eCommerce Shipping Analytics: Leveraging Data to Improve Operational Efficiency

Sep 21, 2023 • read
eCommerce Shipping Analytics Leveraging Data to Improve Operational Efficiency

The days when shipping was used only to deliver goods to clients are gone. Shipping has developed into a crucial component of the consumer experience in the current eCommerce environment, impacting purchases, brand loyalty, and general customer satisfaction. To sustain profitability while offering on-time delivery, precise tracking data, and cost-effective solutions, businesses must improve their shipping processes.

That’s where eCommerce shipping analytics come into play. Advanced analytics techniques help examine huge amounts of data, including order volumes, delivery times, shipping costs, carrier performance, and customer feedback. By utilizing the power of data, businesses can learn important insights about their shipping operations, spot bottlenecks, and find possibilities for improvement. 

In this article, we’ll outline the major benefits of eCommerce shipping analytics as well as provide a list of metrics to track and guide you through shipping analytics best practices.

Benefits of eCommerce Shipping Analytics

Every eCommerce company should use shipping statistics, and yet they are frequently disregarded for various reasons, including the lack of proper shipping analytics software, inaccurate information, and other factors. However, these figures are extremely valuable for your eCommerce business. When making crucial decisions, such as selecting a courier partner or building a logistics plan, you’ll find great value in the data obtained from shipping analytics.

Benefits of eCommerce Shipping Analytics
  • Making Data-Driven Decisions

By examining essential parameters, including delivery timeframes, shipping costs, transit periods, and order fulfillment rates, shipping analytics enable companies to evaluate the effectiveness of their operations. Businesses may discover areas for improvement and optimize their shipping operations by keeping an eye on these KPIs.

Advanced shipping analytics can also leverage predictive modeling techniques to forecast shipping volumes, anticipate demand fluctuations, and optimize shipping capacity accordingly. By using predictive analytics, businesses can make effective decisions about how to allocate resources, select carriers, and develop overall shipping plans.

  • Meeting Consumer Expectations

Improper or inconvenient shipping terms is one of the primary reasons for cart abandonment. To avoid abandoned carts, businesses can learn about the preferences and problems of their customers by looking at data on customer feedback, product returns, and delivery success rates. They can then use this information to make data-driven decisions that will increase customer satisfaction and improve the overall shipping experience. Advanced shipping analytics can also use predictive modeling approaches to estimate shipping volumes, anticipate changes in demand, and appropriately optimize shipping capacity.

  • Improving Marketing and Sales Campaigns

Shipping analytics can also help companies monitor and analyze consumer shipping-related behaviour, such as shipment preferences, delivery time expectations, and shipping cost sensitivity. The results of the data therefore allow them to tailor their marketing efforts so they can meet client expectations and provide targeted discounts to boost customer satisfaction and sales.

Additionally, analysis can spot delivery bottlenecks like transit durations, carrier performance, or fulfillment inefficiencies, making it possible for businesses to optimize their supply chains, assure quicker and more dependable delivery, and raise the possibility of repeat business by solving these problems.

Finally, analytics may be utilized to divide up a consumer base into groups according to their preferences, region, or purchase patterns, so businesses can create targeted marketing campaigns and individualized offers to raise conversion rates.

  • Reducing Costs

Shipping analytics also help businesses identify areas where they can decrease expenses. Detecting ineffective delivery strategies, pricey shipment regions, or expensive carrier options are some examples of this. With this information, you can opt for more affordable choices and optimize your delivery plan.

Analytics can also reveal information on the efficiency of various carriers. You can compare carriers based on delivery times, pricing structures, and service quality; with this knowledge, you can negotiate carrier rates or choose more affordable solutions. You'll also be able to identify the most efficient routes for delivering orders to reduce fuel costs and decrease the number of shipments required.

What to Track

The set of metrics and KPIs to track may differ depending on your shipping process, goals, and requirements. Here are some ideas on exactly what to track.

 your shipping process, goals, and requirements
  1. Average Pickup and Delivery Time

Check the average for your pickup and delivery operations and compare it to the total number of shipments processed. If the figures seem unsatisfactory, streamline the process by selecting a different courier partner.

  1. Order Picking Accuracy

Order cycle time is a measurement of how long it takes to complete an order, from the time it is placed to the time it is delivered to the client. In order to meet customer demand for rapid and reliable delivery, it is essential to monitor and reduce the order cycle time. Your ability to retain a competitive advantage in the eCommerce industry is increased by a shorter order cycle time, which also improves customer satisfaction and lowers the chance of lost sales.

  1. Delivery Cost Per Order

This is one of the most important order management performance indicators to monitor since it enables you to figure out how much it costs to send each shipment to a client. Calculate the KPI by dividing the entire shipping expense during a given time by the total number of successful deliveries within that period.

