Between 2015 and 2016, the number of online shoppers grew by 20 million (totaling about 224 million), and the total number of online transactions grew by 115 million. This is just the latest spike in e-commerce growth thanks to the introduction of mobile shopping, and it isn’t slowing down yet; the National Retail Federation expects online retail to grow between 8% and 12% to as much as $443 billion through 2017. However, mobile’s increasing share is indicative of something else: a shopper’s hunger for convenience.
This means there’s another area that requires retailer attention: shipping for online shoppers. The fact is, 66% of e-commerce shoppers agree that the shipping experience is a decisive factor when shopping online, and what’s more, 73% of all consumers say that a superior shipping experience would impact their decision to shop with an e-commerce retailer other than Amazon. Shipping times play a major role in whether the market shops online and for which products they will purchase. For instance, 92% of consumers still prefer to buy groceries and other food in-store, yet 68% said they’d be willing to buy these items from Amazon or another grocer’s website. The probability that consumers could receive those groceries in two days or less has an influence on that behavior. This post will discuss five major shipping expectations for today’s shopper, and touch on the impact they have.
Shipping and Delivery Musts
Whether a shopper is buying one item or purchasing a subscription service to regularly receive items, they have certain desires — a “wish” list, if you will — that influences their purchase decision and brand perception. More than 70% of consumers say they’re unlikely to return to a brand after a poor delivery experience. So it isn’t merely that great shipping experiences win shoppers over; failing to meet expectations can actually lose them.
The name of the game here is convenience. Shoppers don’t just want to receive their items quickly, they want to know and even control when they’ll receive their purchase. While 96% of customers expect brands to offer standard shipping (i.e., 5 to 7 business days, not the 10 days offered in the 20th Century), some surveys indicate that shoppers are barely willing to wait that long. (In fact, the amount of time they’re willing to wait shrank from 5.5 days in 2012 to 4.8 days in 2016.) More importantly, 85% want shipping to take between 1 and 3 days, 80% want shipping within a day (which was made immensely popular by Amazon), and 61% expect the hyper-local service that takes a mere 1 to 3 hours to arrive. Another 77% expect to see guaranteed after-hours shipping options that mean they can receive their packages when they’re not at work, in the evenings and on weekends. A further 76% expect to be able to pick the date and time to receive their purchase.
Surprisingly, companies are unable to deliver these shipping alternatives. Only 82% provide the 5 to 7 business day standard shipping, and while 75% of brands offer express shipping (1 to 3 days), a mere 53% have a 1-day shipping option. Only 20% of brands provide hyper-local choices. Why are so many of them unequipped to provide these options? Unfortunately, the answer is associated costs to expedite delivery. Companies will need to improve their logistics to meet this demand because the time is coming when shipping time shifts from the “wish” list to “absolute requirement.” Already, more than half of e-commerce shoppers view products based on available shipping methods.
Roughly 90% of consumers say that free shipping is the top incentive to shop online, and orders that provide free shipping tend to be 30% higher in value. Amazon has helped pave the way for this, as well, since its Prime members can receive 2-day shipping for free after the annual fee. Another 68% list free returns and exchanges (including the shipping) as a big incentive. More importantly, however, is the number of shoppers who will abandon their cart based on shipping price. A little more than 40% of consumers aged 35 to 44 years will stop a purchase due to the price, but 70% of shoppers over the age of 55 will also do so. In comparison to their male counterparts, females are more likely to suspend a purchase (65%). Shoppers will also hold the retailer responsible for any problems during shipping, which means they expect the company to fix the problem (even to providing a new product to replace one stolen from their porch) without any cost to themselves.
But Shoppers Will Pay Premium Costs for Value
While many shoppers want and expect free shipping, especially on standard shipping, that doesn’t mean they’re unwilling to pay premium prices for valuable service. About 75% of online consumers are willing to pay premium costs for expedited shipping, most often citing the need to purchase by a certain date, whether for themselves or for someone else as a gift. Don’t make the mistake of assuming this is only because they waited too long to make their purchase since that only represents 27% of those shoppers. Shoppers were also willing to spend extra on out-of-the-box delivery options; 73% of online shoppers willing to use drones for hyper-local deliveries were prepared to pay an extra fee to do so.
Reliability remains the most important characteristic of a brand for shoppers (27%) ahead of expertise and professionalism. Shoppers already hold retailers responsible for the shipping process, and being able to depend on a company for delivery at the right price, date and time is the cornerstone of providing reliable shipping. This means brands should consider making the best choice in logistics companies and ensure that shipping costs and liability are favorable before the shopper enters into the equation. After all, more than half of shoppers will expect expedited shipping on the replacement for delayed and damaged goods, and many will expect refunds or discounts on any shipping costs they’ve already paid, or coupons or similar compensation toward future purchases.
Three quarters of consumers believe proactive communication from a brand about shipping is important, and 38% expect to be immediately notified if something goes wrong. However, that’s hardly the limit to what shoppers want out of understanding the shipping process; almost all customers (97%) expect to be able to track their order. In fact, 80% want the tracking capability online or via their mobile device; of those, 76% expect regular SMS updates. Ultimately, this is an extension of the transparency today’s shoppers expect of brands, especially since as soon as your shopper clicks to purchase, they feel ownership over that order.
Interestingly, not all shoppers expect direct shipping. Some 82% of consumers want to be able to leverage click-and-collect, which is buying online for in-store pickup. Depending on inventory availability, this may require shipping from one store to another, but shoppers are less likely to want to wait much. They associate an in-store purchase with immediate gratification, so they’ll want to be able to see which stores are closest to them and whether or not the desired inventory is actually in-stock before they make the purchase. Another 36% want to be able to make an online purchase to pick up from some kind of collection point, such as Amazon Locker pickup points. This provides a similar sense of convenience because it avoids the risk of missed deliveries.
Shopper’s shipping desires have a major role in their final purchase decision. While the exact options a brand provides, in terms of shipping for online shoppers, needs to be balanced against revenue and profit margins, shoppers are going to turn to the brand that gives them the most customized options to meet their needs. Don’t lose them to your competitors by failing to keep up with expectations and evolving best practices, like offering quick shipping times at the right price and transparency in terms of tracking.