Insights to Help Your Business

Revolutionizing eCommerce: UPS Capital Unveils AI-Driven Future of Shipping and Customer Satisfaction

Rapid eCommerce growth drives unprecedented shipping challenges

Woman sitting on the couch, opening a box.

In a new report by UPS Capital, surveyed merchants reported a staggering 30% increase in shipping volume driven by eCommerce growth over the past two years, confirming that the shipping and logistics sectors are at a critical junction. The explosive rise in online shopping, expected to grow  by more than 10% annually through 2027, has introduced significant challenges, including increased risks of lost, delayed and stolen packages. These issues threaten not only merchants’ bottom lines but also their ability to deliver exceptional customer experiences, which is vital for maintaining brand loyalty.

The Future of Shipping: A Path Paved by Innovation and Personalization Report, commissioned by UPS Capital, uncovers valuable insights into how the rapid growth in eCommerce has influenced merchants’ approach to shipping and explores key trends that are shaping the future of logistics.

More Packages, More Challenges

The recent surge in eCommerce has led to a significant increase in shipping volume, with over half (54%) of surveyed merchants reporting a rise of more than 30% in the past two years. This aligns with customer trends, as 48% of surveyed consumers intend to increase their online spending in 2024.

This influx of packages in the network has introduced more disruptions, with merchants facing financial impacts and challenges in meeting customer expectations and ensuring satisfaction. 

Top Three Challenges Surveyed Merchants Anticipate as eCommerce Volumes Rise:

  • Fulfillment speed challenges
  • Managing spikes in demand during peak periods
  • Enabling more real-time shipment tracking and transparency

AI is Delivering the Future of Shipping

In this rapidly evolving landscape, technology is playing an increasingly pivotal role in supply chain and shipping dynamics — with AI emerging as a crucial solution. The UPS Capital report discovered that three in four (77%) of surveyed SMB decision-makers have implemented some form of AI-enabled technology.

Surveyed merchants anticipate AI-driven solutions will reshape the shipping industry by enhancing efficiency (67%), reducing human error (58%), and improving inventory management in warehouses (44%), showcasing AI’s enormous potential in transforming the shipping landscape.

Customer Experience Is King

The focus has shifted beyond shipping to enhancing the entire post-purchase journey, with companies doubling down to cultivate and retain customer satisfaction. To stand out amongst competitors, surveyed merchants are implementing customer loyalty programs and exploring more ways to elevate the returns experience.

Loyalty Programs Matter More Than Ever

By offering tangible rewards and exclusive experiences, loyalty programs serve as more than incentives for repeat business. They play a pivotal role in shaping brand image and customer perceptions.

This is why nearly half (49%) of surveyed consumers rank loyalty programs as one of the most appealing benefits that retailers offer, second only to free shipping (81%). Consequently, more than half of the merchants surveyed are prepared to offer exclusive discounts (55%), redeemable rewards (55%), and early access to new products/services (54%).

Making Lemonade Out of Lemons in the Returns Process

Returns are an inevitable part of the online shopping experience, with 60% of surveyed merchants acknowledging that over 10% of their orders end up being returned.

Interestingly, while an impressive 92% of merchants in the study express confidence in their returns logistics, they also candidly report encountering significant challenges in processing returns, such as time, cost, customer service impact, and inventory management.

Top Challenges Surveyed Merchants Face When Processing Returns

  • Processing time (50%)
  • Cost of reverse logistics (43%)
  • Identifying root causes (36%)
  • Customer service impact (36%)
  • Inventory management (33%)
  • Financial forecasting (30%)

Surveyed merchants see data analytics and automation as potential solutions to alleviate some of the challenges posed by returns. Specifically, they see these technologies as instrumental in optimizing inventory management (50%) and reducing return processing costs through optimized return shipping (37%).

Packaging It Up

The surge in eCommerce has emphasized the importance of shipping for both merchants and consumers alike. The post-purchase journey carries immense weight, influencing customer satisfaction and retention, and ultimately, the overall financial well-being of businesses. As merchants navigate this intricate landscape, effective risk management becomes imperative.

