The COVID-19 pandemic wreaked havoc on global supply chains. Lockdowns, worker shortages, and slow port turnaround times have all contributed to worldwide supply chain issues and shipping delays.
These problems have been felt by both retailers and shoppers. In the US, 60% of consumers report being unable to get a product due to shortages. And according to the US Census Bureau, COVID-19 caused supply chain disruptions/delays for 38.8% of small businesses in the United States.
Not only do retailers lose revenue from not being able to stock in-demand products, their customer relationships also suffer. 58% of consumers say they would stop buying from a brand entirely after one to three supply chain delays or disruptions.
So how can you navigate shipping delays as a retailer? This post will highlight the main causes as well as some tips for mitigating shipping delays.
What causes shipping delays?
- Labor shortages
- Extreme weather
- Supply chain issues
- Inaccurate shipping information
According to the National Retail Federation (NRF), 97% of its members have been impacted by port congestion and shipping delays. These delays can damage retail brands’ reputations and reduce customer trust.
While delays are the last thing any retailer wants to face, sometimes they’re unavoidable.
Here are five common causes of shipping delays:
1. Labor shortages
COVID-19 positive cases and global worker shortages have contributed to shipping delays.
Without people to carry out tasks essential to the supply chain, delays are inevitable.
Kelly and Zoey Allen, owners of Kelzo Jewellery, a Shopify-based store, explain how a mix of worker shortages and an increase in online orders have contributed to delays.
For us, we feel the pandemic has had a lot to do with causing the delays. With many postal workers and couriers going sick or fearing attending work, alongside higher than usual online ordering due to physical store closures, packages have taken longer than usual.
Retailers often experience spikes in orders during holiday periods. This causes an increase in shipment volumes that can overwhelm couriers, especially if they don’t have an efficient delivery network system. This can cause shipping delays at a time when shoppers most want to have their items arrive on time.
During the 2021 holiday season, 25% of US shoppers said they were very concerned about shipping delays.
3. Extreme weather
Nearly 12% of total estimated truck delays in the US are due to weather. From freezing conditions on the road to gale force winds at sea, bad weather can create chaos at all stages of domestic and international shipping.
4. Supply chain issues
39% of brands say shipping and manufacturing delays and shipping costs will continue to be a top supply-chain-related challenge over the next 12 months.
A global pandemic, war conflict, and port delays have caused worldwide supply chain problems. As a McKinsey article says, “Clogged ports, expensive cargo capacity, and emergency shipments became prevalent during the COVID-19 pandemic. Since then, the conflict in Ukraine has also contributed to product-line closures, transport delays, and spiraling input costs.”
And according to Bloomberg, 77% of the world’s ports are experiencing abnormally long turnaround times.
While in January 2019, an average late container ship was delayed by about four days, in February 2022, a late ship was delayed by more than a week. In February 2022, only about 34% of container vessels arrived at their destination without any delay.
5. Inaccurate shipping information
When customers give a misspelled or incorrect address, or when the retailer doesn’t document the customer’s order properly, the courier company may not have enough information to correctly deliver the package. This can cause shipping delays, increased last mile delivery costs, or worse, the package never arrives.
How do shipping delays impact retailers?
Today a sale is considered final not when a customer makes payment, but when the order arrives at the customer’s chosen address. There’s pressure on retailers to meet customer expectations.
In a recent survey, 76% of respondents said that an unacceptable delivery experience would strongly or somewhat affect their decision to order from that company again.
On top of influencing customer purchasing decisions, shipping delays impact retailers on a number of levels:
Shipping delays can negatively impact retail revenue on a huge scale. According to a recent McKinsey article, “For companies in most sectors, a single prolonged shock to production could wipe out 30-50% of one year’s earnings before interest, taxes, and depreciation.”
Susana Saeliu, co-founder and CEO of Shopify store Pluto Pillow, a custom pillow brand, explains how shipping delays in the US and across Asia lowered her brand’s conversion rate.
The longest we've been delayed is by eight weeks; in other words, customers would receive their custom pillow in two months! This was incredibly difficult, as our turnaround time was usually seven business days. As a result, we definitely saw a decrease in conversion rate.
In addition, customers often find long delivery timelines off-putting. They may either abandon the purchase entirely or buy from a competitor. In the last year, 32% of customers say they have abandoned their carts because the estimated shipping time was too long.
Shipping delays can also cause inconvenient stockouts, which cost retailers $1 trillion every year.
Damage to brand trust
Concerningly, 41% of consumers place the blame for late deliveries on retailers. When shoppers rely on retailers to deliver items on time, they’re inevitably going to be disappointed when their order doesn’t show up when expected. That disappointment can lead to future concerns about delivery times and potentially a reluctance to re-order.
And according to 32% of global consumers, shipping problems or delays are some of the biggest drawbacks of ecommerce purchases:
Shipping delays can make it hard for retailers to effectively forecast demand and plan their inventory. As a result, retailers may overstock and end up paying high costs for inventory storage. Alternatively, they may under-forecast customer demand, quickly sell out, and be unable to restock quickly enough to meet actual customer demand.
💡 PRO TIP: Shopify POS comes with tools to help you control and manage your inventory across multiple store locations, your online store, and warehouse. Forecast demand, set low-stock alerts, create purchase orders, know which items are selling or sitting on shelves, count inventory, and more.
