It is no secret that mobile shopping is the newest ecommerce trend. According to a recent stat by Forrester Research, 16% of consumers purchased via their mobile device over last year’s Thanksgiving Weekend. What you may not know is how companies are capitalizing on this latest trend. It wasn’t very long ago that most people would never think of shopping, doing their taxes, etc with their mobile device. The sheer amount of information now available at your fingertips or should I say on your smart phone is truly amazing. Now there are mobile companies out there that can not only tell you where to get the lowest price but when you should make the purchase! Yes, you heard that right. Don’t ask me how this technology works but let’s just say there are companies out there that have built some incredible algorithms.
Decide (decide.com) is one of those companies that are taking Mobile shopping to the next level. Their company mission is to be a service dedicated to helping consumers buy electronics with no regrets. Their mission sounds simple but the technology behind it is anything but. The free app that is available for both the iPhone and Android phones helps you decide when to buy. Decide advises you to buy or wait depending on their proprietary price and model predictions. They state that their predictions are right 77% of the time. Here is how it operates on your smart phone: when you are in a store, you would scan the UPC barcode on the product and the Decide App will then give you a green “thumbs up” saying you should buy or it will give you a red “hand” telling you to wait and purchase later. They also have the ability to send you alerts on future product purchases so you can be alerted about price changes, product releases or even rumors! In this economy more than ever consumers are looking for ways of saving money and this is just one potential ways companies are helping consumers do just that. Go here to download their free app: http://www.decide.com/mobile The next generation for the ever growing ecommerce business for many retailers is Mobile Business. This is a dynamic segment as it allows companies to expand their brand and build customer loyalty by allowing their consumers to take them wherever they go. There is no better time for companies to launch a Mobile Business segment as the numbers of consumer Smart Phones are rapidly increasing. In fact, we are at a place in the US where the number of cell phones is outnumbering the US population. Just like when companies starting doing business online, there of course will be the naysayers who can’t believe consumers would buy certain products from their Smartphone, iPod, iPad or other device. If there is ever a company that is use to these naysayers it would most likely be an online Jewelry company. Some old school consumers may have a hard time believing a person could buy a piece of Jewelry off the internet while not have the privilege of touching or holding it in an actual Jewelry store. One such company has not only helped disintegrate those fears but has taking buying Jewelry to the next level through their Mobile Applications. Click on the link below to find out more:
http://www.bluenile.com/mobile_applications.jsp More than ever before online retailers are using free shipping as a marketing tool to increase revenues. As a result many companies are feeling the pressure to offer free shipping to their customers which may or may not be a good idea. In order to understand whether it makes since for you, we must first understand why it’s offered to begin with. To be completely blunt, it is offered because it works and the #’s back it up. In a recent comScore report, three-fourths of consumers surveyed said they abandon retailers at checkout if shipping isn’t free.