In response to these evolving challenges, InsureShield® Shipping Insurance by UPS Capital Insurance Agency, Inc. has launched DeliveryDefense™ Address Confidence, a groundbreaking predictive analytics solution. DeliveryDefense predictive analytics represents a significant leap forward in eCommerce shipping, offering merchants a proactive tool for risk mitigation. By assessing the likelihood of successful deliveries before a label is created, the DeliveryDefense tool helps avoid common issues like porch piracy and problematic returns, paving the way for smarter decisions, boosted revenue, and yielding better customer satisfaction.

For more data on post-purchase trends and insight into how merchants can master the shipping experience, get the full report.

For further media inquiries, please contact khensler@ups.com

Additional Resources

Close up of hands using a smart phone by a laptop

Insights to Help Your Business

How the FTC’s New Regulations Will Reshape Checkout Protection (And How to Stay Ahead)

Why your current shipping protection model could be putting you at risk.

Insights to Help Your Business

Navigating Shipping Claims

Discover the secrets to streamlining your business and learn the keys to navigating a seamless and fast shipping claims experience with InsureShield® Shipping Protection.

Close up of hands holding and placing a shipping label on a box

Insights to Help Your Business

What Is Shipping Insurance?

Learn how shipping protection can help safeguard your business. Mitigating risks surrounding packages in transit can give you extra peace of mind.

Back view of young businesswoman using laptop with blank screen mockup at workplace in office, copy space

Insights to Help Your Business

Self-Insurance vs. Shipping Insurance: What’s Best for You? 

What are the common pitfalls of self-insurance, and is shipping insurance worth it? 

Male in a safety vest and hard hat holding a tablet in a warehouse

Insights to Help Your Business

Mastering the Complexities of International Shipping

Protect Your E-commerce Business with InsureShield® Coverage.

Broken plate in damaged cardboard box top view, damaged home delivery unpacking box close up

Insights to Help Your Business

How to Prevent Shipping Damages in E-commerce Deliveries

As an e-commerce business owner, you hold the key to preventing shipping damage. Every shipment you send out carries the potential for damage, and it's in your hands to mitigate this risk. Remember, shipping damage not only costs you money but can also tarnish your hard-earned reputation.

Table with laptop and gift boxes with sale tags on table in warehouse. Online ecommerce retail business black friday discounts deals, free shipping. Best buy holiday offers concept storage background.; Shutterstock ID 1832266981; purchase_order: Ted Bruner; job: ; client: ; other:

Insights to Help Your Business

Preparing for Peak Shipping Season 2024: 7 Tips for Success
Here is your guide on how to prepare for peak shipping season as an e-commerce business in 2024.
Female smiling at the camera in front of a computer and warehouse

Insights to Help Your Business

What is the Difference Between Shipping and Delivery?

We want to help you improve customer relationships and keep expectations clear with our simple shipping and delivery guide.

Female checking a box while surrounded by multiple boxes in a warehouse

Insights to Help Your Business

Are Retailers Ready for Peak Returns Season?

The holiday rush might boost your sales, but is your business properly prepared for the surge in returns?

Semi-truck driving down an empty country road

Insights to Help Your Business

How Weather Risks Impact the Shipping Industry

Protect your business from extreme weather and avoid costly damages and delays.

Male wearing safety gear entering a shipping containers information into a device

Insights to Help Your Business

Cargo Theft Insurance: What Every Merchant Needs to Know in 2025

Protect your shipments from fraud, cyber scams, and theft with the right coverage.

Warehouse shelves full of boxes

Insights to Help Your Business

Understanding Shipping and Estimated Delivery Dates

Discover the important differences between different dates for shipping and receiving packages.

Male wearing a mask and using a laptop in a warehouse full of boxes

Insights to Help Your Business

Supply Chain Risk Management: Always Stay Ahead

Tips for mitigating risks and protecting your business against global supply chain challenges.

