Have you ever received a split shipment? For example, after ordering more than one product from Amazon, did you receive them in separate packages over multiple days. If so, then you’ve received split shipments. This often happens automatically when different items in an order are fulfilled from different locations, which can have benefits. Firstly, it eliminates the need for order consolidation, which can be expensive. And secondly, customers get their order faster. But there are other considerations too. Let’s take a look at split shipments and what they mean for retailers and customers alike.
What are split shipments?
When an online order that contains multiple products is fulfilled in separate shipments it’s considered a split shipment. Even though the customer made only one order, they receive multiple packages, often on different days.
Why do shipments get split?
There are many reasons why a retailer will split shipments. The most common is that each of the SKUs in the order are warehoused in different locations. Some might be at a Distribution Center (DC) while others are part of a store’s inventory. Instead of waiting to consolidate all the items in a single location, they are shipped directly from each, resulting in multiple deliveries. The upside is that the products get to the customer quicker.
Other reasons for splitting shipments can be related to the carrier and transportation. For a large order, there may not be enough room on a particular truck, shipping container or plane. Or, if some of the products are available and others aren’t, available items might be shipped first.
Do customers ever intentionally split shipments?
This is particularly popular during holiday seasons when people are gifting through online stores. Savvy retailers make it easy for gifters to order multiple products for different people and addresses without having to create separate orders.
Is packaging ever a cause for splitting shipments?
Absolutely. Depending on the size of the products being ordered, it can be very common to split the shipment into multiple packages. Keep in mind that for fragile items there needs to be a lot more room for packing materials to ensure that deliveries don’t arrive broken or damaged.
There are also dimensional weights that affect shipping costs, so the packaging has to be in the sweet spot between too big and too small. Plus, for heavy and oversized shipments there tend to be a lot of surcharges.
Why would retailers want to avoid split shipments?
Higher shipping costs. The more shipments you send, the more you—or the customer—will pay. In countries like the U.S., postal service charges are based on shipping zones, so the final cost to the same destination may be different.
Europe has a different carrier model. In the EU, carriers may switch every time they cross borders, which drives up fulfillment costs. This means it can be more cost effective to ship products between different countries’ Distribution Centers rather than fulfilling from a DC in one country to a customer in another.
Packaging waste is also a big issue, particularly for brands that want to be eco-friendly. There are definitely green packaging tactics that brands can employ, but shipping multiple packages is definitely a no-no for brands that are conscious of their carbon footprint.
How do customers feel about split shipments?
Receiving multiple packages for a single order is not an ideal customer experience. It can be confusing if separate packages arrive over the course of several days. Of course, the alternative—holding the order until everything is available to fulfill—isn’t great for the customer either. The key here is to manage customer expectations from the start. If you’re going to split an order, let them know as soon as possible so they’ll know what to expect.
How can a retailer avoid spit shipments?
Rule number one is to have global inventory visibility so you know where all your Available to Sell (ATS) items are at all times. This will allow you to optimize your supply chain in the following ways.
- Maintain sufficient inventory in stock
A best-in-class Order Management System can let you know how much inventory you have in stock and when to re-order inventory. You can also set safety stock levels and help you save money by fulfilling from locations closest to the customer.
- Merchandising to reduce split shipments
With a quality OMS, you can recommend products (on the Product Detail Page) that can only be fulfilled from the same location as the main item on the page. This allows you to consolidate all the products at the source and reduce your packaging and shipping costs.
- Get to know your customers
Once you understand your customers and their purchasing trends, you can adapt your inventory to meet their demand. For instance, if certain products are often purchased together, you can group them as bundles and increase your average order value. Or if you have repeat customers purchasing the same product, consider offering a subscription plan.
- Give your customers the tools to consolidate their purchases
Large retailers like Amazon have successfully piloted programs where customers can choose to receive multiple orders simultaneously at a later time. This cuts down on packaging waste and the fossil fuels needed to transport items from the retailer to the customer. For brands who want to communicate social responsibility, this is a great tactic to let customers make choices based on their beliefs rather than two-day delivery.
For more information on how Fluent Order Management can help you manage split shipments, Contact Us today.