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Step by Step S6 E4
June 3, 2021

[Step by Step] How Can I Utilize Shipping to Curate a Great Customer Experience?

In this season of Step by Step presented by Shippo, we ask the question, “How can I leverage shipping as a growth engine for my business?” In this episode, we’re giving you a broad, 10,000-foot view of the shipping process. Matt Crawford, General Manager of Shipping at BigCommerce shares the different ways eCommerce merchants can use shipping to provide customers with a great experience and how BigCommerce and Shippo are enabling smaller merchants to do just that.

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this episode sponsored by

The Post-Purchase Experience

  • Consumer expectations are almost unfair for smaller businesses. But that doesn’t mean brands can’t continue to provide a great post-purchase experience. 
  • Many brands have turned to 3PLs to help meet the demand of fast shipping and to keep shipping costs lower. 
  • “Brands have to be more transparent with customers. They need to give customers a choice around what services they offer and the price. A lot of brands are starting to use 3PLs to meet the customer demand, which means they're storing inventory somewhere else throughout the country to get shorter deliveries. Brands need to communicate with shoppers after the purchase in a way that conveys the brand message differently than just an email saying your order has been shipped.” - Matt Crawford
  • It’s more than just shipping, it’s about creating a memorable post-purchase experience. It’s about connecting the “front office” with the “back of house.” 
  • “I think of the post purchase because I try to make it a marketer's problem, not a person in the warehouse problem.” - Matt
  • “When you improve shipping and you offer different options around shipping, it's almost like having additional products on your site.” - Brian

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Phillip: [00:00:04] Hello and welcome to Step by Step, a podcast by Future Commerce, presented by Shippo. I'm Phillip.

Brian: [00:02:04] And I'm Brian. This is Season 6 of Step by Step. You are listening to Episode 4 of 5. So if you're just jumping into this series midway through, I highly suggest you go back and listen from the very beginning, so you don't miss out on what we've learned so far.

Phillip: [00:02:20] Yeah, you don't want to miss anything. And hey this season, we are answering the question, how do you transform shipping from a cost center into a growth center? And I mean, I think that that challenge must be even harder when you run one of the largest eCommerce platforms in the entire world. You have to solve that problem for millions of people.

Brian: [00:02:47] Yes. So I think the beauty of bringing in someone like Matt Crawford from BigCommerce to talk to us about this, we're actually getting a very broad view. A very, like very ten thousand foot view of shipping, like all the different ways that eCommerce merchants have to use shipping to grow their business. That's what Matt thinks about all day long. So, yeah, I'm super excited about this. I love this. I feel like we're cheating right now. I mean, we have recorded this episode already.

Phillip: [00:03:24] Yeah.

Brian: [00:03:24] Just so you know.

Phillip: [00:03:26] Yeah.

Brian: [00:03:26] So I'm getting pumped.

Phillip: [00:03:29] Yeah, I am too. I will tell you one thing about Matt Crawford was he told us right at the very beginning that I think he was on his work laptop. And, you know, BigCommerce is big for their britches now, baby. I don't know if you know, they're a big public company and they're not a small company upstart platform anymore. Some of the biggest brands in the world are running on BigCommerce. And I think he had some security software on his computer that also was like having some fun with his recording. And so we finally got this podcast recorded and it was so worth it. And I can't wait for you to hear it, but this podcast is for you. And if you're listening to this right now and you operate a brand, if you are an operator at a direct to consumer business and you're doing DTC or you're doing B2C or B2B or B2B2C or OMG, whatever it is that you do in eCommerce, this is going to be valuable for you because the likelihood is very high, there's a very high likelihood that you are running on an eCommerce platform. And when you think about the challenges that eCommerce platforms have to solve for all of their customers and how those decisions trickle down to your customers customer. Oh, wow. This is crazy stuff.

Brian: [00:04:53] Ok, OK, so let's get into the episode because I'm excited for them to hear about this. So let's join Matt Crawford, General Manager of Shipping at BigCommerce, as he teaches us how you can turn your shipping from a cost center into a growth center Step by step.

Phillip: [00:05:16] Today, we have Matt Crawford, the General Manager of shipping at BigCommerce, here to join us for this fourth episode of our sixth season of Step by Step. Welcome to the show, Matt.

Matt: [00:05:28] Thanks for having me.