Insights to Help Your Business

Top Shipping Stats and Tips Merchants Should Know in 2025

As we enter 2025, understanding key shipping statistics can help merchants refine their strategies, optimize operations, and boost customer satisfaction. 

Three packages sitting on the porch of a closed business

Insights to Help Your Business

Complete Guide to the Cost of Shipping Insurance

Compare carrier rates and discover the benefits of an InsureShield® policy.

Airplane wing over land with the sunrise behind it

Insights to Help Your Business

UPS Capital Unveils DeliveryDefense™ Technology

Empowering Merchants with Advanced Data Analytics to Identify High-Risk Deliveries

Warehouse worker talking on the phone holding clipboard in a large warehouse; Shutterstock ID 252244078; purchase_order: Channel Partner; job: ; client: ; other:

Insights to Help Your Business

Winning Shipping Strategies Merchants Need for 2025

From reliability to real-time tracking, getting shipping right is critical for boosting customer satisfaction and loyalty.

Hands on a laptop with analysis graphs on the screen

Insights to Help Your Business

Texas Precious Metals
Discover how DeliveryDefense™ Address Confidence elevates Texas Precious Metals shipping game.
Two packages sitting on a welcome mat in front of a door

Insights to Help Your Business

DeliveryDefenseData Transforms E-Commerce Logistics and Reduces Losses

Minimize Losses, Maximize Efficiency – Your Secret Weapon for 2024!

 

Male UPS driver carrying two packages down a flower lined sidewalk

Insights to Help Your Business

The Expedited Shipping Challenge: Balancing Speed, Cost, and Customer Satisfaction

Businesses must balance speed and affordability while managing the complexities of rising consumer expectations.

Two forklifts stacked on top each other going between shelves of boxes

Insights to Help Your Business

The Global Retail Race is Heating Up: How U.S. Merchants Can Compete

International retailers are driving notable changes domestically, with 85% of merchants surveyed reporting adjustments to their shipping strategies to keep up.

Shipping Challenges Statistics of what challenges AI can solve for

Insights to Help Your Business

Revolutionizing eCommerce:  UPS Capital Unveils AI-Driven Future of Shipping and Customer Satisfaction

Rapid eCommerce growth drives unprecedented shipping challenges

Insights to Help Your Business

Technology is Driving the Future of Shipping and the Supply Chain

The shipping industry is transforming

Close up of a pharmacist pulling medicine from a pharmacy box

Insights to Help Your Business

eCommerce Healthcare and Delivery: Annual Checkup

Examining the transformative trends shaping the healthcare supply chain in eCommerce.

Female sticking labels on a wire shelf holding packages

Insights to Help Your Business

Beat the Holiday Rush: 7 Ways Retailers Can Prepare for Peak Shipping Season
In this guide, we'll explore key strategies to help retailers gear up for the peak shipping season. Discover best practices for managing increased demand, ensuring timely deliveries and safeguarding your shipments with insurance.
Male and female looking in a jewelry store display window

Insights to Help Your Business

How to Prepare for Black Friday and Cyber Monday

Black Friday and Cyber Monday are great opportunities for your business to thrive. Use this guide to help prepare your e-commerce business for the online shopping holiday rush.

Female sitting on a couch with her hands in an open box

Insights to Help Your Business

Personalized Shipping Experiences: The Next Frontier for eCommerce Report

Learn what consumers are looking for in an online experience.

Male sitting on a couch and using a laptop

Insights to Help Your Business

Stay Ahead of the Claims Game

Time-saving tips for a smooth claims process.

Insights to Help Your Business

InsureShield® Shipping Insurance vs. Veeqo: Understanding the Differences

In the world of e-commerce shipping, there are many coverage options to choose from when it comes to protecting your business and your customers. With so much noise out there, it's essential to understand the nuances in what's available so you can rest easy knowing you are leveraging the best coverage option. Amazon's newest shipping software, Veeqo, may seem appealing to the eye but when compared to InsureShield Shipping Insurance - there's really no comparison at all. Read on to learn more.

