Most of us have had the experience of ordering items online and having them arrive in separate deliveries.
While it can be favorable to receive some items ahead of time, split shipments can result in fulfillment decisions that appear very odd to customers.
I recently placed my annual Sephora order (gotta rack up those Beauty Insider points) and was notified that it was being split into two separate deliveries. Not a major issue. But seeing how the order was split did make me question the efficiency of the fulfillment process:
The only products included in the first delivery were the free samples that I got to choose with my order, while the paid items came in a separate shipment.
This meant that Sephora was paying to ship and package items I hadn’t actually paid for, which makes little sense from a business standpoint. There’s no clear benefit to a customer receiving pint-sized samples ahead of actual merchandise. So, why not just consolidate the order?
However, this can be a lot easier said than done. Split shipments are best avoided by merchants, but it’s a common result when you have a disorganized fulfillment operation.
What is a split shipment?
A split shipment is when a customer order containing multiple items is split into two or more separate deliveries arriving at different times.
While customers are sometimes told ahead of time that they’ll be receiving a split order, many don’t find out until after their order has been dispatched to the warehouse for fulfillment. If split shipments are not adequately explained this can cause confusion or even frustration in your customers, which adds friction to the post-purchase experience.
Why do split shipments happen?
There are a variety of reasons why merchants end up splitting shipments. Sometimes, a customer may have ordered too many items to fit inside one package, forcing a merchant to send some items separately. If a particular item is oversized or fragile, it may require a different shipping method and packaging to the rest of your order, making it easier to send in its own shipment.
However, the most common reason for split shipments is because the items making up an order are being stored in separate locations. If a fulfillment center has run out of a particular product, it will need to be retrieved from somewhere else. Because of the time it takes for an item to be shipped between fulfillment centers and onward to the customer, most brands will send it to the customer directly to prevent the order from being held up.
But while a customer may get their goods faster, split shipments can cause a lot of problems for your business.
Why split shipments should be avoided
High fulfillment costs. The more an order is divided up into smaller shipments, the more fulfillment for that order is going to cost you. According to eFulfillment Service, fulfillment costs account for 70% of the typical Average Order Value (AOV). Additional packaging and shipping costs, as well as the labor costs associated with packing and handling, will cut significantly into your profit margins. Depending on how far your shipments need to travel to reach the end customer, this can result in your business making a loss.
Environmental impact. Packaging waste is a massive problem in ecommerce, and much of this is driven by split shipment activity that leaves customers with copious quantities of packaging to dispose of. As consumers become much more conscious of the impact of their purchasing decisions, they’re turning away from wasteful merchants in huge numbers. According to McKinsey, 55% of U.S. survey respondents say they’re very concerned about the environmental impact of product packaging.
More pressure on your fulfillment operation. Fulfilling split shipments is a lot less efficient than consolidating orders into one package. Adding lots of small packages to your assembly line, especially during peak periods like the holiday season, can overwhelm your fulfillment operation and result in lengthy delays to customers receiving packages.
How to manage split shipments effectively
Allow customers to opt for order consolidation. Customers could get frustrated if their order is split without their permission. It’s important to remember that not every customer is obsessed with getting their order as fast as possible; many would rather wait to receive everything together to save on packaging waste (something that Amazon started doing after criticism of its environmental impact). By allowing customers to select consolidated shipments, you can reduce the number of split shipments you’re fulfilling.
Ensure that you’re splitting inventory effectively. Using multiple fulfillment centers means shorter last-mile delivery times, but also higher odds of split shipments. By using accurate demand forecasting, you can ensure that you’re setting the right reorder point to prevent your locations from running short on stock.
Smart recommendations. Product recommendations play a big role in cross-selling and driving higher AOVs. But if you’re recommending products that aren’t in the same location as the items in a customer’s shopping cart, you’re increasing the likelihood of split shipments taking place. Try only bundling/recommending products which are located in the same facility to lower your fulfillment and shipping costs.
There are bound to be cases where you need to use split shipments to fulfill orders effectively. But by reducing the number of unnecessary order splits, you can increase customer satisfaction and reduce your fulfillment costs. In short, there’s really no downsides to having a more streamlined fulfillment process.