Battle for survival: Turning peak season learnings into 2025 strategies
January is the time of year where we embark on new beginnings. For retail, it's a time of reflection, particularly this January as it marked the close of a bumper 2024 peak season for the majority of e-commerce retailers.
2025 is likely to bring us more of the same as what we saw in 2024. Global competition, economic pressures, and evolving consumer behaviours are continuing to reshape the e-commerce landscape. Delivery, once considered a back-end operation, has become a strategic differentiator that has unprecedented influence on customer acquisition, customer retention, and profitability.
It's not an exaggeration to say that many retailers face a battle to survive in 2025. Survival rates continued to plummet into 2024, with ABS data revealing a 0.2% decrease in retail business. The battle for survival in 2025 relies on a strong understanding of what has worked in the past, paired with a forward-looking approach to delivering exceptional customer experiences. Retailers who can unlock data and turn it into actionable insights will be best-placed to maximise acquisition, retention, and profitability while minimising operational challenges.
Enhance customer experience
Shippit and Jarden research reveals that only price is more influential - and only marginally - than delivery when it comes to the factors that influence the brands we shop with. Half of consumers would not return to a brand if they'd had a bad delivery experience, while one in three say their expectations have increased as a direct result of global competitors like Amazon and Temu, who continue to carve out greater market share.
It's imperative, therefore, for retailers to understand how their delivery and fulfilment operation is functioning, and how it impacts loyalty, repeat purchasing and revenue. Consumers today demand quick, convenient and transparent delivery. Through data, retailers should analyse whether they met their delivery promises during peak season. If deliveries took longer than advertised, retailers should investigate why, and once they understand the cause of the delay, determine whether they need to implement changes. One potential solution could be introducing a multi-carrier strategy, which can reduce the risk of not meeting the delivery promises made to their customers.
And similarly, if deliveries were faster than advertised estimates, while the deliveries may have arrived on time, in order to increase cart conversions and ensure repeat business, it's important to use accurate, real-time delivery estimates. According to Shippit data, the average retailer is advertising a delivery time in excess of five days, significantly longer than the 2.2-day reality. If retailers under-promise so they can over-deliver, shoppers might look elsewhere for quicker delivery.
As well as delivery times, retailers should also ask themselves how they can find revenue opportunities, perhaps from inventory placement or location-based deliveries. How they can proactively identify future issues to reduce 'Where is my order?' enquiries? How can they fix bottlenecks, not just in transit times, but order processing, fulfilment and their entire delivery journey? The answer to these questions can help retailers win brand loyalty and increase lifetime customer value. Retailers shouldn't just be considering top line growth today, but bottom line profitability too.
Reduce operational costs
For many retailers, delivery is still seen as a cost centre, rather than an investment. The journey from shopping cart to doorstep is a notoriously complex journey; one that can be expensive for retailers whose delivery experience isn't optimised.
In the weeks and months ahead, retailers should be analysing their order processing, shipping costs, fulfilment times, carrier performance and more. For example, how can they make better decisions on how to best leverage their carriers based on cost and performance? Can they cut shipping costs by fulfilling orders closer to high-demand shipping lanes and locations? Can they prevent surcharges and reduce international shipping costs proactively?
Through a platform like Shippit Insights, retailers can enjoy complete visibility and control, enabling them to make real-time, data-driven decisions that not only improve the bottom line unit economics of their delivery, but also improve their customer's experience too. As e-commerce penetration continues to surge, so too does the importance of an optimised delivery experience. With the right platform, retailers can increase both conversions and revenue, and reduce operational costs.
Today, too many retailers are either not using data effectively or are relying on fragmented data sources. Supply chains are complex, touching multiple departments within a business, including logistics and operations, e-commerce, and finance. These departments shouldn't be operating in silos, but as one team turning real-time, business-wide data access into meaningful insights that allow them to optimise costs, efficiency and customer experience. In 2025, the key to success amidst rising competition and economic pressures is using data and insights to understand and optimise their delivery experience- the retailers who understand that will be at an advantage as the battle for survival intensifies.