Phillip: [00:05:29] Yeah, thanks. Thanks for being here. We are uncovering this big meaty idea that shipping can be a growth engine for your business. And I think that that's, we've had a few folks here that I feel like have given pretty compelling arguments. BigCommerce is truthfully one of the largest eCommerce platforms right now in the world. What's your role over there and how can you guys fit into the story of using shipping as a growth engine?

Matt: [00:06:03] So for those that don't know BigCommerce, we like to think of ourselves as the mid-market's leading SaaS eCommerce platform. What that means is for those that don't know SaaS, don't know mid-market, essentially we've got a platform that can help merchants at any stage of growth sell their stuff online, both on their own website or via omnichannel, like an Amazon or Walmart, connect to their retail storefronts, sell in-person or online, and we make it super easy. Even someone like me, if you guys can believe this. I never knew how to run a site. I was able to stand up a site in just a couple hours, and I run my own bike business on BigCommerce. At work, I look after all of our shipping related partnerships, so making sure that merchants have choice in terms of who they work with and everything that touches shipping from the rates you display in check out, to the label printing software, to the cross border partners, the 3PLs and fulfillment houses, the post purchase, returns, and everything that touches that. I've been a supply chain guy my whole life, and when I came to BigCommerce what I really, really like is the solutions that were only available for the merchants in my past life, now they come in at twenty nine dollars a month package that gives these smaller businesses that don't necessarily have the expertise or skillset or resources to have a really efficient supply chain, to work with tools to make it super easy to not only fulfill orders, but use shipping as a way to drive repeat purchases for your customers.

Brian: [00:07:28] That's important. That's important stuff.

Phillip: [00:07:31] It is important. And what's interesting there is you remember the old Hair Club for Men ads where it was like, "And I'm a client." Matt, your story is you're actually sort of dog fooding and having come from the eco-system, operating your own business, and so you have a different perspective not just around, "Oh, well, I run VisDev at some platform." Your perspective is also as a client and you have a client mind around how these things actually impact merchants. How are merchants impacted and maybe specifically in the last year, around COVID and all this digital shift? What is the impact of shipping on merchants and how did those line up with the expectations customers have around shipping?

Matt: [00:08:20] Maybe I would start with customer expectations changing. Maybe it's a good way. So our expectations of what's acceptable has changed. I think back to the start of COVID, when you ordered something online, you just didn't know when it was going to get there. And it's the feeling of like uncomfortableness, like, where's my box? Why isn't it here? And I think that was a really unique feeling because five or 10 years ago, you didn't know when something was going to get delivered. And we've all been trained. Buy something today. It's tracked every step of the way. You're going to get it in a day or two. And when I buy something from a non Amazon storefront, you go to a checkout and you say "standard shipping," and I'm like, am I going to get it today or tomorrow or next month? And it starts to make me question, do I want to buy from this brand? So I think shopper expectations have gotten more and more demanding over time, which isn't almost fair for a lot of small businesses. But shopper demands have gotten faster, the willingness to pay has gotten lower. The options that a shopper has around pick up in-store or BOPIS, or you believe to accept a fully landed cost and check out the show taxes and duties if you're outside the US, all those are way more prevalent today than probably they were a couple of years ago. And so if I think about it from that standpoint, what is the merchant do? If you're running a business in Texas, you can't send the box anywhere in the US two day for five dollars. It's harder. So [00:09:48] brands have to be more transparent with customers. They need to give customers choice around what services they offer and the price. Need to find a way to do free shipping. A lot of brands are starting to use 3PLs, or third party logistics providers, to meet the customer demand, which means they're storing inventory not only in the warehouse in Texas, but somewhere else throughout the country to get shorter deliveries. Brands have to make returns easier for shoppers and they need to communicate with shoppers after the purchase in a way that conveys the brand message differently than just an email saying your order has been shipped. And that's it. And I think the brands that are winning are finding ways to stay connected to the customers when they buy on the website, or maybe shortly before they click buy, and all the way through that post purchase journey. [00:10:37]

Brian: [00:10:39] That's huge, and it takes so many components to provide an experience like that, as you know, as we're meeting those expectations. I think you're in a really unique position being at BigCommerce. I think your ethos, you know, from what I understand and correct me if I'm wrong here, but is that you see BigCommerce as sort of a connector of different tools that give merchants different options for how they want to approach building out an experience like that. And one component of that is our partner in this show, Shippo, who provides a really key component of that with getting getting the shipping rates and labels and all that, return. But I'd love for you to sort of explain, and I think you're in a really good position to do this, that all the different components of that shipping process and sort of the different pieces of technology that are required through that stack and how Shippo fits into that. And I think that would be really helpful, this is Step by Step, after all. We like to get into the weeds. And so I think sort of going through all the different components required to build an experience like that would be a a great place to start as we start to think more about how we can leverage those different components to build that experience.