Tips for dealing with shipping delays
- Shipment tracking
- Consistent communication
- Offer free shipping
- Provide local pickup
- Offer gift cards and discounts
Dealing with shipping delays is one of the biggest challenges retailers face in 2022. Even with streamlined retail operations, it’s hard to avoid shipping delays completely. Unfortunately, even if the delay isn’t your fault, your customer will see it as a problem and you may lose sales.
As a result, 43% of retailers are changing their shipping strategies to reduce the impact of global shipping delays.
It’s vital to plan ahead and think about how you’ll handle inevitable shipping delays. Here are five tips for dealing with them:
1. Shipment tracking
Customers like to know when their order will arrive. In a recent survey, 96% of respondents indicated they would find GPS tracking useful when awaiting deliveries. Shipment tracking can reassure them that their order is on its way, even if it’s delayed.
Shipment tracking can also explain the cause of the delay.
Jack Lee, the owner of Evolve Mala, a Shopify-based crystal jewelry store, says that shipment tracking has helped his business lower the number of customer support requests they receive.
Shipment tracking allows customers to know if a delay is caused by the shipping carrier or your business. The latter erodes brand trust much more than the former. Another benefit of offering shipment tracking is that it reduces the number of support tickets from customers wanting to know where their order is.
Some ecommerce providers let customers track the delivery of packages. Look for apps that track orders in real time and integrate with multiple international carrier companies.
2. Consistent communication
Consumers want to know delivery expectations upfront –– around 45% of shoppers actively look for businesses that clearly show anticipated delivery times.
Following a purchase, they want to receive regular updates on their order status. Maintaining open channels of communication with customers helps build trust.
49% of surveyed brands are investing in not just their delivery practices but also transparency with their delivery promises, like sharing when an order is prepared and shipped.
Retailer Jack Lee finds that when his jewelry store is honest about shipping delays, customers tend to be understanding.
We'll usually include a reminder in our emails to customers that delivery may be delayed due to the holiday rush, inclement weather, Covid, etc. We find that customers are generally pretty understanding of shipping delays as long as you're being honest and transparent with them.
3. Offer free shipping
75% of shoppers say free shipping continues to have a significant influence on purchasing decisions. Free shipping is a chance to show customers you value them and are committed to providing high-quality service.
Even if orders are hit with shipping delays, free shipping goes a long way in improving customer experience and encouraging people to shop with you.
Luke Lee, founder and CEO of Pala Leather, says that offering free shipping has helped his brand build trust with customers.
Offering free shipping is also another way to build trust, especially if you're a global brand. Why? Because shipping is a common concern for overseas buyers. Taking this worry off their backs can help you gain more buyers.
4. Provide local pickup
35% of consumers are choosing shipping options like curbside pickup to receive their orders on time. As shoppers become increasingly aware of shipping delays, they’re more open to new ways of receiving their orders.
Kelly and Zoey Allen, the owners of Kelzo Jewellery, are tapping into the rise of curbside pickup as well as absorbing additional postage costs.
We offer local pickup as well as a signed-for-delivery option. We also absorbed the rise in postage costs ourselves so as not to incur any extra costs to our customers, showing them how committed we are.
💡 PRO TIP: Set up local pickup in Shopify to start offering in-store pickup as a delivery option at checkout. Pay less on last-mile delivery, speed up fulfillment times on local orders, and drive more foot traffic to your stores.
5. Offer gift cards and discounts
Gift cards and discounts are another way to show customers you care and value their business, even when things don’t go according to plan.
Offering gift cards and discounts can help lower their frustration surrounding late delivery. This strategy will require a little investment on your part, but it’s much less expensive than having your customers write bad reviews or never buy from you again.
💡 PRO TIP: With Shopify POS, you can sell physical and digital gift cards that can be redeemed both in store and online. Sell physical gift cards in store, email digital gift cards to customers, and let them redeem their gift card wherever they prefer to shop.
Shipping trends for the future
Customers are increasingly conscious of the environmental impact of their shopping choices. In 2021, 44% of customers actively chose to buy from brands that have a clear commitment to sustainability.
Retail businesses need to be aware of how their shipping and delivery options impact their overall carbon footprint.
“Green shipping” or “zero-emissions shipping” is an important topic, both for shipping companies and retail business owners. Customers want to see brands taking steps to reduce their carbon footprint. Shipping is one of the major ways to do so.
Today, the shipping industry is looking at ways to reduce fossil fuel consumption. Recent progress in marine wind and solar technology means that these options could become a cost-effective fossil-fuel reduction choice for shipping companies.
Currently, there are plans to begin installing marine wind and solar technology in shipping vessels this year.
Some ecommerce providers allow you to offer carbon-neutral shopping to customers. Look for apps that provide instant emission calculations so customers can see details about the item they’re purchasing. It’s important that providers have offset projects that are verified by internationally recognized third-party organizations to ensure their quality and integrity.
As a result of the pandemic and sustainability concerns, around 56% of consumers are shopping at neighborhood stores or buying locally sourced products. Brands with physical locations can tap into these customer preferences to combat shipping delays as well.
💡 PRO TIP: With Shopify, you can get your products found by more nearby shoppers looking for what you sell on Google. List your products on Google for free, show pickup availability to increase store visits, and measure how your listings impact store sales from Shopify.
Mitigate shipping delays at your store
Now that you know the main causes of shipping delays, you’re ready to put in place these strategies to minimize their impact on your retail store in 2022.
Whether you run a thriving ecommerce store or manage a physical retail location, these tactics will help your business succeed in spite of current challenges.