Click ‘add to cart’. You’re on a roll! Buying all those things you want, but which, if you’re honest with yourself, you sometimes neither need nor can afford!
E-commerce websites spend millions of pounds each year on ‘tricks of the trade’ that make you subconsciously more likely to click on the ‘buy’ button and complete your transaction.
Interface design is a detailed science which uses a range of research and other techniques. These include using personas to mimic different types of user behaviours and split testing; serving alternate versions of the same page. These split-tests help to optimise the page by constantly refining the design to incorporate the elements that make the users most likely to ‘click-through.’ The size, shape, position and even the colour of the ‘click to buy/add to basket’ button all have an unconscious bearing on the user’s decision.
As users progress through the purchasing journey, the shipping costs often become a major drop-out point for online retailers. The evidence tends to suggest that ‘free shipping’ generates a higher click-through rate. Five pounds seems bearable depending on the value of your purchase, but carts tend to get abandoned once the prices start to climb higher.
According to global statistics*, more than three-quarters of baskets are abandoned as a matter of course, with the number one reason ‘unexpected shipping cost’ at 25%, followed by ‘required to register and create account’ next at 22%.
So how do businesses address this?
What this means for retailers is that shipping – and this point in their online process – is crucial to any e-commerce business. When you further realise that orders are increasingly being fulfilled and delivered all over the world, the question of retail expenses can begin to be intriguing; how do organisations try to keep shipping costs low – for them and their customers?
Traditionally, e-commerce companies have tended to use the main global courier companies.
These massive multi-billion dollar organisations have established staggering global networks capable of handling millions of parcels a night. The infrastructure of these organisations is astonishing. Some of the largest airlines in the world belong to courier companies, and parcels can pass through up to ten depots and hubs in the couple of days before they reach their final destination, all of which sounds very expensive; and it is!
However, there is a new solution emerging: one which makes it both cheaper and reduces the volume of those abandoned carts based on shipping cost.
It’s called Direct Injection.
This model injects parcel volume directly in to the port of entry of the destination country. In most circumstances parcels are labelled in the UK before export with the chosen domestic courier network for the destination country. Volume is consolidated, sent via air cargo on scheduled flights to the port of entry, cleared at customs and handed over to the domestic network for distribution.
Parcel data is connected, enabling the e-commerce business owners and their end user customer to view end-to-end tracking and have full visibility of progress and estimated times of arrival. Since around 30% of e-commerce products are returned, a returns strategy is an important consideration, which we’ll report on in a future blog.
There are numerous organisations that offer this type of service, but there are some serious considerations to ponder prior to making a decision.
Due to the array of different and complex customs processes globally, most suppliers in this field are specialists to certain country destinations. Some offer a global service, though they are essentially ‘consolidators’ re-selling via other, specialist suppliers.
Under these circumstances, prices vary considerably and it is very difficult to know if you have established the best deal without the kind of market visibility that comes from seeing multiple pricing structures and tender submissions for a range of different clients.
Larger e-commerce companies, especially clothing ‘e-tailers’ have cottoned on to this proposition and now ship large volumes, saving themselves millions of pounds per year. These companies are smart too; they have also recognised that cheap global shipping has opened the door to a global market and they have seen revenues climb substantially as a result.
All of which has not gone unnoticed: the global parcel giants have also gone shopping, snapping up direct injection organisations for themselves to capitalise on the opportunity. Expense Reduction Analysts are experts in this field and have already helped clients navigate through this complex arena and established savings of nearly 60% in doing so.
To be sure you are selecting the optimal shipping solution for your particular requirements, you need independent advice from a specialist with visibility of the market and the right experience. Get in touch to find out how we can help you with the whole e-commerce process including Card Payments, Packaging solutions and IT & Telecoms.
Article by: Simon Perkins