D2C Digest #58 | Increasing card abandonments, Amazon's new marketplace, crisis in the Suez Canal

Hey there, great people of the D2C community who are building fantastic things! This is your host Berkay writing.

Take a 5-minute break and dive into D2C Digest for a quick overview of what’s happening in the D2C market worldwide!

🚚 Delivery options costs cause abandoning baskets

Well, this is interesting news.

According to a recent Telegraph article, In 2023, online retailers missed out on £34.4 billion in sales due to shoppers abandoning their baskets at checkout. The main reasons for this growing trend include high delivery costs, lack of preferred shipping options, and new fees for returns.

Many shoppers abandon their carts due to unexpected costs, such as high postage fees revealed only at the end of the purchase process. Additionally, 47% of customers leave their carts when websites are slow to load, and poor customer service deters 21%. Other factors include complicated payment processes, distractions, and the search for discount coupons.

Top reasons for abandoning baskets.

According to Klaviyo consultant Hannah Spicer, however, there are ways to cope with this.

1. Set Up Abandoned Cart/Checkout Email Flow in Klaviyo:

- Use Klaviyo for abandoned cart/checkout emails, matching them to your marketing style, running A/B tests, integrating SMS, and managing daily email limits. Implement flows for Abandoned Browse and Added to Bag scenario

2. Implement Additional Flows:

- Capture potential customers who abandon their carts earlier in the process, boosting overall revenue.

3. Address Customer Concerns:

- Provide clear information on delivery and returns policies, free delivery thresholds, and contact options to reassure customers.

4. Highlight Shopping Benefits:

- Clearly communicate the value and benefits of shopping with you to address why customers may hesitate. This doesn’t have to mean discounts but rather emphasizing the unique value of your brand.

For more details 👇

Her LinkedIn post about cart abandonment

😮 Amazon's new direct-from-China marketplace

Amazon has long dominated the market by offering fast delivery and low prices. However, Chinese retailers Shein and Temu have disrupted this balance by offering even cheaper prices, despite longer delivery times.

Consumers are showing they can wait longer for cheaper items, impacting Amazon's sales. In response, Amazon plans to launch a new online store featuring low-cost, unbranded items from China. These products will be priced under $20 and shipped tariff-free within 11 days.

This move raises several questions about the impact on Amazon’s relationship with its third-party sellers, who already struggle with increasing fees and competition from Amazon’s private labels.

Additionally, how will customers react to more cheap Chinese goods on Amazon, and is this strategy sustainable given potential changes to tariff regulations?

🛳️ Shipping disruptions in the Suez Canal cause increasing prices and delays

Maybe a bit unexpected for Amazon, supply chains are yet again disrupted in the Suez Canal.

Global shipping prices are surging due to intensified attacks by Houthi rebels on vessels heading to the Suez Canal. This conflict has led ships to reroute around Africa, extending journeys by up to two weeks. These disruptions, coupled with a drought in the Panama Canal and strikes by dockworkers in the US and Germany, have significantly impacted the global supply chain.

Stephanie Loomis from Rhenus Logistics notes that shipping costs from China to Europe have soared to about $7,000 per 40-foot container, up from around $1,200 pre-pandemic. Similar increases are seen in trans-Pacific routes, with rates now over $6,700 from Shanghai to Los Angeles.

Retailers are bracing for potential product shortages and delivery delays, especially during the holiday season. Importers are facing frequent booking cancellations and rising fees, further complicating logistics. David Reich, whose company assembles gift baskets, has been hit with escalating “peak season surcharges” and limited shipping space.

Experts suggest these issues could exacerbate inflation, impacting the economy further. As carriers manipulate capacity to raise rates, the situation remains unpredictable, with no clear resolution in sight.

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