Online Retail Today

The Fast and the Furious: Satisfying Need for Shipping Speed

eCommerce, Order Management, instore pickup, ship from store
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By and large, the hype surrounding next-day and same-day delivery for eCommerce has been just that: hype. Nonetheless, greater efficiencies and the looming influence of Amazon Prime are increasing shoppers’ expectations that shipping will not only be free, but also fast.

Consumers still overwhelmingly favor free shipping for online purchases. Fully 60% of eCommerce purchases involve free delivery, and 59% of consumers say they’re at least somewhat likely to abandon purchases altogether once they learn they must pay delivery fees, according to measurement firm comScore.

At the same time, delivery timeframes are increasingly an important part of the equation, and expectations are edging upward that even free shipping will be swift. For its annual pre-holiday consumer survey, Deloitte found that 89% of shoppers believe “within two days” qualified as “fast” shipping, whereas just 42% considered “within 3-4 days” to be fast — down fully 33% compared with 2015. The same study found that 88% of consumers would pay nothing extra to receive items within 3-4 days, and two-thirds would still pay nothing extra to receive goods within two days.

And while most shoppers acknowledge that they should expect to pay something extra for same- or next-day shipping, they don’t expect retailers to pass along the true costs of such a service. Deloitte found that shoppers would be willing to pay less than $5 for same-day shipping, and eMarketer reports that 78% of consumers expect to pay less than $10.

This need for speed arises from a number of causes — chief among which is Amazon’s ultra-successful Prime service, which offers its members free two-day shipping on most items and one-day and same-day delivery in a growing number of locales. Membership is estimated to top 65 million consumers, which means a sizable percentage of online shoppers are accustomed to speedy service. In addition, industry-wide promotions such as Free Shipping Day, which in 2016 promised delivery by Christmas for items ordered on Dec. 16, and which generated $967 million — up 14% compared with 2015 — help feed the assumption that shipping speed is a matter of will on the part of retailers versus concrete logistics.

In order to satisfy this rising expectation without eroding margins, small- to mid-sized retailers must invest in operational efficiencies to make their fulfillment options as nimble as possible — all while clearly communicating capabilities to shoppers. Among the priorities:

Use stores to speed fulfillment. Merchants with retail outlets should make the most of their capabilities when it comes to connecting shoppers with products quickly and seamlessly. That means investing in:

Strategically award expedited shipping to loyal customers. Merchants should consider offering free or discounted expedited shipping to frequent buyers, to loyalty club members for special occasions (such as birthdays or around the holidays), and/or to social media advocates whose activities are boosting the brand. In so doing, merchants give VIPs access to the swift speeds they expect, without making unsustainable blanket offers to the brand’s entire audience.

Relentlessly message delivery timeframes and costs. Shoppers shouldn’t have to wait until checkout to see when they can expect to receive their orders; indeed, with 48% of shoppers saying a guaranteed delivery date is an important purchase factor, according to the UPS/comScore study, dates and fees should be prominent all along the path to purchase. Merchants should take a page from Amazon and invest in the technology to display estimated delivery dates as early as the product page. And around crucial dates such as Christmas, merchants should create promotions for email campaigns and social media highlighting cutoff dates and fast fulfillment options.

Do invest in accelerated shipping if the situation demands it. Merchants whose audience or product offering meet certain criteria will find themselves outgunned by the competition if they fail to build infrastructure to offer same- or next-day delivery.  Among those criteria:

  • Location, location, location. Expectations are higher for swift service in metropolitan areas where there are plenty of fulfillment options for merchants, ranging from delivery by Uber to courier service. And for merchants operating internationally, major urban hubs and countries with high population density are fertile ground for innovative fulfillment operations.  
  • High-consideration products. Electronics and household items that come with a higher price tag often include an expectation of white-glove service, including expedited delivery.
  • Essentials. Need-it-now items such as diapers and toilet paper should arrive quickly, according to a study from Internet Retailer and Bizrate. One in five shoppers expect household items to arrive within one or two days, as do 15% of baby item buyers, the study found.

 

How are you deploying expedited shipping options to maximize customer satisfaction?

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