Matt: [00:12:05] Yes, so I'm going to start a lot of listeners are probably brands that have done this before, but most shoppers have never been to a warehouse and have never seen the process to take an item off a shelf, put it on a shipping station, pick a shipping service you want to use and then print a label. So I think of the best way to start is when a business gets started, an order comes in, they take their fame, their t shirt, whatever they're selling and put in a box. They drive it to the post office. They wait in line to post office and they say this is a five pound box going to Chicago. Post office man or woman says, "You've got three choices. Five dollars, ten dollars or twenty dollars." And the merchant buys a label, they stick it on the box, and the package goes on its way. Five years ago, that was acceptable. I remember going to a post office and seeing lines of people outside with boxes. Now, someone like Shippo, what a merchant does now is an order comes in, someone still has to take a pick list, go to the shelf, find the item, they need to bring it back to a shipping station. They need to put in a box. They need to put a little card in to say thanks for ordering. They need a packing slip. They need something to connect with the customer. They then can go into their shipping app, like Shippo, and compare carriers or compare service levels. Say the customer wants in in three days, what service can do it in that gets it in three days and argue that the lowest price or the most tracking whatever features are needed. Shippo allows a business to do that in a really simple one off way, for me as my first box I'm shipping. Or to do things to automate their work, a merchant's workflow, to say instead of printing five labels, one by one, I can print five labels at once with the click of a button. And so at the core of what Shippo does is they make it easier for merchants to fulfill packages. Pick, pack, ship. They do some other cool stuff like connect you to 3PLs, give better analytics, give you access to carriers that you might not have ever had access to, discounted shipping rates for smaller merchants as they're just getting started. And they do a little bit on the post purchase side, too, to make it easier for a small business who's trying to communicate or facilitate returns for those shoppers. And it's all built into an app that I think it's free to get started, pay five cents a label. And it's crazy. Again, five years ago or 10 years ago, it didn't exist. Now, a merchant pays five cents for all of that automation and the ability to print labels or twenty dollars a month, thirty dollars a month as you get bigger. Does that help? Did I make it simple?

Brian: [00:14:41] Yeah, definitely.

Phillip: [00:14:43] Yes. I think it could also be, we could dive down even a little deeper to say that there was... We have another guest on this series just talking about this phenomenon of almost the COVID era personal supply chain that eCommerce enabled, which is it wasn't just the fulfillment of a burgeoning emergent businesses and operators who software is enabling to do these more complicated decision matrixes around how fastest, best, cheapest. But it's also that we're kind of all retailers in our own right to some degree now, when you think about the way that the world works and the marketplaces that we buy and sell and trade off of and the emergence of re-commerce and the circular economy. There is this impact that shipping can have on every person because every person doesn't just consume now. They also fuel other consumers. And I think that that's where there's this really interesting inflection point that we're all at right now where shipping touches everything that we do. And so finding efficiency and shipping in one area can enable or unlock so much more capability for everybody, not just the customer to have a cheaper product, but for there to be efficiency everywhere, even for the customer who is looking to make some extra money by selling the items around them, so from a platform perspective at BigCommerce, and you're thinking about all the ways that you're enabling commerce, I'm curious if you could think about, like, what are the interesting ways that you're enabling commerce? Like from marketplaces and I mean direct to consumer is certainly part of it, but you also touch B2B and marketplace and a really interesting way that I think have this larger macro effect on the way that customers interact with shipping. Maybe you could touch on some of that as well.

