How to Manage Shipping Method Mapping for Optimized Cost
We're all familiar with being presented with a list of shipping methods at an online checkout. From free shipping to overnight delivery services, merchants are increasingly providing a shipping service to suit every need and price point.
But configuring shipping options is more complicated than it might sound. Every service available at the checkout must match a corresponding parcel carrier and service level to meet customer expectations and ensure timely delivery.
How? This is where shipping method mapping comes into play.
In this blog, we're going to cover the ins and outs of shipping method mapping and what e-commerce merchants need to consider to get it right - and how our e-commerce technology platform helps you to do just that.
What is shipping method mapping?
Shipping method mapping is the process of matching the shipping options available at your e-commerce checkout to official methods used by parcel carriers. Shipping mapping enables businesses to optimize their shipping strategy by choosing the most efficient shipping methods for each shipment, depending on metrics such as speed, cost, and customer experience.
How does shipping method mapping work?
Most e-commerce shipping software is loaded with standard shipping options that are most frequently used to ship online orders to customers. These often take the form of shipping codes, which automatically apply when a customer selects a particular shipping service at the checkout. For this to happen seamlessly, merchants need to make sure that the shipping option displayed at the checkout is 'mapped' with a corresponding shipping service in the backend.
While this process differs between software providers, shipping method mapping requires merchants to decide on certain criteria that dictates what orders are eligible for which shipping carrier or service level. This may include order value, destination, package dimensions, or delivery speed.
Why it is important for online stores to map out their shipping methods?
Standardizing shipping options at the checkout
Accurate shipping method mapping makes it possible to offer multiple shipping options at your checkout with confidence. Otherwise, merchants may have to troubleshoot reactively when a customer's requested shipping service is not available, or has grown too expensive for the amount paid at the checkout to cover. Providing your customers with multiple shipping options increases choice and flexibility, ensuring higher levels of customer satisfaction.
Cost optimization
Shipping is one of the biggest overheads for e-commerce businesses, so it's important that you aren't leaving valuable dollars on the table. Brands need to find the optimal balance between cost and speed to get orders to their customer within the fastest timeframe that doesn't cut into profit margins. Shipping method mapping enables merchants to select the most cost-effective shipping methods, making it possible to minimize shipping expenses on every order.
Shortening delivery timeframes
The speed of delivery isn't just about expedited e-commerce shipping options. In addition to the service level selected, there are other factors that can influence delivery timeframes. For example, using local or regional carriers for short-haul deliveries can result in much faster delivery timeframes than nationwide carriers. By mapping these local deliveries to the right shipping method, the service level selected has a much better chance of meeting and even surpassing customer expectations.
Leveraging different shipping capabilities
Depending on the sales channels your business operates, you may have additional shipping options at your disposal beyond those offered by major carriers like UPS and FedEx. If you are selling products via Amazon, for instance, you may be able to leverage shipping methods like Prime shipping or 2-5 day expedited shipping, which can be more cost-effective at certain times of year. Accurate shipping mapping makes it possible to configure these options for more efficient multi-carrier shipping selection.
How to implement shipping method mapping correctly
Decide between mapping specific shipping methods or rate shop groups
While choosing specific shipping methods when mapping does help to standardize shipping costs, there are some drawbacks to this less flexible approach.
By designating a specific shipping method to certain criteria present in a customer order, you are agreeing to use that shipping method in all cases - even when other options may be available at a lower cost or better performance. Because each shipping service has its own pros and cons, designating a specific shipping method means less efficiency or cost optimization in the name of simplifying your strateg
It's common for less powerful shipping software to only allow shippers to select from a non-dynamic list of shipping services when mapping, which can mean missing out significant cost savings. Customers using Ryder’s e-commerce technology system have the ability to choose from Rate Shop Groups as well as standalone services, which bundle together shipping methods across multiple carriers for dynamic selection based on certain criteria.
For example, "Cheapest 2 Days or Better" enables merchants to map shipping methods based on the cheapest method that delivers in 2 days or less at the time the order is being shipped. This means better cost optimization, with much less effort.
Implement rules for selecting the right shipping method
Once you've chosen your mix of shipping methods, you need to set criteria for assigning these shipping options to different types of orders. For example, orders containing oversize items such as furniture or exercise equipment will need to be shipped using a specialist freight service. You may also want designate orders over a certain value as being automatically routed to expedited shipping options like overnight delivery, as a way to reward your highest-value customers and encourage repeat purchases.
Inside Ryder, you don't need to waste valuable time and resources configuring this manually. The Order Rules functionality makes it possible to trigger specific shipping instructions when certain criteria are present within a customer order.
When triggered, Order Rules will override the regular fulfillment and shipping workflow. In the context of shipping, You can set local couriers for certain delivery destinations, or upgrade to faster shipping for orders containing an item currently on promotion. In sum, Order Rules enable you to add an extra layer of flexibility and responsiveness to your shipping method mapping.
Don't forget to map your free shipping method
Free shipping has become an expectation for online shoppers, so offering a free shipping option at the checkout is a great way to boost conversions. However, it's important to make sure this is mapped correctly to avoid an incorrect ship method being applied.
While this offer is displayed to the customer at the checkout as 'free shipping', this obviously isn't a real shipping service in and of itself. On the back end of your system, you will need to select which parcel carrier and service level is allocated to orders where free shipping is selected by the customer.
For example, you may decide to offer free shipping to customers whose order value reaches a specified threshold. Given that your business is footing the bill for the cost of shipping, it’s reasonable to designate a slow economy speed as the default method for orders involving free shipping. Whatever speed you select, it’s important to communicate this to your customer to set the right delivery expectations.
In the Ryder e-commerce interface, it's easy to keep free shipping affordable by selecting the dynamic Cheapest Rate option, which will automatically assign the cheapest method in real-time to optimize cost.
Blacklist any shipping methods you don't want to use
There may be certain shipping methods that you don't want to assign to orders, either as a cost-saving measure or to reserve for specific types of orders can need to vetted manually. It's important to create a list of these options at the time of mapping to avoid these shipping services from being assigned by mistake, especially if you are using dynamic shipping selection.
The technology allows you to easily blacklist specific shipping services inside the "Preferences" >"Shipping Methods" > "Blacklisted Methods" dropdown menu. Note that these methods are still available to be used for shipments, but need to be selected manually.
As consumers come to expect ever faster and more tailored shipping options, it's never been more important for e-commerce retailers to properly configure their shipping options to maximize cost efficiency. Accurate shipping method mapping not only benefits your bottom line by reducing overall shipping costs, but also contributes to a positive customer experience by improving delivery performance. With the support of a best-in-class technology solution from Ryder, it's never been easier to map the shipping methods you need to foster customer loyalty and retention.
