Most Amazon.com shoppers love how the site immediately predicts shipping costs and delivery date for their purchases. As soon as shoppers click on a product, they see a message such as, “Want it Wednesday, Sept. 30 by 4 p.m.? Order in the next 11 minutes, six seconds.” What’s noteworthy is that Amazon does this up front, giving shipping details as a means of helping close the sale. The online retail giant has long known that disclosing precise shipping information at the beginning of a shopper’s online experience dramatically cuts shopping cart abandonment rates, thereby boosting conversion rates. While few e-commerce businesses possess Amazon’s mastery of logistics to be able to make such complex calculations in real time, an external shipping algorithm can be leveraged as a plug-in to level the playing field.
Such an algorithm can be deployed just like an app, optimized to be dropped into e-commerce management platforms such as Magento, Demandware, Shopify and others. The algorithm instantly predicts delivery dates and times of e-commerce orders, as well as the actual shipping cost to both buyer and seller. As Illustrated by Melissa Data's Decimal shipping algorithm, calculations can be live streamed onto product pages as well as checkout pages, giving shoppers deeper, meaningful information to drive their purchase decisions. On the back end, integrated data quality tools verify customer locations and addresses in real time, further assuring that the delivery and related costs will be error free.
Upscale online retailer Brackish, a luxury artisan brand and maker of handcrafted men’s accessories, saw an immediate 15 percent increase in sales with the implementation of a shipping algorithm application on its website — an increase that's been sustained over time based on improved service to its online customers.
According to Brackish Co-Founder Jeff Plotner, “We make a unique, custom product created by teams of artisans — no two Brackish bow ties are alike. This unique experience for our customers begins at the earliest touchpoint — when they first come to our website. With shipping prediction technology, our customers have an unexpectedly sophisticated e-commerce experience. It subliminally strengthens our brand and conveys our service capabilities from purchase through delivery of our product. This tool is now an integral part of our e-commerce strategy.”
Brackish’s web store as well as its Pinterest channel are integrated with Shopify, enabling the same shipping prediction algorithm to power both platforms. Shoppers browsing Brackish's Pinterest page can click the Buyable pin and receive the same type of detailed shipping options available on the company’s website.
Online merchants spend as much as 20 percent of their gross profit on shipping, but can minimize these expenses by offering more options to customers in real time. Shipping fees aren't only more accurate, but shoppers also have the opportunity to choose delivery that's faster (but not free at the expense of the retailer). For example, the Decimal algorithm is commonly integrated with primary carriers USPS, FedEx, UPS and DHL; however, even faster alternatives can be offered through built-in integration with Uber or Postmates for on-demand or two-hour same-day delivery.
These high-service/high-cost options ultimately help offset the merchant expense of free shipping. Preferred shippers and thresholds for each option are set by the merchant, with free shipping or faster delivery available based on parameters such as dollar amount of the order or type of item purchased.
The Amazon model has spoiled shoppers into believing that shipping should be free and fast, and this expectation is now weaving its way into the rest of the e-commerce world. More merchants are considering it essential to quickly answer a key question that closes an online sale: “When will I receive this, and how much is the shipping cost?” Shipping prediction technologies are helping level this playing field, ultimately increasing sales and reducing shipping costs for online merchants.
Greg Brown is vice president of Melissa Data, a provider of global data quality solutions that integrate into a spectrum of e-commerce, master data management and big data platforms.