ShipStation vice president for Australia and New Zealand, David Boyer reveals the major trends of 2023 and shares how this will influence shopping behaviour in 2024, and a preview of new features to be released by ShipStation in the coming weeks.
“Reflecting on 2023, we saw consumers shopping via marketplaces and we believe economic pressures shifted consumers to prioritise price over convenience and accessibility – similar to purchase behaviour during Covid,” Boyer told Retailbiz in a recent interview.
ShipStation’s 2023 Peak Season Report showed that around one in two online orders over the holiday season would be made via a marketplace, which is in line with the market dynamic of price sensitivity.
“In the report, we estimated that approximately A$389 billion would be spent globally over the peak season with growth in marketplaces outpacing the wider e-commerce market. More than two-thirds (68%) of global shoppers from the survey said shopping via marketplaces was their preferred way to shop, driven by price, ease and delivery speed, combining to provide a better shopping experience.”
In 2023, Amazon continued to solidify its playbook and expand inventory options to become a one-stop shopping destination for Australian consumers, according to Boyer.
“This has driven a waterfall effect to other marketplaces, such as Catch and eBay, all competing to deliver and exceed customer expectations,” he said.
“This compares to 2022 when many shoppers returned to in-store shopping. 2023 was a recalibration of pre-Covid ‘normal’ shopping behaviour with a mix of in-store and online. This means it’s imperative for retailers to offer a seamless omnichannel experience, unifying their digital and physical offerings – not only for the frontend but also the backend when it comes to facilitating and fulfilling sales orders across both channels.”
In terms of delivery, there has been a greater focus from our carrier partners on optimising costs to meet changing customer demand.
“We’ve seen Australia Post and Sendle restructure price points and discounts with a focus on price optimisation and there has since been more clarity around the regular trajectory for service offerings and finding the right balance between the delivery pillars of cost, speed and returns.”
Promising start to 2024
Falling inflation is welcome news for both consumers and retailers and if it’s a trend that will continue in the months ahead, Boyer believes the year is off to a good start.
“Aside from inflation, anecdotally, we’re seeing encouraging signs compared to the start of 2023 and 2022 when there was still a sense of hesitation with the lingering effects of Covid,” he said.
“This year, among new business customers, we’re seeing a lot of optimism and eagerness for the year ahead. This is supported by encouraging economic signals which show we’re back on pace to regular non-Covid related growth.”
From a business strategy standpoint, Boyer reiterated the importance of omni selling channels and ensuring the customer shopping experience is friction-free.
“We’ve seen and expect to see a continued trend for omnichannel shopping behaviour – this is your direct storefronts – bricks-and-mortar and website, combined with marketplaces, given the strong preference among consumers to purchase on marketplaces. It’s a necessity for retailers to consider marketplaces within their distribution strategy, and there’s no shortage of options in Australia. In addition to having a presence on marketplaces being of critical importance, merchants also need to carefully consider their returns proposition.”
The ShipStation Ecommerce Delivery Benchmark Report found that free online returns have become a consumer expectation with more than three-quarters (76%) of shoppers surveyed saying returns should always be free and their willingness to pay for returns is dropping. The report also revealed a huge disconnect between consumers and merchants around the importance of returns.
“Merchants need to meet in the middle because returns provide confidence in purchasing from your brand online – particularly for customers unfamiliar with your brand, styles, and size – it reduces the risk. There’s a lot of variances when it comes to managing customer returns and it’s critical that options are relevant, convenient and transparent for shoppers,” Boyer said.
“Another important factor is operational efficiency when it comes to fulfilment because it’s the lifeblood of completing your brand promise. We typically see an influx of businesses approaching us in September and October – often small businesses who are excited but nervous about the peak sales period and need assistance.
“It’s important that businesses are prepared well ahead of the peak season, especially considering holiday shopping can start well before Black Friday Cyber Monday, with promotional activity moving forward to as early as August and September.”
New ShipStation features
In 2023, ShipStation gathered feedback from its Australian customers to amplify its offering and provide even more value.
“In this quarter alone, we’re excited to be rolling out several new features,” Boyer said.
“The first is our Checkout Rates feature, which allows retailers to offer customers delivery options at checkout.
“The second feature, Shipping Strategies, takes automation to the next level. Retailers have been asking for guidance on how to determine the best carrier to fulfil a specific type of order. Essentially, it’s Least Cost Routing which takes out the guesswork by selecting the lowest cost rates for the destination based on the origin address and package parameters.
“The third feature, Custom Labels, is a bespoke label offering for packages that aren’t going through Australia Post or Sendle – it might be a pick-up order, something that can fit in an envelope and doesn’t need carrier integration, or for someone managing their own vehicle fleet. It’s a white glove premier connection built on a customised shipping label.
“We’re excited by these features, helping retailers to scale by simplifying shipping and achieving operational efficiencies.”
Keep an eye out for ShipStation’s annual E-commerce Delivery Benchmark report, set to launch next week. It delivers essential customer insights and highlights 2024 global trends, providing the keys to success in this dynamic environment.