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How to Prepare for an Unprecedented Holiday Shopping Season

November 10th, 2022

Inflation and supply chain issues are slated to continue affecting the holiday season. Traditionally, the holiday shopping season is the most eventful time of year for businesses. However, with ongoing financial difficulties for customers and merchants alike, your customers are going to be cutting back on their holiday purchases. This means your business needs to listen to your customers and not be afraid to let them lead the way while organizing your holiday sales strategy. Back in August, we partnered with Retail Economics and surveyed merchants and customers about their plans for this year’s holiday season and found a disconnect in expectations. We’re going to share all of these findings with you as well as tips for reframing your sales plans to better reflect the sentiment of customers. 

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The Disconnect Between Merchants and Customers 

One of the most important things to note about our findings is the current disconnect between merchants and customers. Here are a few of the main areas of contrast: 

  • 58% of customers say they plan to cut back on holiday shipping while 50% of merchants expect to increase their sales to increase this holiday season. 
  • 30.3% of customers say the cost of shipping is the biggest factor when deciding whether or not to buy from a business, but 34.7% of merchants plan to increase their shipping costs to offset inflation and other financial difficulties we’re facing this holiday season. 
  • 20.8% of customers say the delivery timeframe is the most important factor when considering a purchase, but 26.2% of merchants plan to update their shipping timeframes to offset costs. 

Customers are making their expectations and holiday shopping plans clear. For a successful holiday shopping season, your business may need to better align with your customers. For example, let your customers’ buying habits dictate your inventory strategies. Pay attention to which items are selling and which aren’t as well as the rate at which your products are selling to avoid a large amount of unsold inventory at the end of the season. Also, consider cutting costs in other areas by ordering free packaging from USPS and other carriers where available instead of increasing your customers’ shipping costs and/or using services with longer delivery windows. 

Where are Customers Planning to Cut Back?

58% of customers are planning to cut back on their holiday shipping, but where are these cuts going to occur? Out of our surveyed customers, three areas of products ranked the highest: 

  • Apparel – 26% 
  • Electronics – 22.3%
  • Toys – 20.9% 

If your business focuses on apparel, electronics, and/or toys, don’t panic. These insights are meant to help your business adjust your holiday shipping plan to better fit that of your customers. For businesses in these categories, we recommend focusing on promotions and deals. Look for bundling and discount opportunities for your products. For example, if your customer buys a pair of pants, run a promotion where another clothing product is free or heavily discounted. Your customers are going to be looking for deals wherever available, so your business may need to offer additional promotions to compete with other retailers. 

What Factors Do Customers Consider When Planning Their Purchases?

We’ve mentioned how and where customers are going to cut back on their purchases, but let’s shift the focus for a moment. When customers are purchasing gifts this year, what are their expectations? And, how can your business get your customers to complete their purchases? Here’s a breakdown of the contributing factors customers said determine whether or not they purchase from a business: 

  • Cost of delivery – 30.3%
  • Speed of delivery – 20.8% 
  • Convenient delivery – 18.7%
  • Convenient returns – 18.3%
  • Visibility  – 14.5% 
  • Carbon footprint – 10.4% 

Your customers are paying attention to their available shipping options and the features of each shipping option as well as your returns process. Now is the time to review all of the carrier services on your website. Check to see which shipping options have available tracking. Review the delivery window for each service to see how it coincides with the holiday season. Walkthrough your site from your customer’s viewpoint to see if you would be satisfied with all of the services provided. If you feel like your website needs a refresh, we’re going to help you with guidance on how to better implement customer expectations this holiday season. 

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How to Save on Shipping Costs

When 30.3% of customers say the cost of shipping is one of the biggest contributing factors to whether or not they purchase from your store, your current shipping costs are worth looking into. Rising prices are affecting you as well as your customers. But, with the rates you get from USPS and UPS as a Stamps.com user, you can avoid raising shipping costs for your customers. 

USPS 

As of October 19, 2022, Stamps.com offers users lower USPS rates than ever before. You can expect up to 84% off retail rates and 15% off Commerical Plus Pricing (CPP) on Priority Mail, so the savings will add up with higher holiday shipping volumes. These rates will help you offer your customers reliable services like Priority Mail where they can track their packages and get their gifts usually within a 1-3 delivery window without having to raise your prices. Also, Priority Mail shipments can be shipped until Monday, December 19 and still arrive in time for Christmas, so your last-minute shoppers can utilize this service as well. 