Matt: [00:16:59] My first, I worked at PWC for a long time, and we'd work in the supply chain function, we'd find the guys and gals that were printing labels and they were completely separate from the business themselves. It was this grungy part of it's like, oh, go to the warehouse. Everyone's kind of scared. It's dark. And it was never sexy. It wasn't fun. The marketers didn't care about it. And we had a delineation, I think, between a front of house market or brand product person and all the people in the warehouse to just make the things work. I think what's happening in eCom now is that blend of someone needs to run the business that understands how to connect the shopper experience, which starts on the website, but it actually is really, really impacted by that dark grungy area that no one wants to go to in the warehouse. And I think it comes into it's a fun problem, and I think the brands that are doing it well have found a way to say, look, it's not grungy and scary different anymore. It's all connected. And I think when you talk about a big business that says, "How do I connect locally with my customers? How do I create an in-person experience," whether it's a brand with a retail storefront or just a warehouse, need to be able to show a shopper on your website which store are you in, which store do you want to shop, and what inventories there, and at what time can they pick up the product. And a shopper one expects that. I can't tell you... I don't want to... I told you before, I want to go to a sweaty bar and be around my friends and listen to music after COVID's over. But I have no desire to go back to a retail store, to browse through aisles and look at products that I can't research easily. I want to be able to have my same online experience with all the benefit that comes from that and be able to pick up a product and store, not have to wait three or four days to get it and not pay an arm and a leg for it. So I think one of the ways we try to do it is bridge the gap between the storefront and the back office experience. I think if you're selling on marketplace like Amazon or Walmart, you want to see the Prime badge, and if you're a merchant on BigCommerce and you're selling on Amazon, we need to connect you to fulfillment partners that allow you to get the Prime badge on Amazon, because we all know it doesn't have Prime, you're probably not going to buy it. So I think you've got the BOPIS piece, you have the marketplace piece. And I think generally we're seeing merchants that can create a better post purchase experience, keep customers coming back at a higher clip rather than someone who buys something and there's no connection once you click buy. So I always tell brands to go on your website and click buy and see how horrible an experience it is and say, "Does that make you want to come back?" Most brands that just deliver an Amazon like experience, but slower. It's a brown box. There's no connection, there's no follow up, and it's slow and expensive. And then I think about the brands that I buy, whether it's subscription based or comes in a nice box that comes with a colorful paper, there's a little note in there from the owner saying, "Hey, we really appreciate you." Here's something cool that somehow they're going to make me think about them besides just the thing I'm buying and using at some point.

Phillip: [00:20:08] The disposable experience, right, is the thing that you don't want anymore, and I think that's what you were saying, is a lot of in-store retail is sort of disposable experiences and low effort. And I've worked extensively with a few brands. And my questions are typically around like they're looking for the kind of advice that's like, how do we close more sales? And they think that that's all front end experience related and my initial questions, are typically, what's the median time to delivery? How long does it take from purchase to the package arriving on a doorstep? And they very rarely know. And then I ask them, well, since... I'm getting so excited, I hit my microphone. They very rarely know. And I say, oh, well, there's your problem with the retention business. That's something you should be know, that you should have visibility into. You should be trying to improve that number, drive it down over time. It's not just ops. That's not an ops function. That's a retention function.

Brian: [00:22:20] Yeah.

Phillip: [00:22:21] Right?

Brian: [00:22:22] I think what's really, really interesting about this is marketers have in the past looked at like I think what you're getting at is they've looked at shipping as just like something that's worth hiding. I just heard Malcolm Gladwell recently say something to the effect of it's actually the full network, the full chain that consumers are looking at now. That's the way that we're able to sort of go to market is when we make that chain transparent and known and we build that connection point. And what I think I hear you saying is that, you know, the whole process needs to be clear to the customer and make them feel like it's a good experience for everyone, because we're starting to think more and more as consumers about how we're impacting the world. And so having that connection to everything is important. It also makes you more competitive. I think that's another thing is all of these things in my mind, like we talked about making the shipping process sexy, making it transparent, making it a connection point, making it something that's an asset to the purchase process. That makes you more competitive. What are some other ways that you can see shipping as being a competitive advantage for a merchant? And how can they use that as a tool to say to customers, oh, actually, I'm the right place to purchase your desired item?

