce costs and time in transit. You can use historical order data to help you identify where your customers are located, so you can adopt a distributed inventory model (i.e., splitting inventory across multiple fulfillment center locations).
Distributing your inventory has proven to:
- Reduce shipping costs by 25%.
- Bring 13% cost savings to your bottom line.
For example, the chart below shows how splitting inventory across three locations (compared to using one location) can contribute to a reduction in average zones — which can significantly reduce shipping costs while speeding up transit time.
To reduce shipping zones and costs, you can:
- Analyze historical order and zip code data to reevaluate your optimal fulfillment locations.
- Determine if a more central location would benefit your business if you’re often shipping from one side of the country to the other.
- Calculate what your shipping costs would be if you went from one fulfillment center to multiple locations (and what the additional transportation, receiving, and warehousing costs would be for each additional facility).
Throughout the COVID-19 pandemic and recent severe weather events, we’ve seen another advantage to distributing inventory: the ability to reduce risk in case an outbreak happens and a single fulfillment center gets shut down.
The Latest Ecommerce Delivery Statistics and Trends
The truth is ecommerce businesses don’t have much control over a customer’s order once it is in the shipping carrier’s hands. But what happens during the shipping and delivery process greatly impacts the customer experience.
Therefore, it’s important to do your best to keep your customers informed on carrier updates and shipping delays.
Additionally, we’ve seen the ability to launch into new international markets become more accessible, especially as more third-party logistics companies start to offer international fulfillment capabilities — and the latest ecommerce growth statistics prove there is plenty of opportunity to expand your business into Canada and across Europe and the UK.
Here is a deeper look at the latest delivery statistics and trends:
1. The Importance of Keeping Up With Carrier Trends
In the event that there are major shipping delays, as long as you’re doing what you can to communicate with your customers, they’ll likely be understanding.
What we’ve learned from 2020 is that being upfront and keeping customers in the loop will go a long way, and it’s something to always keep in mind moving forward.
Looking back at 2020, holiday promotions started earlier than ever, as shipping delays were a top concern. Between the COVID-19 pandemic and the media-coined ‘Shipageddon’ changing things daily, many ecommerce businesses experienced major challenges.
Moving forward, here’s what you can do to keep customers informed and gain some control over the delivery stage:
- Look at shipping carrier transit data (this is provided by ShipBob weekly) to understand carrier performance and share it with your customers.
- Cut out certain services or carriers that aren’t meeting expectations or able to keep up.
- Include potential shipping delays that are outside of your control on your website, your order confirmation page, your confirmation email, and other important touchpoints.
Below is an example of what ShipBob shares weekly. The first chart shows FedEx Ground’s average transit time throughout the COVID-19 pandemic including the holidays, as compared to its pre-COVID average transit time:
The second chart shows that USPS carrier delays surged in Q4 2020, with the final dot on the chart below showing the last week of December. This resulted in packages taking more than four days longer in transit than they would have taken before COVID hit.
2. The Latest Ecommerce Growth Statistics Worldwide
Although ecommerce has been growing for years, the pandemic sped up the growth at a rapid pace. What we’re seeing in the US is also occurring across the world.
If you’re considering launching into international markets, here are some key ecommerce growth statistics worldwide worth noting:
- European ecommerce sales are projected to reach 717 billion euros in 2020.
- The UK makes up a fair share of total sales (17.8%), followed by Germany and France.
Selling in Europe means access to 27 countries, enabling you to bring products to less saturated markets, meet international demand, and grow your online brand.
Additionally, Canada also showcases a big opportunity for ecommerce expansion. Canadian buyers are expected to spend over $55 billion by 2023.
In addition to distributing inventory across the United States, you can store your inventory in multiple countries to reduce transit times for local deliveries. Global fulfillment also reduces the customs and tariff issues with the ability to bulk ship inventory to a warehouse within a different country, so customers within that country can have an order shipped domestically.
The ecommerce industry is constantly changing, but based on the latest industry trends and aggregated data from the last several years, ShipBob continues to see the following shipping and delivery best practices worth implementing:
- Offering fast and affordable shipping options is a must. By implementing a distributed inventory model, you can easily reduce shipping costs and transit times in order to meet customer expectations.
- Finding ways to offer free shipping has been proven to improve sales conversations and reduce cart abandonment.
- What COVID-19 has taught us is that keeping track of carrier trends is essential, and it is a best practice worth implementing moving forward to help customers stay informed.
- There is plenty of opportunity to take your business international as the global ecommerce industry continues to grow.
Written by ShipBob
ShipBob is an international 3PL with a growing distribution network and best-in-class technology. With ShipBob, we make it easy for you to outsource the entire order fulfillment process while saving on logistics costs.
We don’t just store your inventory and pack and ship orders — we provide the infrastructure, data and analytics, support, and expertise to help you optimize your logistics strategy so you can continue to grow your business.