Insights to Help Your Business

UPS Capital Unveils How Merchants Can Thrive Amid Surge in Global eCommerce

Use these key insights and solutions to enhance your 2024 shipping experience and equip you with the ability to thrive in the rapidly evolving eCommerce landscape.

Insights to Help Your Business

Reverse Logistics Jeopardy
Test your knowledge and skills on reverse logistics with our jeopardy game!
Male handing a bottle of wine to a female in a shop

Insights to Help Your Business

Top 3 Ways to Prioritize Customer Experience in the Post-Purchase Journey

Let's dive into each of these trends to understand how they’re shaping the future of customer experience.

Female making bead jewelry with tweezers at a desk

Insights to Help Your Business

SMB Shipping Pulse Check Report: How Shipping Experience is Driving CX

Learn how shipping experience is a key component to CX.

Female on her smartphone with shopping bags on her arms

Insights to Help Your Business

Unlock the Secrets of the Upcoming Holiday Shopping Trends

Welcome to The Ultimate 2023 Holiday Shopping Trends Guide!

Semi-truck driving down an empty road surrounded by green land

Insights to Help Your Business

Last Mile Delivery Trends to Get Excited About in 2024

With e-Commerce’s rise in popularity, the last mile has become the most crucial part of the delivery process.

Person in warehouse doing inventory

Insights to Help Your Business

What Are Incoterms and Why Do They Matter in Shipping?

Understanding the meaning of Incoterms and their role in international trade and contracts.

Two packages sitting on a welcome mat in front of a door

Insights to Help Your Business

Protect Shipments from Porch Piracy

Protect against package theft with comprehensive coverage for your business. Learn more on how to build loyalty and trust with your customers.

Male truck driver smiling and looking out the window

Insights to Help Your Business

The Difference Between Shipping Insurance and Carrier Liability

 

Unraveling the secrets of comprehensive coverage and avoiding shipment nightmares.

Female opening a cardboard box from her couch

Insights to Help Your Business

How to Strengthen CX by Empowering Customers with Options

Consumers want to be in the driver seat for their delivery experience. See how the InsureShield® app for Shopify® merchants can support a positive post-purchase experience and give customers more control.

Cargo ship full of shipping containers going through turquoise water

Insights to Help Your Business

Out to Sea

Can your business stay afloat if a container goes overboard?

Two semi trucks driving down the road.

Insights to Help Your Business

2022 Freight Shipping Survey

Learn about the realities associated with shipping freight straight from the people who do it every day.

Woman putting a label on a box in warehouse

Insights to Help Your Business

2022 State of Shipping Study

Prepare for delivery challenges with UPS Capital’s exclusive report.

Male delivering a box with van doors open showing more boxes

Insights to Help Your Business

2022 Last Mile Report

An exclusive look at same-day delivery risks and rewards.

Load More

Unless otherwise noted, all statistics used herein are derived from or based on information contained in the Address Risk Report, which is based on a compilation of two independent studies conducted by Dynata in December 2022 of 1,000 U.S. consumers aged 18+ and 500 U.S. SMB owners and decision makers whose businesses report $750K - $100M in revenue.

DeliveryDefenseTM services are offered through UPS Capital Corporation. UPS Capital Corporation reserves the right to change or cancel any DeliveryDefense service at any time. Each DeliveryDefense service is governed by the applicable terms and conditions and certain limitations and exclusions apply. This document/site is for informational purposes only, is intended only as a brief summary of the services, and does not constitute a contract, agreement, or offer of any kind, with respect to any DeliveryDefense service or other subject matter described herein. DeliveryDefense services may not be available in all jurisdictions. Statistics are valid as of the last day of the most recently ended calendar quarter. Actual scores are based on delivery, claims and other data collected during the 24 months preceding the date the score is rendered.