Matt: [00:24:02] What I try to do, Brian, is I try to separate shipping, and I think there's an element of how do you do shipping as a competitive advantage? But I like to say how do you use the post purchase experience? I think it's more than just shipping. Heck, I'm looking outside at my recycle bin. It's full, it's overflowing with Amazon boxes. Every Tuesday or Thursday, when I put out my garbage, I get sad. I'm like, why do I have such thick cardboard and throw that away? I think something... If I go back from now the product's sitting in my, the box is sitting in my garbage can or recycle bin, why aren't we using more flexible bags or poly bags or recyclable bags? Why am I getting a brown box that's generic that has the Amazon logo all over it? So I think circling the shopper, the packaging use, whether it be branded or biodegradable... I think that's super important. And again, I think I'd arguably spend more money to not have the garbage cans filled, overflowing every day. So I think the packaging, the unboxing experience, little things... You get a box, it's this big, and your item just in there. It's like lonely. Like make it something that's exciting for me to open up, make it something I want to talk about with my friends, take a picture of. I've got three kids, and they're not on Tick-Tock yet. But I think why isn't every experience I buy from an independent retailer something I want to talk about? Keep going farther back. I think you need to have, you need to be able to ship faster, not only, Phillip, like you said, it's what's your transit time? But most sites don't even ship the same day and order comes in. So I think it's the transit time, which is driven primarily by how close you are to the customer. But also, how quick after an order comes in, are you going to pick and pack and ship it? And pay for next day delivery. But it doesn't ship for three days. Why do I spent 15 dollars if it didn't ship yet? And then I think setting the right expectations on the storefront. A lot of it comes back to the storefront experience, I think, too. Because is there a clear shipping policy? When I look at a product detail page, I look at an actual product, do I know if it's in stock? Do I know when it's going to ship? And how long it's going to take? What the price is? And then in between all that is what's the communication? Am I getting text messages, and am I getting emails that are relevant to me? Or am I getting an email that's just generic, like, "Hey, here's your order. Here's your track number." That's it. So I try to separate it. We all want to talk shipping, which is important part of it, but I don't think of it as shipping. In my mind shipping, as a logistics guy, it's the act of print a label, stick it on a box and give it to FedEx. I try to bring that whole experience together because that sort of shopper doesn't care about shipping. Shopper cares about I said I want to buy it, I get it. And shipping is just a mechanism by which you get product from A to B.

Phillip: [00:26:52] Oh, yeah, oh, that's so interesting. Shoppers don't care about shipping until they do right? {laughter} Like there's a point where they don't care, and then there's a very, very like there's a threshold at which then they super duper care. One of those... And it's funny that can happen so many different places in the experience. A good example would be like there's this shoe that I almost bought today from a store called I think it's called Offspring, it's in England or in the UK. And went to go buy it, sixty dollars shipping, and I noped out of it. I was like, no way. Sixty dollars like two day DHL. That was the only option to US. Nope. Not happening. And on the other extreme, I'm still waiting on a package of something that said it was delivered two weeks ago, and I've yet to see the actual package. And so but it took me like a week and a half to actually start getting angry about it. So there's some, there's like a lot of latitude. There's like a lot of latitude between those two extremes of, yeah, customers just don't care about shipping. And it's your job, I guess maybe all of our jobs, to make that sort of painless but not so painless that it becomes painful for the business.

Matt: [00:28:25] There's a company out there called Route.

Phillip: [00:28:30] Yup.

Matt: [00:28:30] Route has built a whole business where they're giving shoppers ability to pay for extra for insurance in the checkout to get it when you say... You get the product that you paid for with your credit card, who is going to protect it? Like, think about that. And there's shoppers are very, very willing to pay a little bit extra to get a product they paid for. It's just crazy to me. As you went through that example, that that came top of mind, but it's really easy for that brand in the UK to have two or three different delivery options. I want a cheap and cheerful I want a fast and expensive and I want a medium. And it doesn't cost sixty dollars, it might with DHL, but there's ways you can get it for 15 dollars, there's consolidators you can ship through for that brand. There's ways that they can say, all right, it's not going to get there next week for 60 that get there in two days for sixty dollars. They'll get their next next week for 15. And I think brands should be thinking about how do they offer those choices. And none of this is hard in and of itself. It's just jargon and it's different. And [00:29:30] it's another area to focus on that a lot of the businesses got a really smart woman or guy who built it. They're a product person, they're a marketing person, and they hire someone to do fulfillment that's completely separate from the experience. And that's why I don't think shipping, I think of the post purchase because I try to make it a marketer's problem, not a person in the warehouse problem. [00:29:52]

Brian: [00:29:52] And in fact, I think that's a really key point here. This is why ops and marketing need to have better collaboration and communication. The reality is shipping is part of the post purchase experience and the post purchase is the lifeblood of a business for retention, like Phillip was talking about at the beginning of the episode. And so as marketers work with ops, they shouldn't just be thinking, oh, this division of our business is just getting stuff done for our customers. This division of our business is what enables me as a marketer to be able to say this is the experience you're getting. This is how you go to market with customer attention. It's with your ops team.

