By David Marinkovich, VP Marketing and Field Sales, Newgistics
Trends in consumer behavior continue to indicate a changing attitude toward shipping options within the overall shopping experience. Market analysis shows that, despite relatively flat growth rates in the U.S. shipping market as a whole, the acceptance of value-based shipping is rapidly displacing premium time-definite services.
Why this transition? Aside from consumers watching their spending more closely, some carriers are facing continued pricing pressures (tied to core transportation services) and high fixed operating costs, leading them to modify their billing procedures and negotiate service agreements with shippers – and the higher rates get passed on to consumers. However, there are alternatives that can help shippers not only control costs, but also improve base service levels by leveraging untapped information and opportunities.
This is about more than just shipping: a company’s brand and reputation is on the line every time a customer places an order. While some merchants get consumed with evaluating each individual transaction, intelligent merchants look at the lifetime value of customer and implement services that meet the customers expectations in price, service, and performance – encouraging the customer to continually ‘invest’ in their brand.
Certainly, there are still customers who want the option to purchase time-definite, higher-cost shipping services – but considering the growing number of consumers demanding economical alternatives, prudent shippers must offer an variety of services in order to appeal to a the needs of the their most valued asset, the customer. Otherwise, they risk losing that customer to the big box retailer who may not offer the same level of convenience, but doesn’t tack on inflexible high-cost shipping, either. A comprehensive shipping offering can tackle these challenges and more – from increasing the lifetime value of a customer and reducing call center costs, to creating new marketing opportunities and streamlining IT processes.