Delivery time, shipping options impact shopper decisions

by | Aug 30, 2017

Think about the last time you were in a bookstore or your favorite clothing store, and they didn’t have the book or item you wanted. So they offered to order it for you and have it in the store in a couple of days.

Did you take them up on the offer? Or did you decline because this was more of an impulse buy than an actual thought-out, dedicated purchase? A few days pass, and by the time the book would have arrived at the store, I’ve already forgotten I wanted it.

There are times I wander into a bookstore, suddenly struck by a mood for a particular book, and if they don’t have it, the mood is gone. Other times, when I want a certain book, but don’t have time to go to the bookstore, I’ll order it online, satisfied that it will be here in a couple days. And still others, I’ll let the bookstore order it for me and have it delivered later. It’s the same at places like REI, where I can order a product online and have it shipped to my closest store at no cost, or I can have it delivered to my home for a few dollars.

The point is, consumers are fickle creatures, who often want instant or near-instant gratification. If it takes too long to get the product into their hands, you may never get it to them – or they could buy it from someone else who was able to get it into their hands sooner.

Consumer online buying decisions

People order online for a number of reasons. Maybe they don’t need their item right now, and so they’re willing to wait for it to be delivered. Or maybe it’s cheaper to order it online rather than buying it in the store. It’s become such a trend — Millennials to go to a store, find an item, and then order it from Amazon right there on their phones — that there’s a term for it: show rooming. Sometimes the reverse is true, where the look the item up online first and ask for it to be ready for them to be picked up at the store, whether the store fulfills it or if it’s shipped to the store from a warehouse.

Or maybe they order a product online because they can’t find it at any of their local stores. Or maybe it is just an impulse buy that they can satisfy with a click.

According to a 2016 study by one of our partners, Dotcom Distribution, 87 percent of online shoppers said shipping speed was a factor in deciding to order products online again. Similarly, 67 percent of them would pay more money for same-day shipping if they had a deadline, and 47 percent would pay for it just because they wanted the package faster.

Shipping options and consumer expectations

When it comes to shipping rates and times, the shipping options that clinch the sales will vary based on customer needs and price. Some people will choose the longest shipping method, because it’s the free or cheap method. Others will pay Amazon $99 for the privilege of reliable free two-day shipping. And still others need a product so quickly, they’re willing to pay a premium for the fastest shipping method they can get.

Whatever option is chosen, it’s important to follow-through on your shipping promises, though. Customers expect you to deliver on time, and if you don’t, it will harm the customer relationship and potential future sales. This may especially be true for deliveries expected around the holidays, but is important to your reputation for other orders, too. People made a choice to buy from you and they’re depending on you to follow-through. If your shipment to the customer is delivered late, it could very likely be the last order they ever place with you.

For example, recently one of my colleagues ordered some dog toys and a prescription dog food from the retail e-commerce site of a national pet supplies store chain and chipped in for the fastest shipping rate because he needed it to arrive before the weekend. He could have purchased the special diet dog food from the veterinarian down the street, but it was much more expensive. Well, the toys got shipped from one warehouse and made it on time, the dog food shipped from a different warehouse and still hadn’t arrived by Friday evening. Not only was the package not going to be delivered until Monday, a full four days later than promised, he barely had time to get to the vet before it closed to make sure his dog had enough special food to make it through the weekend. After he explained the situation to customer service, the company sent him coupons for his next purchase, but what are the odds he ever orders from them again?

Addressing shipping options

Regardless of why a customer places an order or how quickly they want it, it’s clear that if over two-thirds of your customers are willing to pay for faster shipping options, you should at least have two-day shipping available in your toolbox. This means either working with drop ship capable suppliers, doing order fulfillment from your different retail stores, or even creating your own shipping process from your warehouses and distribution centers that you can provide two-day shipping to your customers.

Two-day shipping aside, order process automation is extremely important for delivering on speedy shipments. The longer it takes from online order submission to fulfillment and shipping, the longer the delivery time or the greater the expense you need to shell out to deliver it faster and on time. If you can automate all of the documentation operations from order submission through to the fulfillment, you can speed up at least some of the process. For example, EDI can be used to automate document processing and transmission, which among other valuable services, can be especially useful for speedy orders when vendors are doing drop shipments for retailers. Carrier integration can incorporate your shipping software into your order fulfillment process, automating shipping label and document printing.

You’ll have to figure out what shipping options and delivery methods work best for your company and your customers. If you’re unable to accommodate two-day shipping yet due to logistics or expense, you may be able to offer other incentives. Three-day shipping may be feasible or maybe even a longer-term free shipping option if you can find the right providers. Explore the shipping options available to you and see what you can do to keep up with what consumers expect from their shopping experiences.

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Lisa Sacquitne

Lisa Sacquitne

Product Manager, Fulfillment at SPS Commerce
Working alongside our customers, development teams and customer success operations, Lisa is driven to advancing SPS Fulfillment to address the order fulfillment challenges of the digital retail era. Her articles offers insight into the future of order fulfillment and how members of the SPS Retail Network can better service their retail customers and the consumer using SPS Fulfillment.
Lisa Sacquitne

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