UPS® 

Stamps.com users can also expect up to 88% off UPS International Services, 72% off Next Day Air and 2nd Day Air, and 77% off UPS Ground. This way, you can offer affordable shipping costs to all of your customers, including those who are looking for international shipping options.

Rate Advisor 

Our Rate Advisor will show you the cheapest shipping option available for your shipment as well as our recommendations and the fastest shipping options. Not only can you compare your shipping options, but once an option is selected, it will automatically show on your order where it’s ready to print. This way, you can choose the best shipping option for each shipment, depending on your customer’s needs. With the help of Rate Advisor, you can keep your shipping rates the same because you don’t have to select the same service for every shipment, and your customers will thank you. 

This is how Rate Advisor will appear on Stamps.com Online.

How to Offer Free Shipping 

As we’ve mentioned, customers take shipping costs highly into consideration when making purchases. Another way to gain an advantage over your competitors and align with customer expectations is to offer free shipping. During the holiday season, customers expect deals and promotions. However, with the rise of big marketplaces like Amazon giving customers the option for free shipping year-round, it’s worth considering free shipping during the holidays if your business is able. If you aren’t sure where to start, we’re going to give you a few tips on how to offer free shipping for this holiday season and beyond. 

Free Shipping Over a Certain Threshold 

Customers will be more likely to complete their purchase if there’s free shipping available, even if it’s over a certain threshold. With ongoing economic hardships, your business may need to choose between not raising shipping costs for customers and offering free shipping. A good compromise is to offer free shipping over a certain threshold. For example, you could offer free shipping for customers who purchase over $50 of products or more. During the holiday season, customers will be on the lookout for stocking stuffers and last-minute gifts, so they’re more likely to add items to their cart if it means they’ll receive free shipping. Higher sales will offset the cost of offering this free shipping. 

Social Media Promotions 

Social media is one of the most powerful tools you can use to promote your business for the holiday season; it’s also a great way to build customer engagement. Encouraging your customers to share photos of your products extends the reach to your potential customers, but how should you reward your current customers? That’s where the idea of free shipping comes in. Share exclusive codes for free shipping and discounts with your social media followers to boost your sales during the holidays. If you can’t offer free shipping to all of your customers, you can still reward your existing customers. 

How Can Stamps.com Help You Win This Holiday Shipping Season?

In addition to the shipping rates Stamps.com users can access and Rate Advisor, we have two other features designed to help you this holiday season: Branded Tracking and QR Code Returns. Returns and visibility were involved with two of the factors customers mentioned as contributors to whether or not they completed their purchases Branded Tracking gives your customers tracking information in a more personalized way, and QR Code Returns allow your customers a convenient returns process. We’ll dive more into these two features below. 

Branded Tracking

Branded Tracking notifications are customizable emails your customers receive when their packages are shipped. These notifications can include your business’s social media handles and contact information as well as the tracking link for your customer’s shipment. Including your social media handles on Branded Tracking notifications helps to promote any of the exclusive deals we mentioned in the previous section. 14.5% of customers stated tracking visibility was one of their biggest considerations when it comes to completing their purchases, and Branded Tracking helps them track their shipments with ease. 

This is a desktop preview of Branded Tracking from Stamps.com Online. 

QR Code Returns

Another feature we’d like to highlight is QR Code Returns. With 18.3% of customers stating that convenient returns were a major factor when deciding whether or not to purchase from a business, returns will be important this holiday season. QR Code Returns can be generated for shipments and sent directly to your customers. Once received, your customer can bring their return to USPS or UPS with the QR code to have the code scanned. After the code has been scanned, a return label will be generated, and USPS or UPS can receive your shipment. QR Code Returns make the returns process smoother for your customers because they’re able to get help directly from a carrier and don’t have to print a label in advance. 

This is an example of the QR Code Returns as it appears on Stamps.com Online.

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Conclusion

With so many financial struggles affecting the world, holiday shopping is going to look different than in years past. Your customers aren’t able to spend the same amount of money on gifts, but your business can still give them an excellent customer experience. Providing your customers with free shipping options will make purchases more likely. Using Stamps.com features like Rate Advisor will help you to find the most cost-efficient shipping options available, so you don’t have to raise shipping costs for your customers. Don’t be afraid to let your customers guide your business’s holiday shopping decisions. It’s more likely you’ll have a merrier holiday season if you do. 

For more holiday shipping 2022 insight, download our free ebook below!

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