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New Report From ShipStation Reveals 72% of Surveyed Merchants Plan to Cut Shipping Costs To Grow This Year

Research finds inflation could cost U.S. consumers $219B, highlights tactics for merchants to grow despite economic challenges

ShipStation, the world’s leading cloud-based ecommerce shipping solution, today released Protect Your Growth Strategy: the 2023 Consumer and Merchant Benchmark Report. The report contains findings from a global consumer and merchant study conducted by Auctane, which operates the ShipStation brand among others, and Retail Economics, an independent economics research consultancy.*

“This year, consumers have become more price conscious, and therefore selective with their shopping decisions,” said Sudha Chandrasekharan, Senior Vice President and Global General Manager of ShipStation. “The report highlights an urgent need for merchants to provide a phenomenal buying experience, from start to finish, to stand out to the modern consumer.”

In the report, ShipStation encourages merchants to optimize the pre and post-purchase experience to continue growing amid unstable market conditions. Key findings include:

Cost drives decision making in 2023:

Both merchants and consumers continue to feel financially uncertain this year. The research found that inflation could account for $219B in increased sales this year as a result of rising prices, rather than increased sales volume. 64% of surveyed U.S. consumers rank inflation as their biggest financial concern this year, and 66% plan to change their buying behaviors in 2023, likely as a result of economic uncertainty. 23% of consumers say they expect to shop online more than they currently do to save and compare costs across multiple brands. Meanwhile, 72% of surveyed U.S. merchants are looking to cut shipping costs in order to grow this year.

Free over fast deliveries:

Consumers are now willing to swap faster deliveries for cost savings. 41% of surveyed consumers say cost of delivery is the most important factor when buying online, up from 33% in 2022. A whopping 61% of consumers say that they’re less likely to shop with a brand if shipping costs are high. On average, 34% of U.S. consumers expect packages to arrive in 3-4 days. Only 6% expect overnight delivery as the standard.

Customer experience doesn’t stop at checkout:

Consumers had strong opinions about what they want out of their online shopping experiences and how merchants can deliver. Returns and merchant communications topped consumers’ priority lists. 44% of surveyed consumers say they’re less likely to shop with a brand if the returns process is difficult, and 81% believe returns should be free. Gen-Z is the most likely to be open to paying for returns. Meanwhile, 66% of surveyed merchants do not currently offer free returns. In 2022, ShipStation found that 18% of merchants planned to restrict return policies or eliminate free returns in order to cut costs amid economic headwinds. When it comes to communications, ShipStation found that 42% of consumers want tracking updates daily, whether or not the status of the order has changed.

Optimize operations:

ShipStation’s research reviews merchants’ operating strategies and recommends new areas of focus to promote business growth. When it comes to geographical reach, 65% of surveyed merchants did not expand internationally last year, nor do they have plans to expand this year. 57% of merchants report that they only operate out of a single warehouse, and 30% of merchants plan to introduce warehouse automation this year.

To learn more about how merchants can grow despite economic uncertainties, and other topics within the report, including insurance, sustainability, and small businesses, visit ShipStation’s full report here today.

For even more insight on the research, visit ShipStation at Shoptalk next week at booth #1361.

*Methodology: This dual-sided research was conducted by Retail Economics and Auctane. The report contains economic modeling and data-driven insights developed from a nationally representative consumer panel survey, conducted in November 2022, comprising over 8,000 households across the US, UK, Canada, Australia, Germany, France, Italy, and Spain. The report contains supplemental research from a survey conducted by 1,000 consumers in the U.S. on February 2, 2023. The report also contains input from a survey conducted by over 300 merchants in the U.S. on January 27, 2023.

About ShipStation

Every day, tens of thousands of ecommerce retailers rely on ShipStation to solve the day-to-day challenges of importing orders and processing shipments. The trusted leader in shipping software since its founding in 2011, ShipStation helps online sellers scale their businesses and deliver exceptional customer experiences, with an intuitive online solution that allows them to efficiently ship orders -- wherever they sell and however they ship. The multi-channel and multi-carrier platform offers a multitude of integrations, with more than 300 partnerships with leading shopping carts, marketplaces, carriers, and fulfillment services, including USPS, UPS, FedEx, Amazon, Shopify, and BigCommerce. ShipStation is a member of the Auctane family of companies and is headquartered in Austin, TX. Auctane brands include ShipStation, Stamps.com, Packlink, ShippingEasy, ShipWorks, ShipEngine, Endicia, Shipsi, GlobalPost, and Metapack, with offices in Austin, El Segundo, London, Madrid, and Zielona Gora. For more information, visit https://www.shipstation.com.

About Retail Economics

Retail Economics is an independent economics research consultancy focused on the consumer and retail industry. Retail Economics provides independent thought leadership on major economic and retail trends and analyzes their impact on the industry. Retail Economics provides proprietary data on sector growth, behavioral trends, channel performance and forecasts.

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