Prime Day Lessons Retailers Can Apply to Their Holiday Shipping Plans
This holiday season it’s all about fast and free shipping of online orders. Therefore, in an exclusive interview with Total Retail, Carson Krieg, co-founder and director of carrier operations at Convey, Inc., discusses the lessons from Amazon Prime Day that merchants can apply to the upcoming holiday peak season.
Total Retail: What challenges did most retailers and carriers experience during peak season times, such as Amazon Prime Day this year?
Carson Krieg: Amazon.com set the bar high by rolling out free one-day delivery for Prime members prior to Prime Day, and has launched its own carrier freight brokerage to ensure dominance of fulfillment logistics. For retailers unable to spend on a similar scale, Amazon’s activities can have a downstream impact, swamping carriers and causing delays across the network. For example, in the week after Prime Day in 2018, Convey found that USPS transit times spiked from 3.3 days to 4.4 days (33 percent), and negative customer feedback increased by 10 percent.
TR: What lessons can retailers and carriers learn from Amazon Prime Day?
CK: As Amazon expands its own delivery footprint and plays an increasingly dominant role in fulfillment logistics, small to midsized retailers must become more nimble and responsive. Brands should lock in peak capacity, build more collaborative carrier relationships, and ensure forward-stocking strategies are in play.
One Convey customer that has enacted a proactive approach to fulfillment actually saw an 82 percent increase in sales during Prime Day in 2019 vs. peak revenue days during the 2018 holiday season. It also experienced an increase in positive feedback from customers, boosting the retailer’s Net Promoter Score 7 percent.
TR: What challenges can retailers expect to experience during the 2019 peak holiday season? Is there anything especially challenging about this year for carriers?
CK: The 2019 holiday season is six days shorter than last year, which means that following Cyber Week’s surge, merchants will hope to maintain an intense pace throughout the short run-up to Christmas. They need logistics operations to operate flawlessly in order to avoid getting bogged down.
In addition, consumer expectations are higher than ever that holiday gift deliveries will be both fast and free. Convey’s recent survey found that three in five consumers (64.3 percent) cite "cost" as the most important factor when it comes to shipping, followed by "speed" at 18.7 percent — a percentage that has nearly doubled year-over-year. The stakes are high for getting fulfillment right: more than seven in 10 shoppers say they're unlikely to purchase from a brand again after a poor delivery experience.
TR: What steps or preparations can retailers take to minimize issues and exceptions?
CK: Data from 2018 shows a spike in exceptions during the holidays, which can have a negative impact on the customer experience. Merchants should prevent late deliveries by analyzing carrier data for positive or negative customer feedback and adjusting accordingly during the peak period, even if it means choosing a higher-cost option. In addition, providing continuous daily forecasts and estimates to their fulfillment third-party logistics providers and tweaking hours of operation can ensure everyone is well prepared for the influx of orders.
TR: Is there anything else especially important that retailers can do to ensure a positive holiday shopping experience?
CK: Clear, transparent communication along the path to purchase helps set appropriate expectations and build satisfaction. In Convey’s survey, 56.2 percent of consumers said displaying the estimated delivery date (EDD) in the shopping cart can convince them to complete transactions.
When delivery exceptions do occur, communication can make or break the experience. Fully 98.3 percent of survey respondents said they want a notification if their delivery is late, up 10 percent from last year. Therefore, the pressure is on for retailers to message proactively.