Team eCommerce Next interviewed Kiel Harkness from UPS Capital to get more insights from customers such as PROOF Ice Cream, LegacyBox and Freight Club. Following is our interview with him:
What have been the biggest hurdles faced by SMBs this holiday season?
SMBs have faced a lot of the same issues other businesses have felt this year, from global delays to rising prices. Supply chain issues have been a pain point for SMBs, with 33% of customers expressing concerns about supply chain delays when it comes to their holiday shopping, according to the UPS Capital 2021 Holiday Shipping Experience Report. With tighter budgets and margins, SMBs are increasingly being squeezed out in favor of big box retailers who have resources like large capital, higher inventory, and the technology to give customers a premium shipping experience. This situation can potentially harm SMBs who risk losing customers to bigger retailers if they can’t deliver similar, seamless shipping experiences.
What are the trends driving consumer spending this year?
Heading into year end, folks are dealing with inflation, drastically impacting consumer spending. UPS Capital’s survey found nearly 50% of consumers plan to spend less this holiday season as a direct result of inflation. Fears of supply chain issues causing shipping delays forced consumers to start shopping earlier than before. The same survey found nearly 70% of consumers are worried supply chain issues will prevent their orders from arriving on time, and 35% would be motivated to purchase from a retailer if offered guaranteed replacements for lost or damaged packages.
How does inflation factor into the equation for SMBs looking to stay competitive?
Inflation touches more than just consumers who are looking to cut down on spending this year – for SMBs, consumers cutting back means there’s less chance to make ground against big box retailers. Nearly 50% are worried about the downstream impact of inflation on their bottom line, according to UPS Capital’s survey. For the smaller ecommerce business owners that can’t compete against bigger companies, the best way they stay competitive is by offering a world-class customer experience (CX). SMBs should be as transparent as possible with customers to ensure timely deliveries of goods, and have open lines of communication to update when items are out of stock, to share the status of replacements items, and more.
What is the impact of shipping on customer experience?
A positive shipping experience translates into a good CX, which directly translates into happy customers. UPS Capital’s holiday survey reports that 82% of customers will shop with an SMB if they offer free shipping and 45% will shop with you if you offer one or two day shipping. The trick is getting it right when things go wrong. Nearly half of consumers (44%) say a lack of resolution support for stolen or damaged packages would cause them to never shop at a retailer again. By making customers feel seen and heard after an incident like porch piracy or a supply chain delay, you help build a foundation of trust with customers that is essential to retention.
What are some ways that SMBs can help retain customers if something goes awry with their order?
SMBs have lots of options to help make things right if a shipping issue arises. UPS Capital’s survey found that consumers look past traditional offers from companies like discounts on future purchases and refunds – those are nice offers, but consumers want a resolution, rather than a band-aid. Nearly half (44%) of all consumers say they’d never shop with an SMB again over a lack of resolution for a lost package, while 39% say a lack of communication around delayed deliveries drives them away from shopping with a retailer again. SMBs can offer resolutions for customers in the form of free expedited shipping on a delayed product, or expedited replacements in the event of a lost or stolen package – 35% of consumers say they’d purchase if a replacement is guaranteed. Keep the lines of communication open, offer opportunities to share feedback, create solid omnichannel networks to align in-store and online experiences to meet customer needs, and enable a positive post-sales experience by using shipping insurance to reship a replacement quickly and maintain trust in the wake of a shipping mishap.
How can SMBs prepare for surges in demand, like what we’ve seen in the past year as a result of the pandemic?
With the roadblocks businesses and consumers faced this year, there are several ways SMBs can address issues before they become problems. Offering timely promotions will ensure delivery before Christmas – you could even set a deadline to place an order for optimal transparency. Leverage electronic inventory management systems that updates your eCcommerce site, so customers aren’t placing orders for out-of-stock items. Lastly, obtain coverage for shipments to mitigate the financial hit you and the customer take in the event of a shipping mishap – you’ll save on the unexpected expense and the customer has a positive experience.
About Kiel Harkness
As VP of Global Marketing and Business Intelligence, Kiel connects UPS Capital’s digital insurance solution set with small businesses across the U.S., Europe, and Asia to create positive outcomes for customers. Kiel harnesses his experience with insurance, small businesses, and insuretech to offer small businesses solutions they can access, afford, and grow with as they navigate business cycles through domestic and global market trends. UPS Capital is the shipping insurance division of UPS, providing package and freight shipping insurance for any carrier, by land, sea and air.
About UPS Capital
UPS Capital is the shipping insurance division of UPS, and they provide package and freight shipping insurance for any carrier, by land, sea and air. They deliver the brighter side of shipping by anticipating and removing pain from the process for small and medium sized businesses, by giving them peace of mind that their customers will have better post-purchase experiences.