Three years ago, Laura Behrens Wu and her Shippo co-founder, Simon Kreuz, were building an e-commerce store on Shopify. To handle online payments, the company used Stripe. For the most part, the experience was user-friendly. However, when many orders started coming in, shipping seemed to be the hang-up. That’s when the team realized that there wasn’t any technology set up to help them better figure out the shipping process.
“We had to do everything manually—walk into a FedEx store or post office every day. Alternatively, we could have used technology provided by the shipping providers, but upon trying, we were completely lost. It was a different user experience from what we’d experienced using Stripe. That’s when we realized that access to shipping technology is really hard,” said Behrens Wu.
Primarily, shipping providers focus on the best shipping option, not on building the best shipping software.
So from this challenge was born Shippo, which provides an end-to-end solution for marketplaces, platforms, warehouses and e-commerce stores to manage their shipping. It allows retailers to focus on commerce and customers, while Shippo handles the back end.
Both consumers and retailers know that shipping can be incredibly costly and complicated. In the end, the consumer usually ends up paying the cost, whether it’s baked into the product price or broken out.
And while consumers want cheap or free shipping, retailers have to worry about transit times and deliverability. To combat high costs, Shippo encourages retailers to not only offer free shipping for promotional purposes but to be smart about it. For instance, offer free shipping over a certain order value or in a specific category. Another strategy is to offer free shipping with a specific call to action for the customer.
Behrens Wu says that one of the biggest challenges for shippers is Amazon’s control of the retail market—it accounts for half of every U.S. dollar spent online. Many people want to order from Amazon because they feel like shipping is free when actually, it’s paid for through Prime membership. Still, Amazon is able to create a perception and a challenge to other retailers and consumers.
In order to compete with Amazon, one tip that Behrens Wu offers is for retailers to make their shipping a brand touchstone for engaging with customers. The experience should be delightful and different from what other retailers are offering.
“Win through differentiation,” she said.
Behrens Wu says there is still plenty of room to improve the shipping experience for all involved parties.
“Retailers will have so much more insight into getting recommendations for things like fastest delivery, cost savings or optimal box sizes for their parcels. On the consumer side, user experience will transition from being fragmented to one that is more delightful and seamless. From warehouses and delivery trucks today to hyperlocal services and drones tomorrow, our goal is to always connect our customers to the best delivery option available,” Behrens Wu said.