5 Ways Retailers Can Increase Conversions

September 8th, 2014 @ Newgistics

E-commerce has taken “window shopping” to a whole new level. It’s become so easy for shoppers to compare products by skipping from one online store to the next that getting them to stay on your site and actually make a purchase is becoming increasingly more difficult. Here are five tips to help customers stay on your site and convert from shoppers to buyers.

  1. Include compelling images and videos. It’s common sense, but countless studies have also proven that shoppers are more likely to connect with a product – and make a purchase – if they can interact with it online. People want to feel like they know everything possible about a product before making the decision to buy, and as they say, a picture is worth a thousand words. Striking images can go a long way in drawing in a customer, so you should make sure to include a number of them on product detail pages – from all different angles and levels of detail, and even shots of the product in use. Taking this a step further, video is a great option and is becoming easier for shoppers to view as broadband and mobile speeds get faster. Investing the resources to create videos, or working with a manufacturer or supplier to include videos they already have, could be well worth your time.
  2. Design for mobile. According to comScore, consumers spend more time browsing online retail sites on mobile devices than they do on desktops – 62 percent of their time to be exact – and that number is only expected to grow. Retailers need to make sure that shoppers who visit your site have a pleasant experience, no matter what device they’re using. This can be complicated because there are so many variations of mobile operation systems, device manufacturers and screen sizes, but you have to account for all of them. Responsive Web design is a good place to start, but sites should also be adaptive so they can recognize a device profile and adjust how they serve content to create the best possible experience
  3. Optimize the funnel. Nobody likes to have their time wasted, especially online shoppers who are looking for ease of use and convenience. Try to minimize the number of clicks they have to make and screens they have to view before checking out. The shorter the process, the less chance they have to abandon their cart in the process. This is becoming even more important as mobile becomes the most prominent channel. A customer may be on-the-go and looking to make a purchase quickly, but no matter where they are, remember that they could be on a device that has a small screen size and no keyboard. Because of this, the steps from product discovery to checkout must be quick and seamless. Retailers can minimize clicks by doing things like allowing frequent shoppers to create accounts on their site that stores shipping and payment information.
  4. Address shipping & delivery details up front. One of the best things you can do is offer free shipping. This has become so common for many of the major online retailers that customers have come to expect it. In fact, not offering free shipping can be a major cause for cart abandonment. But remember, free shipping is not really free for the merchant and the money has to come from somewhere, usually an operations or marketing (promotions) budget. Offering free shipping with a national carrier is far too costly for many merchants, but solutions like Newgistics can offer more competitive pricing on delivery and returns, and even offset those costs by improving efficiencies in the process. For example, insight into what’s returning and when it will arrive can help optimize staffing and inventory management, and minimize call center requests. When customers see a shipping and returns policy up front – especially if that includes free shipping and returns – they’ll be more likely to continue to checkout.
  5. Speed it up! Getting back to people’s valuable time, no one likes to wait. If a site takes too much time to load, it’s going to lose shoppers. Retailers need to test site performance to ensure it’s tuned-up, especially for the busiest times of the year. Last month, a post on The Gist provided some tips about making a site peak performance ready, and it’s a good place to start if you’re looking for tips on how to optimize a site for speed.
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Newgistics Brings Deep Retail and E-Commerce Expertise to its Board with Addition of Andrea Weiss and Robert Rosenblatt

August 27th, 2014 @ Newgistics

New Board Members Bring Decades of Leadership Experience from Companies Such as Limited Brands, Guess?, GSI Commerce, Tommy Hilfiger and HSN

AUSTIN, Texas – August 27, 2014 – Newgistics, a leading provider of end-to-end e-commerce solutions for top retailers and brands, today announced that Andrea Weiss and Robert Rosenblatt have joined its board of directors. With decades of experience guiding some of the retail industry’s most successful and recognizable brands, Weiss and Rosenblatt bring first-hand knowledge of what retailers need to compete in an increasingly omni-channel environment.

With 30 years of retail expertise, Andrea Weiss has been a key player in retail’s transformation into the digital space. An early innovator in multi-channel commerce and a pioneer in creating seamless customer experiences, Weiss’ executive positions have included president of Guess?, chief stores officer of Limited Brands and senior vice president of Ann Taylor. Her extensive board service includes current roles at Chico’s, Pep Boys, Cracker Barrel Old Country Store, Inc. and Nutrisystem. She also served on the board of GSI Commerce during its rise to becoming a leading e-commerce platform and, ultimately, its sale to eBay.

Weiss is the CEO of Retail Consulting, Inc. (RCI) and founder of The O Alliance, an innovative consulting model designed to help retailers align their organizational practices with the needs and expectations of today’s digitally savvy consumer.

“Putting the consumer at the center of the retail ecosystem is vital to success and growth in today’s omni-channel environment,” said Weiss. “With a true end-to-end offering and a clear vision for how they can help retailers deliver the seamless experience that consumers have come to expect, Newgistics is a pivotal partner to forward-thinking companies in our industry. Helping them bring that vision to market is an exciting opportunity for me.”

Robert Rosenblatt has more than 25 years of experience leading mid-sized and large retail organizations, including Tommy Hilfiger, HSN (formerly the Home Shopping Network) and Bloomingdale’s, and recently served as interim president of Ideeli.com, a flash sales company that was acquired by Groupon. As group president and COO of Tommy Hilfiger, Rosenblatt grew revenues and profitability and built the company’s first transactional website. Before that, he held positions as CFO, COO and president of HSN, where he introduced and built its online operation, leading it to profitability three months after inception. As CFO of Bloomingdale’s, he was responsible for the company’s P&L, financial planning and administrative management and, before that, served as vice president of store operations.

“The retail industry is clearly at an inflection point where digital commerce, including omni-channel offerings that are intuitive for consumers, is what’s going to propel growth,” said Rosenblatt. “Instead of trying to patch all the pieces together, Newgistics presents a compelling value proposition to its clients – one that I believe in and can help guide to meet retailers’ and consumers’ needs.”

In addition to his extensive experience working for leading retail brands, Rosenblatt currently holds a number of board seats for leading companies in the technology and retail industries. He also runs Rosenblatt Consulting, which specializes in helping investment firms determine value in both public and private consumer companies, as well as helping retail firms maximize profitability.

“Andrea and Bob bring a tremendous wealth of knowledge to an already impressive board,” said Bill Razzouk, Newgistics’ CEO. “Newgistics has a history of innovation, going all the way back to our introduction of the Newgistics SmartLabel, which revolutionized e-commerce returns at an important point in the industry’s growth. We haven’t stopped since then and now have all the pieces to lead the charge into true omni-channel experiences. Andrea and Bob will be important players in helping us do so more quickly.”

About Newgistics, Inc.

Newgistics, a leading provider of parcel delivery and returns management for top retailers and brands, combines logistics and leading omni-channel commerce technology into a complete e-commerce solution. Integrating every step in the order life cycle, our end-to-end e-commerce solution includes: web design, implementation, integration, web hosting and support, order fulfillment, parcel delivery and returns. Our e-commerce platform is powered by hybris and we have partnered with Manhattan Associates to bring its leading order management solution to our customers. Since 1999, Newgistics has provided top merchants with innovative technology-driven solutions that improve the customer experience and accelerate growth—from customer acquisition through fulfillment, delivery and returns. To find out more, visit http://www.newgistics.com.

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Content and Commerce: Finding the Right Balance for Your Brand

August 26th, 2014 @ Newgistics

In the early days of e-commerce, it was enough to have a nicely designed website that sold goods. As competition heated up, that was no longer good enough. Retailers needed to differentiate themselves from the competition and began introducing site personalization, single page checkout and a slew of other features designed to help shoppers make buying decisions and quickly usher them through the checkout process.

And yet, for today’s shopper, retailers realize they need to go even further. They need to be a trusted advisor in their respective field. Whether selling tools or toys, pets or polo shirts, retailers are integrating specialized content into their sites to encourage repeat visits, engender brand loyalty and, ultimately, increase sales. This is where content and commerce meet.

There are a number of ways in which retailers are integrating content into their e-commerce sites. One popular way is by making the e-commerce experience more editorial in nature, which is often referred to as contextual commerce. For instance, a home décor retailer may offer advice and how-to articles to help customers achieve a desired look, while offering a seamless transition from content to product. Product-related content, on the other hand, helps customers with tools such as instructional videos and product configurators, much like Converse’s Design Your Own feature. Many retailers, especially those targeting younger demographics, are also leveraging user-generated content – blogs, forums, videos and social media (Instagram, in particular) to create branded e-commerce experiences for their customers. This content is often designed to inspire shoppers to achieve a similar look or style as their peers.