Here are four key ways to understand this fast growing free-shipping trend: 1. The importance of free shipping is growing. ComScore reports that free shipping accounted for an incremental 6 points of all transactions in 2009. As more companies are offering it, the pressure to compete intensifies. 2. Shipping costs are the most common reason for shopping cart abandonment. Many times consumers don’t understand the true cost of getting their products shipped to them, and as a result shipping becomes a weak link in the check out process. Forrester Reseach surveyed online shoppers and found that Forty-four percent balked at the price of shipping and abandoned their shopping cart. 3. Customers tend to spend more when they receive free shipping. Amazon.com is a great example of a company that has proven this is indeed true. They have been quite successful in getting their customers to purchase one more item in order to hit the free shipping threshold. A comScore survey of Holiday (4th quarter) spending in 2010 showed that the avg. order on free-shipping purchases was $110, compared with $95 for non-free shipping purchases. Now this may not seem like a big difference but the numbers start adding up fast! 4. Free shipping boost sales when offered as a special. Stamps.com put out a survey of online retailers in October of 2010 and found that 64% stated that “some type of free shipping promotion” with or without a minimum spend is the most effective promotion they can offer to drive sales during the Holiday season. From the online retailer’s perspective there really is no such thing as free shipping. Large online retailers such as Amazon.com or LL Bean can absorb the added cost due to the economies of scale they have. If you are not a large behemoth of a retailer, how can you survive? Many smaller retailers understand that people will buy more if they offer free shipping, but they can’t afford to absorb all of the shipping costs and never pass any of them along to the customer. The good news is that with free shipping comes options. Actually, offering free shipping on every order all the time is the exception rather than the rule. Here are six alternatives to offering free shipping all the time: 1. Flat rate. Many companies set up thresholds where if you exceed that threshold the shipping is free and below the threshold it is a flat rate. Macy’s ships all online orders of $99 or more for free. For order that fall below, they charge an $8 flat fee. In addition, companies that offer flat-rate shipping typically send those orders via ground delivery to keep their costs under control. 2. Shipping club. Many retailers offer customers the option of paying a one-time fee in order to receive free shipping or faster shipping. Amazon was the first to use this strategy but now other companies have caught on. 3. Optional upgrades. Online retailers are giving their customers the option to upgrade to a faster service for a fee which is usually between $3-$6 unless it is a large shipment. This allows the retailers to set the proper expectations in terms of delivery times and also gives decision making power to their customers, which is always a good idea. 4. Free shipping for minimum purchase. Many retailers now provide free shipping with a minimum purchase. This is becoming much more popular in the ecommerce industry. 5. Free shipping on eligible products. This option is often offered with products with higher profit margins or on products that a retailer wants to promote. 6. Free shipping for a limited time. A survey by the E-Tailing Group found that nearly 9 out of 10 online retailers offered some form of free shipping during the holiday season last year. Free shipping also works well to help move more products that are out of season. Today I present to you a great whitepaper on E-Commerce Shipping created by ShipRush. ShipRush is an award-winning, free, shipping soft-ware published by Z-Firm LLC. ShipRush integrates with e-commerce marketplaces and shopping carts to eliminate copy/paste and simplify shipping. Enjoy!
When selling online, the cost of shipping is a key factor. On one hand, it is important that buyers pay an amount that covers your shipping costs. On the other hand, you don’t want to lose buyers who “abandon” their cart when they see the price of shipping. So, how do you walk that fine line? Let’s review the two sides of shipping for e-commerce sellers: Pre-Sale: This starts in the cart and continues all the way up to the moment the buyer presses the final “purchase” button to complete the sale. Your cart needs to figure out how much to charge the buyer for shipping. Post-Sale: The buyer has checked out. Now you are going to handle the actual act (and cost) of the shipment. In this article, we talk about the pre-sale side of shipping. Here are some pre-sale shipping options to consider: · Flat-rate shipping · Indexed shipping · “Free” shipping · Calculated shipping Flat-rate shipping is easy. You set a rate and that is it. Say you sell a pretty uniform item, like sweat-shirts. You could have a basic shipping charge of $8, and that is that. It might be $8 per shirt, or it might be $8 per order. Another method that can be used is to index the shipping cost to the order amount. For example, charge $10 shipping for the first $100 purchased; $18 for the next $100 purchased, etc. But, this option only works if your items are relatively uniform. If you sell items of different sizes and weights, this option probably isn’t the best alter-native as the shipping cost for a 2-pound item is very different from that of a 25-pound item. “Free” shipping is the most basic form of flat-rate shipping. With “free” shipping, you, the seller, builds the shipping cost into the item cost. This lets you advertise “free shipping” on your