Procrastinating on your holiday gift shopping just got more costly.
As The Wall Street Journal reported Monday, UPS will now charge retailers a $0.27 surcharge fee (for standard ground shipping) on packages shipped between Nov. 19 and Dec. 2 and again from Dec. 17 to Dec. 23. The fee increases up to $0.97 for expedited deliveries.
It will be up to the retailer to determine how that extra cost will be implemented—whether the brand will eat the fee, raise shipping costs, or potentially split it between the two. And while $0.27 may not seem like much of a difference, and on average shouldn’t make or break any one retailer, the cost will be noticeable. Internet Retailer reported ecommerce sales eclipsed $91B in November and December of 2016, and that number should increase again this year. That’s a lot of packages being shipped across the country in just two months.
We’ll have to wait until the holiday season is over to see the true ramifications the surcharge has on holiday ecommerce sales. Instead of taking a risk this holiday season, we’ve provided three ways to focus your holiday strategies without being affected by the changes in shipping costs.
Extend Your Black Friday Sales
Even before UPS’ decision, we urge our clients to be prepared for the holiday rush long before the fall months come around. More and more brands are starting their promotions well before Black Friday; so if you’re worried about the extra shipping costs, stretch your Black Friday deals and promotions the week before (or after) the surcharge.
Drive Customers In-Store
The shipping surcharge fee will especially impact online-only brands that have no other way of getting their products to consumers. For those with physical locations, use this to your advantage. The fee does not (to our knowledge) affect deliveries sent to stores, so in-store pickup is a smart strategy. Not only is it more cost-effective, in-store traffic is still important to many brands because of the add-ons and impulse purchase. eMarketer reported that 63 percent of customers 18-65 make additional purchases while in a physical location during their “buy online, pick up in-store” experience.
Get Value From Your Investment
Some brands may feel it best to continue offering free or regular-priced shipping and absorb the extra costs. If that’s the case, don’t be afraid to ask for something in return, such as having customers subscribe to your emails in order to qualify for free shipping. The extra fees that brands accrue will be worth it if they are able to obtain data that can help them nurture loyal customers.
The New Norm?
It would not surprise us if holiday shipping surcharges not only come back year after year, but if that $0.27 price also grows in the coming years. If the projections are correct, and retail ecommerce sales increase by double digits every year until 2020, there’s no reason—that we’ve seen yet—to expect postal companies will drop these fees. If you haven’t incorporated any of these strategies into your holiday marketing plans yet, now is the time.
This story is only just developing, and we’ll watch it closely to see if FedEx joins its competitor and see how brands adjust to the change. We will continue to discuss how brands should approach this surcharge fee—while touching on everything holiday marketing—on the DEG blog and on our social channels in the coming months.