But when integrating content with commerce, the challenge for many retailers is two-fold: finding the right balance of content for your brand (contextual vs. user-generated, for example) and shifting to a culture of content, rather than one solely focused on getting users from discovery to checkout as quickly as possible. Retailers that decide to integrate a content strategy will need to determine which content type is most on-brand and also rethink their KPIs and how they define success within the organization. Building and fostering a culture of content means highlighting key wins (repeat visits, longer site times, increased AOVs, etc.) early on to get all stakeholders on board with the new approach.

In the end, retailers understand that an engaged customer is a loyal brand advocate and they need to find new ways to not only bring them into their online store, but to also keep them coming back time and time again. And, the content and commerce hybrid is proving to be an effective strategy to do just that.

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Holiday Prep Part 2 – Get Your Site Peak Performance Ready

August 21st, 2014 @ Newgistics

To say that the holidays are peak season for retailers is an understatement. For some, the bulk of their yearly sales take place during the weeks leading up to Christmas and New Years, this means there is no room for error in the customer experience during this time. Last week, we shared some thoughts on The Gist to help optimize the holiday shipping and returns experience, and to cover the full e-commerce lifecycle,  this time around we’re going to focus on site performance.

Even just minutes of downtime on a given site could cost a retailer millions, so to prepare for the holiday rush we recommend conducting an in-depth site performance analysis.  Here’s what you need to consider:

Traditional Site Performance Tests Won’t Cut It

Most methods for site performance analysis are insufficient and rely on a page-based approach in which the load times of a set of web pages like product detail, product category and the shopping cart are recorded. In this flawed testing scenario, all of these times are then averaged to benchmark the site’s overall performance. If that average meets a certain benchmark the site is considered ready. That’s akin to standing in a parking lot with a stopwatch while cars leave to run errands and hitting “stop” upon each as they return. These traditional performance tests always follow the “happy path” with a fully functional, idyllic system. As a result, when a problem does occur in the real world, there is no insight as to what caused it.

A Deeper Analysis

To really test your site performance you must go deeper. This deeper look can reveal the cause of the congestion as it could be related to any number of real-world occurrences such as a poorly timed traffic light or detour. Each potential bottleneck is referred to as a “wait point.” Much like the traffic light at an intersection inside of a city, a wait point in software is a point at which work queues due to limited access to a resource – often a third-party system. As with a traffic light outage, if order processing is slow or offline customers will be left waiting. This effect ripples through other streets, creating traffic jams throughout the city or in the e-commerce world cause customers to drop off before making a purchase.

How Newgistics and Tacit Knowledge Can Help

Peak Ready Performance is a proprietary in-depth approach Tacit Knowledge has developed for site performance analysis and remediation that ensures your e-commerce applications are resilient, durable and ready for the holiday season. The Peak Ready Performance Approach begins by identifying all of the aforementioned wait points, as many are unique to a particular online store. Tacit tests each wait point in healthy, slow and failure modes using two open-source technologies. The first is the Simulator, which mimics the behavior of any third party system complete with real-world failure scenarios. The second is Slow Light, which acts like molasses, slowing down the speed of each response from the Simulator. Two load tests: slow and stop, are run for each wait point (usually about eighty in total). Tacit carefully monitors the site’s behavior, and modifies the supporting software so that it becomes resilient under these conditions. For example, should a payment gateway for credit cards experience an outage, the online store would either accept alternate payment methods only or gracefully queue orders for later processing. Traffic would be re-routed around the obstacle until connectivity was restored.

For sites already developed or under active development, Peak Ready Performance can be used to identify a list of all wait points, catalog their behavior under exceptional conditions and describe recommendations for remediation. Tacit Knowledge also provides professional services to implement the recommendations and rectify the online store. Here is one real-world example:


Beaverbrooks is a luxury brand eCommerce site that relies heavily on rich, photographic imagery. We wanted to assure a level of quality commensurate with this iconic, luxury brand. Working with Tacit, Beaverbrooks has maintained an uptime of 99.996%, and an average of one-second page response times despite traffic spikes in excess of four times normal.

Is your site in tip top shape? If not, the clock is ticking. You should be putting your sites to the test now so that you are ready for whatever comes this holiday season. For more information on holiday readiness and Tacit Knowledge’s Peak Ready Performance, please visit: http://www.newgistics.com/holiday-preparedness.

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Holiday Prep Part 1 – Getting Your Holiday Shipping Plans Wrapped Up Now

August 12th, 2014 @ Newgistics

During the holiday season, when gifting and, subsequently, returns are at an all time high, the methods in which retailers handle each part of the e-commerce lifecycle are critical. As retailers strive to become increasingly omni-channel, this means providing a seamless approach through the entire consumer experience across all available channels or risk losing shoppers to the competition. In this post, we are going to focus on shipping and returns, an area of the shopping experience that came up particularly short last year.