Matt: [00:30:45] You said it perfect Brian. I'm going to record that, and I'm going to put you in our next marketing video. That's the message. And that's the story that we're trying to tell. And at BigCommerce, we try to make it easy for merchants to look at the experience, who are the partners that support that and pick and choose the ones that fit your needs best, and how do you stitch it together? And as a platform, I don't want to tell you who's best. Some of my competitors want to tell you exactly who's best and exactly how to do it, and penalize you if you don't use their proprietary stack. My answer is I want to help you pick the best for you. If Shippo is best for your business, I don't want to penalize you for it. Go with it. I'll make it easy to work with. And so when you say what's BigCommerce's view on all this, it's how do we make it easy for brands to come to us? They need help. We can help them, but generally make it easier for them to plug in the solutions that help them run their business and help coach them through ways to use shipping to be a competitive advantage.

Brian: [00:31:35] It's awesome. So looking ahead, I would love to hear some of the tactics that you've advised merchants to employ as BigCommerce. I think you said, "We want to make it easy for merchants to be able to pick different solutions that make sense for their business." Have you been able to help advise different types of merchants or different sizes of merchants on specific strategies to implement? And maybe you can run through a few of those with us.

Matt: [00:32:09] We've got folks on our team Brian that all day everyday talk to merchants about this exact problem and those merchants sophistication ranges from "I still go to USPS to drop off my packages," to "You're telling me there's a way I can print labels for less than 60 dollars to get it from the US to Europe? And I can start selling outside the US." Like the sophistication levels are... The problems range from really, really, really basic, which I get a ton of fun helping brands like that because they just don't know where to start. But go back to my consulting days, I like the businesses that they've got an established operation. How do you make it more efficient? And I think there's fun in each of those, but typically it comes down, if I think of our approach, it's understanding what the merchant is trying to do, helping them understand the linkage where they get it, how shipping matters. A lot of times it starts with them buying from their own website and saying it's not not exactly right. But I think of a brand. I think of a skincare business out in California. When we started with them, they were using two or three different solutions to print labels. They were going to USPS solution. They were going right to FedEx and right to UPS. Their website had seven or eight different shipping options. And we went through with them and said, "What's the brand promise you're trying to give?" And it was there are a very consultative, high end skincare products, a lot of repeat purchases. And so we helped them create a two day delivery experience. They had pretty good pick and pack operations. It was more of the actual carrier piece. We helped them get discounted shipping rates with one of the carriers. They had a two day option, so it wasn't sixty dollars anymore, it was 15. And they saw a humongous increase in conversion from just saying instead of seven options, I've got two. I've got free, I've got a two day, and I've got a ground. They've since moved to a bigger, so the two day was a huge win for them because they found their customers were willing to pay. You're buying a hundred and fifty dollars skincare products and they're saying, well, I need free shipping. Customers are saying I'm already sending one hundred fifty dollars on lotion. I'm happy to spend ten or fifteen dollars more, but I want it tomorrow. As opposed to I want it whenever it comes. They've since moved into a bigger warehouse, they've moved into multiple warehouses, they've got a facility on the East Coast and the West Coast, and now they have more of a better inventory management system that was implemented too that goes along with the complexity, let's say, of now running two warehouses.

Brian: [00:34:52] Yeah.

Matt: [00:34:52] So it went from really skin care consultant to mom, to business owner to holy cow, and I've got an operation that I can't see and touch.

Phillip: [00:35:04] Wow.

Matt: [00:35:04] And for that business, shipping was a very, very defined, very specific increase in conversion, helped grow revenue, and then as they've grown, they've had to spread out, which has made it easier to give cheaper shipping and faster shipping.

