The rapid rise of e-commerce is attributed mainly to its convenience and swift delivery. However, shipping delays disrupt this seamless experience, leading to customer frustration and potentially undermining the success of an ecommerce venture.
While they might seem minor, shipping delays can significantly disrupt the supply chain, erode customer loyalty, and significantly impact sales. Certain situations, like the COVID-19 pandemic, which halted manufacturing and distribution processes, render shipping delays unavoidable.
However, strategic planning and accurate forecasting can prevent many shipping delays. This guide provides the following:
- An in-depth analysis of the causes of shipping delays.
- Strategies for their prevention.
- Solutions to this common challenge.
This information is intended to assist in addressing and mitigating the issue of shipping delays effectively.
What are eCommerce shipping delays?
In the ecommerce context, a shipping delay occurs when an order is not fulfilled within the delivery timeframe initially promised by the seller. Such delays can arise during transit or at various transportation hubs due to congestion or extended processing times. In some instances, delays may also result from carrier agents falsely reporting delivery attempts, claiming orders as undelivered or postponed due to the customer’s unavailability when, in fact, no delivery attempt was made.
Online retailers must acknowledge the reasons behind shipping delays and actively seek solutions to address them promptly. We will delve into how consistent shipping delays can impact the profitability of a business and the importance of eliminating them.
How do ecommerce shipping delays impact your business?
In ecommerce, the completion of a sale is only acknowledged once the order reaches the customer’s doorstep, not merely when they complete the checkout process. This highlights the critical impact of delivery delays on ecommerce businesses. To understand the ramifications of these delays, consider the following vital statistics:
- 69% of customers are less inclined to revisit a store if their order is not delivered within two days of the promised date.
- 17% of customers may cease purchasing from an ecommerce retailer after just one instance of late delivery, which rises to 55% after two to three cases.
- Acquiring a new customer can be up to 25 times more expensive than retaining an existing one.
- Loyal customers can be valued at up to ten times the amount of their initial purchase, and increasing customer retention by just 5% can enhance profits by 25% to 95%.
These figures underscore the importance of timely delivery in maintaining customer loyalty and the overall health of an ecommerce business.
Calculating ecommerce shipping delays
Customer Acquisition Cost (CAC) represents the total expense incurred in persuading a potential customer to purchase a product or service, encompassing sales, advertising, and marketing costs. Profitability is achieved only when the customer’s spending exceeds the CAC. To calculate CAC, divide the total expenditure on acquiring new customers in a given period by the number of customers acquired. For instance, spending $100 to reach four customers weekly results in a CAC of $25 per customer.
Customer Retention Rate (CRR) measures the proportion of customers retained. Calculate CRR by subtracting the number of new customers (N) from the total customers at period-end (E), dividing this by the initial number of customers (S), and multiplying by 100. Typically, CRR is under 20% across most industries.
Late deliveries negatively impact CRR, subsequently reducing CLV. More crucially, delivery delays can escalate CAC due to negative feedback, making new customer acquisition more challenging.
6 causes of shipping delays
Recognising the root causes is a vital step towards resolving them. Key factors contributing to shipping delays include:
1. Incorrect customer information
This issue is a frequent cause of delays and is readily correctable. Delays often occur when customers provide incorrect shipping addresses or phone numbers, complicating timely order fulfilment for courier companies. Such errors in shipping details result in challenges during the last-mile delivery stage and can increase transportation costs.
2. Logistical oversights & labour shortages
Inadequate logistical infrastructure can lead to delays in sorting and processing orders. This is particularly challenging for smaller businesses that manage all operations internally, often resulting in a backlog of orders awaiting shipment. Inefficiencies in warehouse and inventory management pose substantial logistical hurdles.
Furthermore, labour shortages or a lack of sufficient delivery vehicles at hubs or distribution centres are significant factors that can considerably delay order dispatch.
3. Supply chain issues
Controlling your entire supply chain, from sourcing raw materials to manufacturing, selling, and shipping, presents a significant advantage. This is because disruptions in the supply chain can result in stock shortages, ultimately leading to shipping delays. Delays in manufacturing due to supplier issues can also result in lost sales for retailers and slow down the order shipment process.