A lot of factors contributed to the nightmare of shipping delays that occurred last holiday season – from weather-related issues to retailers getting aggressive on delivery timelines and last-minute promotions that caused a record surge in online purchases. In the coming months, with FedEx® and UPS® switching to dimensional weight pricing (also referred to as DIM pricing), the perfect storm may be right in front of us and retailers needs to prepare themselves accordingly.

Here are a couple of things to consider when nailing down your holiday strategy for shipping and returns:

  • With more touchpoints to master, many retailers are struggling to cover them all with one branded shopping experience. Returns, for instance, are a key part of the shopping lifecycle, but have always had a negative connotation for retailers and, as such, are not always considered part of the omni-channel mix. The fact is for shoppers the shopping experience does not end with a delivered product but extends beyond into post sale activities such as returns, exchanges and call center responsiveness.  So, what if you could create a return experience that was so pleasant and well-received it resulted in another (possibly larger) sale? By maintaining brand control throughout the entire shopping experience, retailers will be at a competitive advantage and will have the opportunity to convert one-time holiday shoppers into brand loyalists. We discussed this in depth in our recent feature in Retail Touchpoints magazine which can be found here: http://retailtouchpoints.com/features/special-reports/holiday-planning-heats-up-as-summer-sets-in.
  • Always prioritize convenience for your shoppers. To do this effectively you may want to consider using a prepaid return label so that the consumer can easily return items by leaving them in their mailbox for USPS pick up, drop off at their local USPS location/blue box, or set up “free carrier pickup.” This makes the returns process far easier for the consumer while at the same time provides advanced visibility into what items are coming back to a warehouse.
  • Make sure your shipping and returns strategy has a clear-cut communication method. This includes clearly posting cut off dates for outbound shipments (to ensure the order arrives by the date needed) and posting your returns policy online. Clearly setting these expectations ahead of time will save you from a lot of unhappy customers. This communication strategy should also include transit emails to update consumers on the status of their order/return. This provides you with the opportunity to include a special offer to re-engage them and drive incremental business.
  • Plan for the switch to DIM pricing.  Returns could cause a major headache if consumers and retailers aren’t aware of the changes that UPS and FedEx are implementing just after holiday gifts are delivered and just before returns and exchanges are made. Remember, if a customer orders four items, but only returns a single item in the same outbound package (which is typical), the DIM issue is exasperated as the weight is less for the same size package. Retailers who pack free return labels with their holiday shipments could be blindsided by the cost of returns shipped after December 29 with UPS or after January 1 with FedEx – when the changes take hold.  Same goes for consumers who are picking up the cost themselves. They have to understand that size now matters, so returns must be packed efficiently instead of just picking any empty box that was once under the Christmas tree. Retailers may want to consider diversifying their shipments with a provider that offers a solution that does not charge for dimensional weight to offset the costs.

Omni-channel is clearly the hottest buzzword of the season and in our next post we’ll be discussing Web and mobile site performance, including methods for site performance analysis that should be executed to ensure success in the peak holiday season. Stay tuned!

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The Winners Circle – Bahamas, May 2014

August 7th, 2014 @ Newgistics

Recognizing a job well done is an important value at Newgistics and when our team members go above and beyond — by applying great thought, leadership or team spirit to make a material contribution to the company — we like to reciprocate.  This year, we sent a group of employees to Paradise Island in the Bahamas for some rest and relaxation at Atlantis.

The Bahamas trip was this year’s Newgistics Winners Circle Event, organized to thank people who received the company’s three highest awards.  Those awards are:

The CEO 5-Star Award – an annual recognition for contribution to the company at its highest level.  This is bestowed on teams or individuals who make a sustainable return to the company and who have consistently lived the five Newgistics Values in executing their responsibilities.

The President’s Club – awards focused on Newgistics’ sales organization for individuals who have achieved significant milestones in closing new business.  This includes those who have met or exceeded annual sales quotas or have booked the highest amount of revenue for the year.

The MVP Award – a semi-annual award recognizing individuals who have proven to be a “Most Valuable Player” for the organization and consistently displayed the Newgistics Values in carrying out their duties.

Once again, we’d like to send a heartfelt thank you and congrats to all of this year’s award recipients for a job well done.  It looks like everyone had a great time in Paradise!

