Shopify Shipping

What Is Shipping

Shipping is an ecommerce metric that measures a business’s efficiency in delivering goods to buyers.

It encompasses a variety of data that directly impacts the success of an online store.

These include shipping cost as a percentage of revenue, average shipping time, shipping accuracy, on-time delivery rate, shipping return rate, shipping cost per order, and similar indicators.

How to Calculate the Effectiveness of Your Shipping Services

To calculate the effectiveness of shipping services, there are several different performance indicators you can measure.

Now, the exact key metrics you include vary among businesses, but they generally include on-time delivery rate, shipping accuracy, shipping return rate, and customer satisfaction with shipping.

Here is one general formula you can follow:

Shipping Effectiveness = (On-Time Delivery Rate + Shipping Accuracy + Customer Satisfaction with Shipping) / 3

Again, the formula can include more or fewer metrics, depending on the specific needs and goals of the ecommerce business.

Let’s say an ecommerce store wants to evaluate its shipping effectiveness for the last month and it collected this data:

• On-time delivery rate: 90% (Out of 100 orders, 90 were delivered on or before the promised delivery date)
• Shipping accuracy: 95% (Out of 100 orders, 95 were delivered accurately without errors)
• Customer satisfaction with shipping: 4.5 out of 5 (Based on customer surveys and feedback)

Let’s put the formula into action:

Shipping Effectiveness = (90% + 95% + 4.5) / 3 = 89.83%

In this example, the shipping effectiveness of the ecommerce store for the given period is approximately 89.83%.

This means that the shipping services are performing well, but there’s still room for improvement.

How to Improve Shipping Services

Optimizing shipping-related metrics is crucial for any ecommerce business. It contributes to more sales, better customer loyalty, and an overall positive brand reputation.

To improve your shipping services, you need to evaluate your weakest areas and start from there properly.

That said, here are some general strategies that can be useful in any ecommerce business:

• Simplify the returns process: Establishing a hassle-free returns process is crucial for customer trust. You can do this by providing prepaid return labels or offering a choice of return methods, such as drop-off locations or pickup services. Too many ecommerce businesses complicate this and in turn, lose customers that would otherwise continue shopping on another occasion.
• Use geo-fencing technology: Geo-fencing technology enables businesses to introduce location-based delivery options for customers within a specific radius of their physical store or warehouse. This allows for ultra-fast, same-day delivery, which can be a huge competitive advantage, especially in densely populated urban areas.
• Surprise customers with personalized additions: Including surprise personalized additions like handwritten thank-you notes or small branded gifts goes way beyond what most brands do. These thoughtful touches are great for building an emotional connection with customers and making them feel appreciated, which has a significant impact on retention and loyalty.
• Create a gamified shipping experience: A gamified shipping experience adds an element of fun to the shipping process. For example, you can organize that customers can earn points, badges, or unlock rewards for choosing eco-friendly shipping options, sharing their delivery experience on social media, or referring friends to the store.

More resources to help you improve:

• Ecommerce Analytics 101: How to Drive More Online Sales with Data
• 20+ Ecommerce Statistics to Improve Your Online Store’s Performance in 2023
• 7 Ecommerce Personalization Examples to Help You Come Up with Your Own
• 16 Best eCommerce Integrations for Converting Browsers into Buyers
• The 17 Best eCommerce Tools for Growing Your Online Store
• 9 Customer Segmentation Tips to Personalize Ecommerce Marketing and Drive More Sales