Ship & Sip Unboxed: 2023 Trends and Research

Have you ever wanted to get insights from other business owners and industry experts about how they get ship done? Our twice-a-quarter event series, Ship & Sip allows you to do just that. Hi! My name is Erin and in addition to being the Manager of the ShipStation Community, I also have the honor of hosting Ship & Sip.

This month I sat down with some of the brightest minds in the industry to discuss ShipStation’s recent research report: Holiday Shopping Trends. In the report, we uncover how the current economic climate might impact your 2022 peak season. 

We were joined by Emilie Bingham, Communications Manager for Auctane, Kim Wren, the Senior Director of Business Development at SkuVault, Joe Rasmussen, ESB Sales Manager at Avalara, and Robin Smith, Co-Founder and CEO of VL Omni. 

How This Holiday Season Is Different From Last Year

Our research shows that there is definitely bound to be a mismatch between consumer and retailer expectations this holiday season. ShipStation found that American consumers anticipate spending $30 billion less during the 2022 holiday season than last year.

“Last year was largely defined by supply chain challenges. It was hard to get products. So when consumers came across them, they shopped earlier. They were more willing to kind of scoop them up, and retailers on the other side were really stocking up on inventory. So this year we have a different story.”

Emilie Bingham

As Emilie explained, this year’s challenges for retailers and consumers are not about the scarcity of products but fall under these three areas:

• Inflation: Inflation has surged to decade highs across the world as escalating energy, fuel, and food costs continually squeeze consumer living standards. 
• Cost of Living Crisis: The basic cost of living has increased faster than household wages. Things cost more but no additional income has been added to the pockets of most households.
• Fuel Costs: While the cost of goods has increased, we’ve also seen the cost to transport goods increase.

These factors put pressure on businesses to provide the perfect experience for their customers this season. Luckily our panel had some advice on how to stay ahead of the curve.

How Merchants Can Combat These Challenges 

50% of merchants expect online sales to increase this holiday season while 58% of consumers plan to cut back. While added costs will be absorbed by everyone from the manufacturers, to merchants, inflation will especially be passed on to customers. So, while merchants are glad that supply chain delays have started easing, consumer concerns have begun growing more than in the past two years. So how do you win this holiday season? While merchants are eating some of these added costs, there are ways they can make the holidays more affordable.

Transparency is Key 

Today’s cart abandonment rates can be as high as 78%. Our panel confirmed that right now there are many factors that have led them to abandon carts. Some of these factors include limited shipping options, additional fees for international customers, unclear return policies, or unexpectedly high shipping rates at checkout. 

“Be transparent about pricing from a tax perspective, especially when shipping internationally with customs and duties. I think clearly communicating that at checkout is big deal for many customers.” 

Joe Rasmussen

Focus on Delivering a Flawless Experience 

Since checkout is the last step of the customer journey, it’s often depicted as the most important step as well. Your checkout experience should be consistent with the rest of your site, be easy to navigate and be extremely clear to lessen the chance of abandoned carts. 

“I was at a conference recently, and they were talking about how many mistakes you can make in the buying process before you lose the customer. It used to be that you could make up to nine mistakes before you would lose a customer pre-pandemic, now it’s down to five.”  

Robin Smit

Our recent study found that 36% of US consumers say the cost of delivery is the most important factor impacting their online buying decisions. Our panelist Emilie took this a step further and asserted that in addition to the cost, consumers will be looking at the delivery experience as well. 

“It really all goes together, you know. Each of these is part of a full delivery experience, and for me, if any one part of that breaks if it’s delayed and doesn’t get there in time, or if it’s not a convenient delivery, or if it’s really hard to make a return. If any part of that delivery experience breaks, it makes me less likely to be a repeat customer in the future.”

Emilie Bingham

Review and Test Your Workflow Ahead of Time

The panel concurred that right now is not the time to implement new integrations or features. Now is the time to test your existing processes and make sure that you have set up your warehouse staff for success. As mentioned earlier there is a lower threshold for mistakes before your potential customers decide to leave.

“One of the things I would highly recommend is to use the QA process when you are packing your shipments to make sure that you’re sending the right items in the right quantity every time.” 

Kim Wren

As the holiday season comes to an end, we get ready for the new year. But ecommerce merchants have one last bit of business to clear up before moving fully into the new year: holiday returns. As unpleasant as dealing with returns can be, there is a silver lining. Customers that experience a good returns process are more likely to recommend your business to friends or to shop from you again. 

Don’t Lose Sight of Your Post Season Responsibilities 

It can be super easy to get wrapped up in the hustle and bustle of the season, but Kim had some solid advice, “Keep a notebook, keep something, write it down when you have an issue, put it somewhere. Review that weekly during peak, maybe starting at the beginning of October. Fix what you can as you’re going through, but you want to make sure that you’re tracking it because on January 1st you are not going to remember all the issues that you had.” 

As we’ve discussed in past Ship & Sips, you should always be preparing for peak season. But you should also prep for what comes after the holidays. For our panelist and tax expert Joe Rasmussen, that means not forgetting the impact of post-season returns.

“The one thing I would say from the tax perspective is to keep track of the tax. When people are returning if you have charged sales tax you know that’s something that you can credit back to your sales tax return that you’re filing. Just make sure you’re staying on top of it.” 

Joe Rasmussen

How Erin Sees It 

• The economic changes we see affecting peak season are not going anywhere, so look at the changes you plan to make and extend that to the whole year. 
• Review the delivery options you are offering your customers and make sure that you are offering the most economical rates. 36% of US consumers say the cost of delivery is the most important delivery factor impacting their online buying decisions. Luckily ShipStation Now Offers the Lowest USPS® Shipping Rates.
• Don’t forget to offer multiple shipping options. When the holidays get closer consumers are willing to pay more especially if it is coming down to crunch time to get things delivered. 
• With consumers cutting back right now, it is important to deliver a wonderful customer experience at every stage of the buyer’s journey. Whether it is offering free shipping for orders that reach a certain threshold, offering green or carbon offset shipping, or even a gift with purchase, now is the time to get creative.