web store and in the checkout flow, but – as you and everyone else knows – nothing is really free! The shipping cost has been built in elsewhere. Some e-commerce merchants offer a hybrid approach and offer flat rate shipping up to a cer-tain dollar value and free shipping for orders over that dollar value. Calculated shipping requires more work. To estimate shipping cost accurately the e-commerce system needs to “do the math” to figure out the shipping cost. This means it needs item weights and dimensions so that it can calculate shipping using the FedEx® rate calculation application programming interface (API). This works great for single items, but can get quite complex for multi-item purchases. For ex-ample, one sweatshirt or three sweatshirts might all fit into the same box, only changing the weight a little. But, if the order is for laser printers, it will be one printer per box, no matter how many are ordered. While calculated shipping makes sense to the seller, the downside is that it may be less appealing to savvy web buyers who want a low shipping cost and want to know what the ship-ping cost will be before they start the checkout process. Calculated shipping also requires the e-commerce system to “know” a lot about the items being purchased before it can perform the calculation. Armed with an understanding of pre-sale ship-ping, you’re ready to pack and ship. Stay tuned for Part 2: post-sale shipping! More consumers today are finding it easier and easier to shop online, thus bypassing the traditional brick-and-mortar stores. Ecommerce is a great revenue stream for companies and gives companies the ability to enter and play in the social media arena as well. At the same time ecommerce can create a different set of challenges to companies as well. The task of comparison shopping is now much easier for your customers who no longer have to drive all over town to compare your price against your competitor’s price. Price has been and will continue to be at the top or at least near the top of buying motives for online shoppers. However, companies cannot be fooled into thinking that price is the only concern for the consumer. Consumers today have three main concerns outside of price when buying online:
1. Shipping Cost 2. Delivery Time 3. Return Policy How you handle these three buyer concerns can and most likely will be the difference as to whether customers purchase from your site or your competitors. Now let’s dive a little deeper into these three concerns. Shipping Cost- Forrester Research, an independent technology and market research company did a study on how shipping costs affect consumer buying decisions. They found that 61% of the people they surveyed would buy online more often from retailers that offered Free Shipping. More and more companies are capitalizing on this and either creating or expanding their Free Shipping program. Consumers are smart enough to understand that nothing is necessarily free and when companies offer Free Shipping, they may already be factoring it into the price of the product. Additionally, companies that have successful Free Shipping programs often utilize lower-cost shipping options available to ensure they are using the most economical option available. Transportation and Supply Chain companies can often provide some assistance with benchmarking what other companies are doing. Are you utilizing Free Shipping to drive top line revenue? How often do you review your shipping program? Delivery Time- A second question consumers buying online often have is how soon will my shipment arrive? There is often great anticipation for the order to arrive and having an accurate delivery window is a great way to satisfy your customers and ensure they become repeat customers. Studies show that consumers do prefer faster shipping but at the point that shipping cost more, their priorities may change. Amazon Prime is a great success story in terms of offering a transit speed upgrade program. It is a shipping program that Amazon.com launched that gives their customer’s unlimited fast shipping for an annual fee. Amazon has noticed that the growth as a result of this program was not in attracting more consumers to the site but getting them to come more often to purchase. Their Sr. VP and CFO Thomas Szkutak said“We're seeing customers do a lot more cross shopping than they have previously.” Do you provide your customers with an accurate expected delivery window? How often do you review this? Do you give your customers options to upgrade to a faster delivery? Return Policy- A no-hassle returns process is critical for both customer satisfaction and customer loyalty. In addition there is a strong relationship between return policies and customer purchasing behavior. When consumers first started shopping online, returns was a very big concern. Many people did not feel comfortable buying someone without first having touched it. Although companies have come a long way since then, companies often struggle to provide just the right return policy that is not to stringent to prevent customers from buying from them while at the same time not motivating their customers to return their products. A fairly recent survey found that 69% of consumers would not likely shop again with an online retailer if the returns process was inconvenient. Returns can also be a big headache for a company as well as there is money tied up not only in the inventory but in the labor to handle the returns as well. The more automated and easier you make the return process the more satisfaction your customers will enjoy and will get you a better chance to turn them into a repeat customer. How convenient is your Return Policy? How often do you review your Return Policy? |
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