There’s no such thing as free shipping.
Yes, true, you could go to almost any of your favorite retailer’s websites right now and get what you want sent directly to your front door without paying a penny more than you would in the store.
But it comes at a cost - and not just a financial one.
This Wall Street Journal article “Online Shopping Mystery, Why Tiny Items Arrive in Giant Boxes,” revealed what many in the e-retail industry have long known to be true: shipping operations are a profit drain. They sometimes operate entirely in the negative.
If you’re Amazon, maybe that’s okay. At the end of the day (or earnings cycle) your explosive revenue will more than offset the millions in losses incurred on shipping.
But most retailers aren’t Amazon. They aren’t piling up profits that cancel out shipping costs, but they are being held to the same standard by consumers. They want it fast, and they want it free. And, as the Wall Street Journal shares - 75% of them taking shipping cost into account when deciding where to shop. So if you are a retailer who isn’t willing to absorb the financial consequences of a get-it-there-at-whatever-the-cost shipping operation, you could risk losing customers.
It’s a vicious choice to have to make: meet consumer demand, or meet your financial targets for the quarter?
But it’s a choice many retailers are having to make - and when they do decide to get in the business of faster shipping times, free delivery, and pre-paid returns the challenges grow ten fold.
Free shipping draws in new customers and higher volume, which breeds operational complexity in fulfillment centers and back-of-store operations not equipped to handle them. It also creates waste. Lots of it. Inefficient use of labor resources, misuse of valuable warehousing space, and -- perhaps the most visible of them all -- an excessive waste of packaging materials.
It isn’t good for your brand (consumers hate it). It isn’t good for your business (it costs more to pack and more to ship). And it’s really not good for the environment (more landfill waste and more trucks on the road to handle the volume of individual -- and ill-sized-- packages).
Seeing this economically draining issue get raised by the Wall Street Journal is a big deal -- but like many business trend stories, it comes up a bit short on solutions.
What’s the antidote?
Well, we can’t squeeze the “free shipping” toothpaste back into its tube - but we can ensure that more and more of the world’s packages are right-sized, resourcefully produced, easily returnable, and recyclable from the start.
We’re doing this right now with many of the major retailers (yes, exactly the ones you’re thinking of) who have been feeling the strain of shipping costs for years and are taking decisive action to do something about it. It would be rewarding to name them here, but for many retailers, partnering with us to solve these exact challenges creates a significant business advantage for them which -- unsurprisingly -- they aren’t keen to let others catch on to.
If it means that it’s a little harder for us to put “Look Who We Do Business With” logos on our website - so be it. The results are more than worth it.
Right now, we’re helping companies in every global region re-imagine their entire fulfillment operations from top to bottom. We’re helping them boost fulfillment speeds and lower freight costs through automated right-sizing. We're redesigning their ship-from-store stations to maximize efficiency and reduce waste and damage. And, as as we’ve come to be known for, we’re continuing to innovate new ways to provide companies with reliable protection that uses less space, wastes less material, and costs them less to store, handle, and ship.
There is no such thing as free shipping, but smarter, faster, more sustainable shipping?
That is very, very real.