The eCommerce boom has seen an exponential increase in packages being sent domestically and internationally by retailers.
Retailers who previously did not have to worry about exporting and shipping products, face mounting pressure to offer these services to remain competitive.
Shipping expert Rob Hango-Zada details how shipping has changed in recent years and what retailers can do to remain competitive.
How has shipping changed in the past five years?
The demand on business to consumer shipping has never been greater.
We have seen a tremendous increase in the number of parcels being shipped around the world as a result of the eCommerce boom.
There has been a significant push for faster, more transparent and ultimately, more reliable delivery experiences which has driven substantial changes in the industry.
As retail demand is shifting online, stores have turned into distribution centres and we are now seeing a rise in micro-fulfillment centres and on-demand delivery options becoming the new normal.
With this rise in demand, retailers have also opened their doors to customers in international markets and competition has grown in international shipping options which are now easier to access than ever before.
What are the challenges of shipping products internationally?
A big challenge of international shipping is understanding the market that you’re trying to crack.
Merchants have a tendency to adopt a ‘one size fits all’ approach because they experience success locally and think this will translate broadly – but more often than not, it doesn’t.
One of the first considerations for shipping goods internationally is recognising a demand for your product in a specific foreign market, then developing a cross-border strategy to translate currency, text, preferred shipping methods, marketing and communication to suit your international consumer.
Nuanced experiences are what drives revenue growth when shipping internationally, so understanding your foreign market the same way you understand your local one is a challenge, but it will pay off in the long run.
Besides this, getting a grasp of broader information for specific markets can be challenging – things like political environment, foreign exchange rates, free trade agreements, quarantine and legal specifications can make or break a business’ international shipping success.
When a lot of businesses start exporting internationally, they waste time doing everything manually – like booking couriers or printing out customs labels.
This can lead to retailers getting bogged down with orders, increasing the risk of fulfillment errors which then costs money and time when trying to retrieve lost goods.
Automating international shipping and fulfillment is the easiest way to avoid these logistical challenges.
How has the China-US trade tension impacted the shipping industry in Australia?
Australia is in a tough situation with the US-China trade war – on the one hand America is our largest direct investor – while on the other, China is our biggest trading partner.
We’re a resource rich country so we rely heavily on our exports, this makes globalisation a bedrock in our economy. If we were to see a collapse in one global market – Australia’s shipping industry would be heavily impacted as we could lose a large portion of our export potential.
There is a benefit in the Aussie dollar being weak against the USD – while it stays this way, smaller brands will look to expand their international reach, utilising fragile market conditions.
What are the challenges of importing to Australia?
When retailers look to import goods to Australia, they face challenges around valuation and classification.
Australia has strict quarantine and biodiversity laws, so classifying goods correctly is vital to meeting compliance regulations, but it’s easy to get wrong.
There are huge indexes to wade through in order to specify goods correctly.
Valuation is another tricky one – there are many niche inclusions and exclusions that determine the value of your goods and again, getting it wrong equals non compliance which leads to fines.
For a small or even medium sized business trying to import goods on their own, it can be a minefield with the potential for huge missteps.
How has technology changed the way products are shipped?
Robotics is prevalent in larger retail environments making lighter work of the order fulfilment process, speeding up times and increasing picking accuracy.
This is only the beginning as we are starting to also see autonomous vehicles supplement delivery networks, enhancing the speed and reliability of deliveries.
Augmentation – not complete replacement of human effort – will be the next big wave of innovation in how parcels are shipped.
How do you foresee the industry looking in the future?
The Australian shipping industry is bound to become more and more competitive as the barriers to entering international markets become lower.
Digital shipping and logistics platforms will make it easier for small businesses to think globally as the demand for cheaper, faster and more convenient delivery grows.
Providing multiple shipping options and seamless returns will be a focus as retailers look to retain customers – the cost of acquiring new consumers continues to be a challenge so increasing purchase frequency through improved customer experience will drive the shipping industry's growth.
A macro theme at the forefront of consumers minds is sustainability – the shipping industry is becoming more mindful of waste looking to recyclable, even compostable, packaging.
This is already a priority for conscious consumers, so shipping providers must keep up.
Final tips?
If I could offer three key tips for retailers looking to expand their shipping reach, they would be:
• Standardise your offerings – for example set fixed price duties and taxes – to take the guesswork out of shipping
• Get to know your customer implicitly and understand your competitive set to determine what offering you want to create for an international market
• Focus on marketing – it’s crucial to know how your customer processes payments and navigates their shopping cart