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E-Commerce: The Single Most Critical Channel For Growth

August 1st, 2014 @ Newgistics

The writing isn’t just on the wall, it might as well be in the sky – e-commerce is going to continue driving retail growth for the foreseeable future.  While in-store sales have been essentially flat, e-commerce is the shining light that’s helping retailers improve profits and revenue.

A recent comScore presentation, “State of the U.S. Online Retail Economy in Q1 2014,” demonstrates just how significant the e-commerce impact has been.  According to the presentation, sales at brick-and-mortar retail stores were up by only one percent year over year in the first quarter, while e-commerce showed 13 percent growth.

Overall, desktop sales accounted for 88 percent of e-commerce revenue, raking in $56 billion in the first quarter.  Some other key measurements for desktop sales also showed significant growth, with the number of U.S. shoppers purchasing online up by 9 percent to 190 million, and average order values up 10 percent to $78.

Desktop e-commerce sales are what’s adding real revenue right now, but the future is definitely in mobile devices. Mobile commerce accounted for nearly 12 percent of all digital dollars in the first quarter, a one percent increase from a year earlier, but over the past year the shift in people’s browsing habits continues to skew more toward mobile.

In March 2013, 53 percent of all time spent browsing retail sites came from mobile devices, and a year later that number increased to 62 percent, with time spent browsing on smartphones and tablets both experiencing gains.  Smartphone browsing went from 37 percent of total time spent in 2013 to 43 percent in 2014, while tablet browsing went from 15 percent to 19 percent over the same period.

In addition, mobile is making its mark within the growing trend of omni-channel commerce as well. While purchases made on mobile devices will be extremely important, and figuring out how to improve mobile conversion rates is currently a challenge for everyone in the industry, it’s also important to understand the additional impact that mobile can have on other channels. Among mobile phone searches that ultimately result in a purchase, 73 percent of those purchases are made in a store, 16 percent are made over the phone and only 11 percent ultimately result in an online purchase.

The big takeaways from comScore’s data are that e-commerce is, and will continue to be, the largest channel for growth and more specifically, mobile is playing an increasingly important role.  Retailers must keep an eye toward improving the digital experience for their customers, which could encompass a number of strategies including websites and apps for desktops, smartphones and tablets.  This is the only way they’ll survive in the omni-channel world that their customers have come to expect.

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5 Things That Make Newgistics a Great Place to Work

July 23rd, 2014 @ Newgistics

The Austin American-Statesman has named Newgistics a Top Workplace multiple times over the past few years, so we thought it would be worth giving you, our friends and followers, an inside look at what makes the company so great. Here are the five factors that top our list:

5. Innovation – From the top executives down to everyone else within the organization, Newgistics employees are encouraged and given the tools they need to innovate and find better ways of doing their job.

4. Recognition – People shouldn’t just be given feedback on things they need to improve, they should be told what they’re doing well too. Newgistics takes this a step further by regularly calling out our MVPs to give them the credit they deserve and provide an example for others to emulate and learn from.

3. Responsibility – Our team is encouraged and empowered to take on the challenging projects they want to tackle. For example, our engineering team is given the freedom to explore new technology areas so they can apply these cutting-edge technologies to solving business challenges for our clients.

2. Rewards – In addition to competitive salaries and benefits, our team is rewarded for a job well done through things like trips to the Caribbean for winners of our MVP awards.  Perks such as free food in the kitchen don’t hurt either!

1. People – Time and time again, and in all different forums, when our employees talk about working at Newgisitcs, they cite their colleagues as one of the top reasons they like coming to work every day. The smart, talented and driven people at Newgistics are, without question, our best asset.

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The Impact Digital, Social and Mobile Will Have on Back-to-School Shopping

July 21st, 2014 @ Newgistics

Back-to-School Shopping is a Year-Round Activity for Digital Natives

Last week, the National Retail Federation (NRF) released the results of its annual back-to-school spending survey. Total back-to-school spending is forecast to hit $74.9 billion in 2014, up from $72.5 billion last year. The average family with children in grades K-12 will spend $669.28 (up 5 percent from last year) and the average back-to-school spending for a college student is expected to rise 10 percent to $916.48.