Brian: [00:35:21] And it sounds like it's had a huge impact on conversion and growth. That's I think this is the whole point of this season, is that as you go and make improvements like this, this can have an exponential impact on your growth as a business. And so by cutting out costs, by getting more efficient, by going and getting discounted rates and offering more options, it's almost like adding to your product assortment practically. It's almost a different product [00:35:57]. When you improve shipping and you offer different options around shipping, it's almost like having additional products on your site. [00:36:06]

Matt: [00:36:08] And it's funny how if you can save money on shipping, how it drives profitability too. Which not only makes it a better experience, but you can actually save money and make more profit on shipping than you might actually on your core product, which is another crazy thing to think about.

Phillip: [00:36:27] Say that again for the people in the back.

Matt: [00:36:31] Yes. So I think the core problem most people are trying to solve for is how do you get to free shipping? My argument is you should be getting to free shipping and you should be using the expedited shipping as a way to monetize a little bit. So for shoppers willing to pay a little bit more, we shouldn't be subsidizing that like you would on a free shipping. And so we found that on a 15 dollar two day package a merchant might be able to make four or five dollars. You might actually be sending a two day package via a USPS ground that gets there next day, but the shopper is still willing to send fifteen dollars to get it there and they're paying for a premium experience. But if you know, I'm in LA, and I'm shipping LA, I can send it on USPS verses I'm in LA, and I'm shipping to New York and need to put it in a FedEx two day box.

Phillip: [00:37:14] Yeah.

Matt: [00:37:15] So you can actually use shipping to drive profit as well. I wouldn't encourage using shipping to drive profit on your fast or your cheap and cheerful. Like to me that that's defeating the purpose. You have to have people buy first. But if they're willing to pay, use it to your advantage, just like you can use different products to drive higher margin. I think you can use shipping too.

Brian: [00:37:34] Incredible. We're coming up on the end here, but before we head out, I would love to hear looking ahead to 2022 and hopefully we're going to be able to start to get back together again and the world will return to some sort of sense of normalcy, a new normal maybe. Tell me what you see ahead for shipping improvements and for how retailers can leverage shipping in this new environment we're going to be in.

Matt: [00:38:10] The analogy I use for this one, Brian, I think of if you remember, Shipageddon, referring to the holidays last year. Like the world's going to end. We're not going to get our packages. And we saw in a super dorky supply chain where you saw supply and demand balance out. We saw the carriers move shipping dates out for cutoff dates earlier, increased prices, brands started sales earlier. And no one went without presents on Christmas. And so I don't know if I see a fundamental shift going into 2022. You know, what I see is more merchants that are creating an experience that combines the online and the offline, or the omnichannel. True omnichannel of offline, online and omnichannel that sell on eBay or Facebook and Amazon. So I see more of that. That includes the Buy Online Pick Up In Store. I see the carriers continuing to raise prices. Which will put pressure on businesses to continue to look to 3PLs. I think you're going to continue to see a big, big push for brands that are selling and fulfilling via 3PL as opposed to their own warehouse because they just can't compete as the costs go up. And in my personal one, I just hope businesses are [00:39:21]... I hope businesses are starting to look at shipping as something that they value, like the product assortment or like their range. I want to stop getting empty brown boxes. I want to get something I can compost. I want to get something that can offset my carbon emissions. I want things that create a really good experience for shipping as opposed to being an afterthought. [00:39:40]

Brian: [00:39:43] Love that. Don't make shipping an afterthought. Make it a good experience. What a great way to end. Phillip, take us home.

Phillip: [00:39:51] Yeah. Thank you so much, Matt. And we love these sorts of deep dives and I love getting so many different perspectives on the same core idea and the same core topic. We hope you do too. And stick around for the rest of this season a Step by Step. And if you want more, you can find all of our episodes of Step by Step in the six seasons that we've put together. You can find that over at or wherever podcasts are found. Thank you for listening to Step by Step by Future Commerce.

Brian: [00:40:22] Thanks, Matt.

Phillip: [00:40:24] Thank you so much for listening to this episode of Step by Step. Remember, we have five other seasons available, and you can get all of those at And thank you so much to Shippo for sponsoring this season of Step by Step. Remember that Shippo has everything that your business needs to manage customer delivery experience. You can click, print, and ship and that's it for free. And you can get started today by going to Thank you so much for listening to Step by Step.

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