4. Bad weather
Extreme weather conditions adversely affect order deliveries. On days with stormy or foggy weather, deliveries will likely be delayed due to poor vehicle visibility. Additionally, items that are perishable or sensitive to extreme temperatures need to be postponed under adverse weather conditions. Weather-resistant packaging or temperature-controlled vehicles are advisable to transport such goods safely.
5. Peak season
During peak seasons, sales in ecommerce can surge up to six times the usual volume. This rapid increase often challenges many ecommerce businesses as they need help to keep pace. Common issues include depleted stock levels, failure to update inventory promptly, and processing incorrect orders. Additionally, courier companies frequently become overwhelmed with a surge of last-minute deliveries. These factors collectively contribute to shipping delays.
6. Inadequate planning
Most of the causes mentioned above of delays can be addressed with proactive planning. For instance, a seller unaware of their top-selling SKUs may struggle to meet the heightened demand during peak sales. Retailers must know the various challenges of order fulfilment and meticulously oversee each phase to identify and rectify any inefficiencies.
11 tips to prevent ecommerce shipping delays
Below are some of the most effective ways to minimise ecommerce shipment delays.
1. Update the inventory
Failing to update inventory promptly can result in incorrect or false orders, where customers place orders for items that are, in reality, out of stock. This issue is particularly significant in omnichannel retailing, where sales in physical stores are not instantly synchronised with online platforms. Frustrated by this discrepancy, misinformed customers might abandon their shopping carts or turn to alternative retailers. This scenario leads to revenue loss, diminished customer loyalty, and a tarnished brand image for sellers.
2. Display correct estimated delivery dates
Providing precise Estimated Delivery Dates (EDD) is crucial for setting realistic customer expectations regarding shipping and delivery. A delivery timeframe of two days is generally acceptable to most consumers. Yet, delays beyond this period can significantly impact customer satisfaction with the brand. Businesses should only promise same-day or next-day deliveries if they consistently meet these timelines. Overpromising and underdelivering are critical mistakes for any business, as they can lead to customer dissatisfaction and harm the brand’s reputation.
3. Use reliable shipping carriers
Collaborating with dependable shipping carriers capable of efficiently and reliably managing orders is essential. Establishing explicit Service Level Agreement (SLA) terms with these carriers and ensuring consistent adherence is necessary. Engaging a reputable courier company guarantees the accurate fulfilment of time-sensitive orders.
Top-tier global shipping providers, such as FedEx, UPS, Blue Dart, DTDC, DPD, and DHL, are recommended for domestic and international shipping. These carriers offer several benefits, including specialised packaging options, extensive fleet sizes for larger shipments, shipping insurance, and adept customs management, among other services.
4. Enable real-time order tracking
Promptly informing customers about delivery delays as they happen can significantly reduce the likelihood of order cancellations and encourage repeat business. Offering real-time tracking updates at each stage of the order’s journey effectively alleviates customer concerns regarding delivery.
Most consumers expect and prefer to receive tracking updates through emails, SMS, or WhatsApp. Customers who are well-informed and feel valued by a brand are more understanding and forgiving of minor shipping delays. Overall, shipment tracking keeps customers informed about potential delays or issues in transit and helps manage their expectations regarding delivery times.
5. Validate customer information
Since incorrect customer information is a leading cause of shipping delays, businesses must implement methods to verify this data accurately. Utilising an auto-fill feature can significantly reduce the occurrence of typographical errors in customer details. Additionally, requesting an alternative phone number from customers can facilitate smoother delivery processes in cases where the primary contact is unreachable.
Accurate customer information is vital for ensuring timely deliveries. It enables sellers to quickly get in touch with customers in case of delays, allowing for more efficient resolution of issues.
6. Communicate with your customers
When addressing delivery delays, the initial step is to proactively reach out to your customers and clarify the reasons behind the delay of their orders. While communication through emails or platforms like Facebook Messenger is effective, opting for direct phone calls can be more impactful. A phone call allows for a personalised approach to resolving the issue, and customers often value the additional effort to contact them directly. During the conversation, ensure you discuss all aspects of the delay in detail and provide an estimated timeline for when they can anticipate receiving their package.
7. Offer free shipping
Free shipping can be a strategic move to moderate customer expectations regarding delivery speed. When customers are not charged for shipping, they are generally more accepting of longer delivery times, not anticipating same-day or next-day delivery. With this adjustment in customer expectations, you can focus on enhancing your shipping processes and minimising delays. This approach allows you to leverage the competitive edge of expedited shipping without the pressure of immediate delivery expectations.
