As the busiest shopping season of the year approaches the finish line, I’ve already encountered a couple of peak-season slip-ups as an online shopper. I recently placed an online clothes order and expected to receive it in time for an event. Not only did the clothes arrive late, but also the retailer sent the wrong size — and a broken zipper.
Regardless of fulfillment hiccups like these, e-commerce shows no signs of slowing. Consumers across the globe increasingly prefer the ease and convenience of shopping from their couches instead of fighting crowds during the holidays, and the latest sales numbers reflect just that. Sales from Singles Day 2019, the one-day online shopping fest from China-based Alibaba, topped out at $38.3 billion — just under a 26 percent increase over last year. The event exceeded spending by consumers during any single U.S. shopping holiday. Americans spent $7.4 billion online this Black Friday, a 16 percent increase over last year — followed by a record-breaking Cyber Monday at $9.2 billion, the largest online shopping day of all time in the U.S.
As holiday e-commerce grows, so do the expectations that come with online order fulfillment. All those gifts now have to make it to their destinations, on time and unscathed. Faster rarely means safer, and bad shipping experiences could push some shoppers back into brick and mortar shops. Which leads to a critical question for retailers: How can the product journey to consumers’ doorsteps be improved?
Happy holidays, higher expectations
Consumer expectations continue to rise, and don’t soften during the holidays. A report by the National Retail Federation found that 56 percent of U.S. consumers plan to purchase holiday items online this year, compared with 55 percent last year. With these purchases come expectations of fast and free shipping. According to research conducted for Sealed Air, 56 percent of us abandon our virtual shopping carts if we don’t qualify for it. The research also shows that consumers want attractive packaging that’s easy to open with minimal waste to recycle or toss in the garbage.
More online shopping means more potential for disappointment when a package arrives late, broken, or battered. We never want our order to arrive damaged (ever) — but if it does, we want to be able to reuse our packaging to send it back. Another important aspect of the online shopping experience is being able to track our purchase’s journey as it makes its way to us.
Bad experiences? Retailers have the most to lose
Retail’s peak season is often fraught with fulfillment issues as the onslaught of holiday e-commerce orders puts a strain on operations. When the number of orders fulfilled by an online retailer jumps from 500 to 10,000 orders a month, handling the increase in volume can prove challenging.
Labor challenges lead to more inexperienced packers on warehouse floors, and if those inexperienced packers don’t pack correctly or efficiently, companies could see increased rates of damage or excess material costs. Perhaps most worrisome for online retailers is what Sealed Air’s research reveals about how consumers respond to a bad online shopping experience: 38 percent of online shoppers will consider purchasing from a competitor after receiving a damaged item.
Solving e-commerce packaging challenges
One way to solve these e-commerce challenges? Focus on rightsizing packaging. The latest freight pricing methods based on dimensional weight encourage shippers to take up as little space on trucks as possible. Although one large corrugated box used to work well as packaging for an entire product line, shipping lightweight items in large boxes with excess void fill is no longer a cost-effective approach.
Instead of focusing solely on actual weight, online retailers need to make their packaging work harder to reduce damage. The shopping and gifting experience could be ruined if the products consumers carefully selected for their friends and family are broken by the time they arrive. (Hello returns, restocking, refurbishing, and reselling.)
Retailers should also consider creating a premium unboxing experience for their customers. Our research shows that the visual and tactile impacts inside a package can deepen a customer’s emotional engagement with brands. We call this last chance to make a positive impression on a customer the last moment of truth.
Our research also shows that luxury goods consumers are 33 percent more likely to repeat a purchase after receiving a premium unboxing experience. And the 39 percent of U.S. consumers who self-identify as “packaging involved” are 77 percent more likely to re-order if given a premium packaging experience — and they’ll spend twice as much.
Opening packages is no longer a solitary affair as influencers and e-commerce recipients now use social media to share their unboxing experiences — the good and the not-so-good. So as online retailers face the challenge of peak-season shipping (and the potential for returns), I have one question: Are your customers delighted by your packaging?