According to the NRF survey:

  • More than a third of back-to-school shoppers and 45 percent of back-to-college shoppers plan to make a portion of their purchases online
  • More than half of back-to-school smartphone-owning shoppers plan to use their devices to compare prices, 40 percent will look up retailer info, and 37 percent plan to redeem coupons and purchase products from their phones
  • Three in five tablet-owning back-to-school shoppers anticipate researching products and comparing prices, while nearly half expect to purchase products from their tablets

In addition to NRF’s findings, Cassandra Report revealed that 54 percent of shoppers will do more pre-purchase research than they did just five years ago. And, in a recent study of back-to-school shopping habits, eMarketer found students and parents start researching their back-to-school needs long before stores notice an uptick in purchases – last year 23 percent began back-to-school research before July 4, with nearly two-thirds (65 percent) starting by the end of July, according to a Google/Ipsos study of the 2013 season.

With the shopping season in full swing, retailers need to be sure they are meeting the needs of consumers looking for inspiration online. The NRF suggests, and we agree, that visual imagery and user-generated content are powerful influence factors as shoppers conduct their research. Photography is what sells the product, so spend the time and money to create great imagery. In apparel, a popular back-to-school category, make note of the size the model is wearing and offer five times the normal zoom so shoppers can see product details. And, don’t forget the power of online video in increasing digital conversions. We also suggest clearly articulating shipping and returns policies online (how long do shoppers have to return an item, will the money be refunded to the card used or offered as a store credit, etc.). This increases the comfort level in making digital purchases, especially for high-consideration, big ticket back-to-school items such as electronics.

Is your back-to-school strategy meeting the needs of shoppers looking to digital channels for inspiration this year? If not, there’s still time. According to the Google/Ipsos study, “As mobile natives with near-universal access to the Internet, teens and college students are shopping throughout the school year and are less reliant on parents or friends for rides to the mall to do their shopping.” This is great news for retailers targeting teens and college students as they can extend the “back-to-school season” year-round.  Even though a prolonged season being the new normal, now is the time for them to develop a strategy for providing inspiration via Instagram, Twitter, Vine and other social channels, as well as on their own e-commerce sites.

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Dimensional Weight Pricing: What FedEx® and UPS®’s Recent Move to DIM Pricing Means for Retailers

July 15th, 2014 @ Newgistics

UPS has just announced that it will be joining FedEx in its move to dimensional weight shipping pricing for its ground services (cue the consensual groan from etailers and retailers alike). Like FedEx, UPS ground prices will now be based on the higher of two calculations, dimensions (LxWxH) divided by dimensional factor or weight.

So what does this mean exactly? To clarify, FedEx ground currently charges dimensional weight pricing only to packages measuring three cubic feet or greater but effective January 1, it will apply to all packages.  UPS also already applies dimensional weight pricing for UPS air services (domestic and international), UPS Standard™ to Mexico ground services and for UPS® ground packages and UPS® Standard to Canada packages measuring 3 cubic feet in size or larger. Effective December 29, 2014, dimensional weight will be utilized to calculate the billable weight of a shipment on all UPS ground services and UPS Standard to Canada packages.

UPS Chief Operating Officer Alan Gershenhorn said in a statement, “UPS has been researching the potential expansion of dimensional-weight pricing for a number of years because it enables us to more appropriately align rates with costs, which are influenced by both the size and weight of packages.” According to a press release put out by UPS, “The company believes that as a result of the dimensional weight pricing method, more shippers will seek to optimize their packaging practices. These efforts will reduce excess packaging materials and overall package sizes, leading to related reductions in fuel use, vehicle emissions and transportation costs.”

Jerry Hempstead, president of Orlando, Florida-based parcel consultancy Hempstead Consulting, said it best when he told Supply Chain 24/7, “This is a very big change in pricing. There is no additional cost for the carrier. There is no additional service they are adding. They are just going to charge more for that which they have been doing for years.”

Retailers need to recognize the affect this will have on their business as this is the most dramatic increase in shipping costs we’ve seen in 15 years. Small to medium sized businesses will be most affected as they’ll likely need to adjust their pricing to make up for the increase in cost.

Here are a few things for retailers to consider:

  • Consider diversifying your shipments with a provider who offers a solution  that does not charge for dimensional weight to offset the costs associated with a national carrier (you don’t have to put all your eggs in one basket)
  • Work with an end-to-end solution provider with the expertise necessary to offset additional fulfillment and shipping costs
  • Be sure to educate your team on fulfillment logistics that are affected by this price change (box selection, etc.)
  • Require transparency in billing from your carrier to avoid costly mistakes

Changes to UPS and FedEx pricing won’t be instated until the end of 2014 (December and January respectively) but now is the time for retailers to reevaluate their shipping strategies and prepare for the holiday season and beyond. There are other options out there and retailers should not feel stuck in the UPS/FedEx box.

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