Apparel merchant Perry Ellis International wants everyone to save money on shipping — both the retailer and the customer. With a few new omnichannel features slated to launch within the next quarter, the retailer is on track to reach this goal, says Jay Nigrelli, senior vice president of ecommerce at Perry Ellis International.
Perry Ellis plans to launch buy online, pick up in store (BOPIS) before its Nov. 1 holiday code freeze, Nigrelli says. It also is launching buy online, pick up anywhere within the next week across its suite of brands including PerryEllis.com, OriginalPenguin.com, RafaellaSportswear.com, Cubavera.com and GolfApparelShop.com. And finally, Perry Ellis hopes to launch same-day delivery with Target Corp.-owned Shipt before the end of the year.
Rising shipping costs
The goal for Perry Ellis is to give its online shoppers more delivery options — which will improve their overall customer experience — while also saving the retailer money, Nigrelli says.
“We look at it as a value add for the consumer that is actually going to be cost-positive for us,” he says.
Currently, Perry Ellis’ freight cost is 20% of the cost its online sales, Nigrelli says.
“Freight has continued to rise for us, and it is definitely challenging our P&L,” Nigrelli says. “We had to raise prices, unfortunately, and pass on some of the cost, not all of the cost, over to the consumer.”
In addition to raising prices on its goods, Perry Ellis also increased its free shipping threshold over the past year to mitigate costs. Shoppers now receive free ground shipping for orders over $99, up from $75. That threshold drops to $50 for consumers in its loyalty program. This low-threshold perk has significantly increased the number of its shoppers who signed up for its loyalty program, Nigrelli says, without sharing more. For shoppers who don’t meet the threshold, Perry Ellis also increased the cost to ship the product to $10.99 from $7.99 over the past year.
Buy online, pick up anywhere
With buy online, pick up anywhere, shoppers can choose locations near to them, such as Walgreens, Dollar General and FedEx to pickup their Perry Ellis order from. This is attractive for shoppers, Nigrelli says, because Perry Ellis doesn’t charge a shipping fee for pickup orders. Plus, with only 30 of its own physical stores, many shoppers may not live near to a Perry Ellis store to pick up orders there.
Perry Ellis doesn’t incur the fee for shipping to a residential area because the packages are going to a business. This fee varies by location, but is at least $2.00 per shipment, according to vendor Via.Delivery, which is powering the buy online, pick up anywhere program. This residential fee also surges during the holiday season, so the savings will increase depending on the time of year.
Via.Delivery connects to more than 21,100 locations within 5 miles to 93% of the U.S. population, says Mitchell Nikitin, CEO and co-founder of Via.Delivery.
The vendor “piggy backs” off the existing package pickup framework that a number of retailers have already plugged into, Nikitin says. What Via.Delivery adds is the backend Application Programming Interface (API) technology for merchants to use, so these third-party locations appear to the shopper on the checkout page like any other shipping option. And then for the merchant, Via.Delivery provides the shipping label for the package and can send branded emails with the shipping updates to the consumer.
It took between three and six months to launch Via.Delivery, Nigrelli says. Perry Ellis did not pay a setup or integration fee to use Via.Delivery, he says. The retailer pays for each order it ships in this way.
“Not only is it a consumer benefit to help the customer experience, but based on Via.Delivery’s network and its FedEx account, it’s actually costing us less to ship it to a commercial location,” Nigrelli says. “And we don’t get charged the residential fee, so it becomes a win-win.”
Via.Delivery has about 15 other retailer clients. Retailers can choose this model of paying just for the shipping labels or select a software-as-a-service model. The model can vary in annual costs, up to thousands of dollars, Nikitin says.
18% of online shoppers say they have placed an online order and had it shipped to a collection point other than the retailer’s store for pickup, according to a Digital Commerce 360 and Bizrate Insights survey of 1,116 online shoppers in August 2022.
Nigrelli expects about 5% to 10% of its online orders will be buy online, pick up anywhere.
“It’s just about convenience for the customer,” Nigrelli says. “This is just an added convenience that’s a lower cost to us.”
Another benefit to buy online, pick up anywhere is that the packages are shipped to a secure location. Shoppers don’t have to worry about a package being stolen or being home when their packages arrive. In a 2022 Via.Devliery survey of 1,000 customers, 33% of shoppers that chose to have their package shipped to a third-party retailer said they did so because of fear of theft, Nikitin says.
Every month Perry Ellis’ customer service team receives calls about missing packages. While this is only a small fraction of orders, offering this service will ease shoppers’ minds. It creates a better customer experience in doing so, Nigrelli says.
“It’s more of the mentality around the consumer that the potential is there and reliving that anxiety from them would be helpful,” he says.
Perry Ellis is launching BOPIS as well. That also saves the retailer on shipping costs but comes with the benefit of potential additional purchases. Nigrelli expects about 3% to 5% of its online orders to be picked up in store.
Perry Ellis is No. 812 in the 2022 Digital Commerce 360 Top 1000.
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