According to original research by InternetRetailer, delivery drives business. Knowing how and when customers want to receive their online orders drives sales and loyalty. The Study addresses strategies and tactics from online retailers about how they stay in touch with their customers’ wants and needs while keeping fulfillment costs in check.
Making the sale is far from the final step, says the executive summary by RyanP.Kelly Senior Vice President, Sales, Strategy, and Communications, FedEx.
In an online transaction the product still has to arrive promptly and intact. Unless shoppers are satisfied with when, where and in what condition their product arrives, the merchant risks a high return rate and losing customers.
As consumer expectations shift, retailers have to adjust and evaluate their fulfillment and shipping options. Here are some ways they can do that:
Increasingly, consumers are demanding free shipping, and expecting orders to arrive quickly. Keeping up with those expectations requires an online retailer to weigh the costs and rewards of their fulfillment services. Stakes are high, says the report. A recent survey on behalf of delivery management vendor Metapack, of more than 3,500 consumers, found that 50% have abandoned an online shopping cart because they didn’t like the delivery choices.
That same survey found that 77% of consumers expect to see delivery options displayed on the product page. Results are from a survey of 3,577 consumers from the United States (520), France (512), Italy (511), The Netherlands (510), Germany (509), Spain (509) and the United Kingdom (509) conducted Aug. 4-11 on behalf of MetaPack, whose software for online retailers integrates with parcel carriers in the United Kingdom, commissioned by FedEx
Fast shipping is more important than free shipping when shopping online. Free return shipping, however, is far less common: Only 11.8% of Top 1000 merchants offered that service in 2016, up from 10.1% in 2015 and 8.7% in 2014, according to Internet Retailer data.
From the research report here are consumer expectations when defining “fast shipping.”
Satisfactory Fast Shipping Speeds
% Consumers Satisfied
Same day delivery
Next day delivery
Delivery within 2 days
Delivery within 3-4 days
Delivery within 5-7 days
Delivery within 1-2 weeks
Source: 2017 Holiday Survey, Deloitte LLP
Concluding, the report says that optimizing delivery is more important for retailers every year because of the steady growth in online shopping, which shows no signs of slowing down. Online retail sales to consumers in the U.S. totaled $394.9 billion in 2016, according to the U.S. Commerce Department, a 15.6% jump compared with 2015. It was the biggest increase in three years, and easily eclipsed the 2.6% growth in retail sales in U.S. physical stores in 2016.
Web sales also continue to increase their share of total retail sales, accounting for 11.7% of 2016 retail sales after factoring out the sale of items not normally purchased online, such as fuel, automobiles and sales in restaurants. In the past decade, e-commerce has more than doubled its share of retail sales, and that growth in online sales has continued in 2017. Consumers purchased
$107.00 billion worth of retail products on the web in the third quarter, an increase of 15.5% compared with $92.64 billion in the third quarter of 2016, according to the U.S. Commerce Department.
Through the first three quarters of 2017, online sales have totaled $310.16 billion, government data shows. Factoring out the sale of gas and automobiles, which are items not typically purchased online, total retail sales through the first three quarters of 2017 reached $2.525 trillion. Using those figures, the online portion of total retail spending through the first nine months of 2017 would be approximately 12.3%.
Internet Retailer believes this is the most accurate way to calculate the online component of U.S. retail sales, says the report. To attract and keep customers, retailers must meet, or better yet, exceed, expectations to generate loyalty and improve sales
The original study from Internet Retailer may be found here.