You should keep shipping costs per delivery as low as possible in order to achieve respectable margins and maintain profitability in your shop. If your shipping expenses are minimal, you may pass these advantages along to your clients and thrill them with decreased rates, or you can provide free delivery.

  1. Inventory Accuracy

Inventory accuracy lets you determine if the inventory count displayed in your inventory management system accurately represents the physical goods you have in your store. 

Divide the database inventory count by the physical inventory count to determine your inventory accuracy. This KPI should constantly be monitored to prevent backorders, which occur when consumers place orders for items that appear to be in stock but actually are not. Furthermore, when considering key management for multicloud data, it's vital to securely manage encryption keys to protect sensitive information in your inventory database.

  1. Return Rate

This metric can be counted by dividing the total number of returned orders by the total number of fulfilled orders. A few concerns you may address to reduce the likelihood of returns include:

  • Incorrect order processing;
  • Poor packaging;
  • Damage or loss in transit;
  • Lengthy delivery dates;
  • Lower-quality goods than advertised online

By taking care of these problems, you can avoid the wrath of angry consumers who might leave you bad reviews, circumvent expensive return processing, and increase customer satisfaction.

Shipping Analytics Best Practices

The strategies listed below assist companies in understanding existing shipping procedures, identifying areas for development, and making data-driven decisions that will enhance productivity, lower costs, and increase customer satisfaction.

  1. Consolidate Data

To evaluate different shipping options fairly, it is essential to normalize any inconsistent shipment data. Data normalization and consolidation is the process of converting data from two systems that may be listed in somewhat different ways into a single data point that can then be properly analyzed.

  1. Utilize Data Visualization Tools

Data visualization tools transform complex data sets into easily understandable visual representations. They can facilitate comprehension of various processes. Here's what visualization can be useful for:

  • KPI monitoring
  • Shipping routes optimization
  • Tracking inventory and stock levels
  • Identifying anomalies
  • Reporting
  1. Analyze Carrier Performance

Analyzing carrier performance is crucial for shipping optimization since it reveals potential for cost savings and problem areas.

Utilize your carriers, internal systems, and other sources to get pertinent data. Reports on the performance of the carriers, tracking data, delivery history, customer reviews, and financial information are some examples of this data.

Analyze transit times, calculate shipping costs, consider variables like base rates, surcharges, accessorial fees, and volume discounts, and examine the claims ratio. Also, take into account feedback from customers.

Make prudent choices by utilizing the analysis's findings. Think about renegotiating contracts, shifting cargo to better-performing carriers, or looking for different carriers who can better serve your needs.

  1. Optimize Packaging and Weight

Businesses can reduce shipping costs by reducing the package's size and weight while still maintaining necessary product safety. Efficiently designed packaging that is simple to handle, stack, and store increases logistics efficiency in general– it speeds up loading and unloading, lowers the possibility of mishaps or injuries while handling, and makes inventory management easier. Warehouse operations can be streamlined by effective packaging as well, which makes it easier to organize, classify, and distribute goods.

Optimize Packaging and Weight
  1. Forecast Demand and Inventory

Utilize predictive models to forecast freight quantities, determine potential delays, and improve routing. To do this, first of all, collect historical data. After that, identify the factors that influence demand for your product. Choose forecasting methods, like time series analysis, regression analysis, market research, and expert opinions. After the forecasting is done, you can analyze the data and take necessary actions.

Final Word

When it comes to enhancing operational effectiveness, the value of eCommerce shipping analytics should not be understated. Businesses can learn a lot about their shipping processes, spot areas for improvement, and streamline their operations to provide outstanding customer service by utilizing the available data.

One of the main benefits of eCommerce shipping analytics is the capacity to see problems early on and take proactive measures to rectify them. Businesses can identify possible issues, such as delays, mistakes, or inventory shortages, and quickly take steps to fix them.

Additionally, eCommerce shipping analytics offer useful information about client preferences and behaviour. Businesses can see patterns in order frequency, delivery preferences, and geographic areas by examining shipping data along with other consumer data. The total consumer experience may be improved by using this data to optimize inventory management, customize marketing campaigns, and provide personalized delivery alternatives.

About the Author : Art Malkovich

Art Malkovich is a co-founding partner and CEO at Onilab. The company develops eCommerce websites and progressive web apps on a turnkey basis, offers store migration and UX/UI design services. Art has a profound expertise in web development, project management, and data analysis. He strives to keep the team one step ahead with a current focus on headless commerce.

About the Author

Art Malkovich

Art Malkovich is a co-founding partner and CEO at Onilab. The company develops eCommerce websites and progressive web apps on a turnkey basis, offers store migration and UX/UI design services. Art has a profound expertise in web development, project management, and data analysis. He strives to keep the team one step ahead with a current focus on headless commerce.

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