July May? You read that right! Now is the time to start your 2022 holiday prep.
During the 2021 holiday season, The Washington Post wrote, “Delayed Christmas gifts are just the beginning. The supply chain crisis isn’t going away soon.”
Fast forward to 2022 and not much has changed. Holiday planning is starting earlier than ever again this year for eCommerce merchants, and ensuring packages will be delivered on time is an important piece of the planning puzzle.
Here’s how you can track and improve your On-Time Shipping and On-Time Delivery rates to be prepared for the 2022 holiday season. (For those who already know what these KPIs are, feel free to jump to the good stuff!).
What is On-Time Shipping?
On-Time Shipping (OTS) is when an order ships on or before the promised ship date. You can calculate your OTS rate with a simple formula:
On-Time Shipping = Total number of orders shipped / # of orders that shipped on the promised delivery date
When it comes to shipping, ‘on-time’ and ‘fast’ are not mutually exclusive. For context, more than 90% of consumers see 2- to 3- day shipping as ‘fast shipping.’ But if you promise to ship an order within six business days and a customer is notified that their order shipped within that six-day window, then it’s considered to have shipped on time.
Customers value honesty and transparency, especially during the holiday shopping season. Clear communication at every step of the shipping process is key to creating a positive customer experience. Be sure to display the estimated ship date on your product listing and at check-out. Additionally, send an automated email letting them know their order shipped and a follow-up email if the shipment is delayed for any reason (and why).
What is On-Time Delivery?
Similar to On-Time Shipping, On-Time Delivery (OTD) is when an order is delivered on or before the promised delivery date. After you know what on-time means at your organization specifically, here’s an equation to help you track on-time delivery:
On-Time Delivery (OTD) = Total number of orders delivered / # of deliveries that arrived after the promised delivery date
Define a reasonable date range for deliveries to be considered to be ‘on-time’ (many choose a window of five days from when the order ships). For example, if an item is due by December 23, then it’s considered on time if it’s delivered between December 18 and December 23. If it arrives after December 23, it’s considered a late shipment.
After you calculate your on-time delivery metrics, you can focus on improving them. Start by addressing the issues that are causing the late deliveries. Here are some common causes: inventory management issues, order fulfillment issues, and delivery problems.
The negative impacts of late shipments and deliveries
Orders that ship late or are delivered outside the promised delivery date can cost you—in bad customer reviews, loss of business, and increasing expenses:
• 45% of customers are unlikely to purchase from a business again if a package is delivered late
• 1 in 3 customers will leave a bad review or post on social media after a poor delivery experience
• When delivery times are too long, almost half of omnichannel shoppers will go elsewhere
On-time shipments play a crucial role in the success of your business. Ship and deliver on the promised dates to keep your customers happy and coming back to shop for more.
Ecommerce logistics get especially complicated during the holidays, from increased order volumes to unexpected weather conditions and a volatile supply chain. Holiday planning is starting earlier than ever, and ensuring packages will be delivered on time is an important piece of the planning puzzle.
Get a head start on improving your on-time shipping and delivery rates now to have one less stress to think about during the busiest shopping event of the year:
Set clear goals
Start by setting on-time shipping and delivery goals with key stakeholders. Communicate these goals with your entire logistics team, including any warehouse and fulfillment center managers. If you’re working with a third-party logistics (3PL) provider, share your goals with them as well to ensure they’ll be able to meet your expectations. And if they can’t, it may be time to switch providers.
Use software to streamline inventory management
Proper inventory management will help you meet your on-time shipping and delivery goals. Streamline your warehouse operations with automation and advanced picking processes to ensure you meet promised shipping and delivery dates.
Below is an example of how the Deliverr Merchant Dashboard can help retailers keep tabs on orders that were on time vs. those that were not:
If you’re turning to a 3PL partner rather than managing your own warehouse, these are the types of topics you should be raising questions about to figure out if your deliveries will truly be on time.
Localize your inventory
You can’t control the speed at which carriers pick up and delivery your orders , especially during the hectic holiday season. However, there is an effective way to manage deliveries: strategically position your inventory for fast delivery. Localized inventory means that products don’t have to travel far to make it to your customer’s doorstep, and it results in more on-time deliveries.
By strategically locating your inventory, you’re making the delivery process smoother and quicker with fewer roadblocks along the way. With 50+ warehouses across the entire U.S., Deliverr helps unlock nine more days of sales for eCommerce merchants during the holiday season. Turn a delivery problem into an opportunity by allowing shoppers to purchase gifts as close to the holidays as possible. You’ll be offering fast deliveries, while other businesses struggle to manage their on-time deliveries.
Are you ready to improve your OTS and OTD rates ahead of the 2022 holiday season?
At Deliverr, our mission is to provide logistics superpowers for all. Don’t wait until the last minute to improve your shipping and delivery rates. Talk to a logistics expert today to get a head start on the 2022 holiday season and understand your realistic OTS and OTD rates before the craziness hits.
Want more pre-holiday tips and inspiration for your strategy? Check out our recommendations from years past: