There Really is No Such Thing as Totally Free Shipping
Today, many businesses make free shipping standard. Or, establish majorly moderate price points through which consumers can earn free shipping.
However, free shipping often comes with a price – literally and figuratively. And the truth is, many companies are not positioned to do “free” shipping all that well.
The escalating demand for a greater variety of products to be shipped free straight to consumers (at the fastest speed possible) is putting a strain on operational efficiency, on the environment, and on retailers’ bottom lines.
Retailers know that free shipping can attract new customers and spark higher volume orders.
They also know that if they aren’t willing to absorb the cost of shipping – no matter the weight of the item or the location of the customer – they may risk losing customers.
But, there are smart ways to fulfill orders without compromising product integrity and adding costs. By working in lockstep, retailers, suppliers, and distributors can help each other fulfill upticks in orders and satisfy the needs of customers more efficiently.
The first, critical bar to clear is product protection, because it doesn’t matter that something was delivered fast and free if it arrives damaged.
• The majority of Americans (59%) believe that both the retailer and the package carrier are equally responsible for damage to a product that they order online.
• Nearly three in five (58%) of Americans say their relationship with a retailer would be impacted in some way if they received a broken or damaged online order.
• One in five (20%) would never use that retailer again.
The packaging technology available to protect against damage is smarter and more efficient than it has ever been. Leading the way are systems that can automatically sense and scan each order and create right-sized boxes or mailer bags to fit each item – reducing empty space, reducing the need for wasteful protectant “fill” materials, and minimizing the shipping cost of each order out the door.
When efficient fill materials are required to add extra protection to the items inside, retailers, suppliers, and distributors can now take advantage of space-saving, cost-saving and environmentally-friendly alternatives, such as on-demand inflatables, to fill the empty space inside a box or package.
Minimizing Waste
While free shipping can help drive demand, it can also create operational complexity in fulfillment centers and back-of-store operations.
With great volume comes great waste – lots of it.
Although customers will be happy with complimentary shipping, business can suffer from the inefficient use of labor resources, misuse of warehousing space, and the use of excessive packaging materials.
Poorly-sized packages also take up more room on the back of each freight truck, which little by little adds up to more trucks on the road and more negative impact on the environment.
Consumers are also increasingly aware of the waste that ends up in their living rooms when items in the same order are shipped from multiple distribution points arrive in packages that are too big for the item inside and have to be broken down and disposed of.
Sustainable is the New Free
So what does it take for a company to re-imagine its fulfillment strategy so that they can efficiently and affordably deliver on rising consumer expectations for fast and free at-home shipping? It takes investments in operational models that are optimized for efficiency and packaging that is right-sized, easily returnable, and recyclable.
For instance, automated technologies can help right-size packaging, enabling retailers to boost fulfillment speeds and lower freight costs. By optimizing ship-from-store stations, companies can not only maximize efficiency, but reduce waste and damage.
Combined, these efforts can help retailers use less space inside of a box and add more protective packaging materials. It can also help them avoid higher shipping costs that have come from the dim weight pricing models major carriers have implemented over the past two years.
No Such Thing as Free Shipping
Free shipping, while a boon to consumers, has many costs – some of which are immediately obvious and some of which are not.
By eliminating inefficiencies in the supply chain, retailers, suppliers, and distributors, can better navigate the complexities of free shipping.
And they’ll be better positioned to meet increased demand for products, minimize waste and ensure that they reap the benefits of more sustainable shipping practices.