8. Invest in tracking software.
It can be difficult for an ecommerce seller to manage all aspects of their business, from manufacturing or procuring goods to shipping. Tracking software can aid companies in numerous ways, including maintaining delivery times.
Tracking software with multi-carrier integration capabilities enables the selection of the quickest and most cost-effective carrier for a given destination. This software can also automate sending order status updates to customers, collecting feedback, and simplifying the returns process.
For merchants, this translates to on-time order fulfilment, real-time visibility of shipments, and savings in time and resources. As a Software as a Service (SaaS) solution, shipping software is highly scalable, making it well-equipped to manage unexpected increases in order volumes without difficulty.
9. Partner with domestic suppliers
Collaborating with suppliers that possess warehouses in your target markets can significantly diminish the likelihood of delivery delays. These suppliers can dispatch orders from the nearest warehouse, shortening shipping times and ensuring prompt deliveries. Easyship, with its network of global warehouses, stands ready to assist in strategically positioning your products to reach your customers efficiently, effectively reducing transit times and mitigating delay risks.
10. Provide offers and discounts
Giving your customers discount codes or small complimentary gifts can alleviate their dissatisfaction. Although this approach entails a minor expense, it is a cost-effective strategy compared to the potential impact of negative reviews. Such unfavourable feedback can deter numerous prospective customers, making this proactive gesture a valuable investment in maintaining your business’s reputation.
11. Plan for increased demand
Retailers often find themselves unprepared for a surge in sales during peak seasons, underscoring the importance of strategic planning. Effective sales forecasting is crucial for businesses aiming to navigate the holiday season successfully.
Retailers need to understand the stock levels required for each item to ensure suppliers can meet these needs. Without this foresight, popular items may quickly sell out, leaving less popular products to accumulate. To avoid such scenarios, initiating planning for anticipated sales increases several months ahead is critical.
How to manage ecommerce shipping delays
Despite our best efforts, shipping delays are sometimes unavoidable. In such cases, ecommerce businesses must work fast to mitigate the damage done and contain customer dissatisfaction.
Be transparent with customers
Many customers are already accustomed to experiencing shipment delays. By proactively explaining the reasons behind any delays in their orders, businesses can help customers better understand the situation. Clear and honest communication provides reassurance, affirming that their orders are handled responsibly. In instances of delay, companies must provide customers with an updated expected delivery date, which can significantly alleviate their concerns.
Follow up with service providers
Most shipping delays occur after the order processing stage, such as during packing, loading, trucking, or distribution. It may be necessary to reassess your relationship with your service provider. Investigate the reasons behind the failure to meet Service Level Agreement (SLA) terms and work towards resolving these issues. Switching to a more reliable third-party logistics (3PL) or shipping service provider is advisable if such delays persist.
Offer discounts or gift coupons
Demonstrating appreciation for your customers is a crucial strategy in retaining their loyalty. If you haven’t yet implemented a loyalty program, now is an opportune moment to start. Offering incentives such as gift cards, substantial discounts on future purchases, and complimentary shipping can act as tokens of gratitude. These gestures are effective in reinforcing customer trust and loyalty to your brand.
Ecommerce shipping delays FAQs
What is a Shipment Delay?
A shipment delay occurs when your order’s tracking status indicates ‘delayed’, signifying an unexpected logistical problem pushing the delivery back later.
Reasons for Customs Clearance Delays
Delays in customs clearance typically arise from issues like missing shipping documents, incorrect addresses, or the shipment of restricted or prohibited items.
Duration of Shipping Delays
The length of shipping delays varies with each courier service. If you experience a delay, it’s advisable to contact the respective courier’s customer service for detailed information.
Communicating Shipping Delays to Customers
Ecommerce businesses can inform customers about shipping delays through SMS, email, and WhatsApp notifications, providing real-time updates on order status to prevent confusion and frequent queries.
Tracking a Delayed Shipment
The process for tracking a delayed shipment remains the same as for any shipment. Customers can monitor the status of their delayed packages using the tracking link provided by the courier or by entering their Tracking ID, Order ID, or Consignment number on the courier’s tracking portal.