The world of ecommerce deliveries is evolving, as customers increasingly seek a diverse array of ecommerce delivery speed possibilities. However, many shippers are choosing to keep things straightforward. For example, one study revealed that nearly 50% of brands keep it simple by either not offering free shipping or they provide site-wide free shipping for domestic orders. 

Is the “one-size-fits-all” approach truly the best route, or is there a more optimal solution? In this article, I’ll look at this question and others, such as: Is it beneficial to offer a full spectrum of delivery options like same-day or economy shipping? Also, what strategies are competitors using? Further, how can an ecommerce business maximize delivery choices while maintaining profitability? And finally, how can tailored delivery options help expand your customer base? I’ll also outline a 5-step approach using market segmentation to optimize your ecommerce delivery options tailored to your customers.

1. Understanding Customer Ecommerce Delivery And Curbside Pickup Expectations.

Customer expectations regarding ecommerce delivery and curbside pickup have evolved dramatically in recent years. Fast delivery has become the norm, driven by industry giants like Amazon. As a result, customers now expect timely and convenient delivery options from online retailers. To remain competitive, businesses must consider their customers’ expectations and adjust their delivery and curbside pickup processes accordingly. To detail, see below for what is becoming the standard for ecommerce delivery speed as well as the prerequisites for you to provide competitive, cost-effective options.

a. Current Ecommerce Delivery Landscape.

Until recently Amazon set the ecommerce delivery standard of 2-day free shipping. Now in many cases, Amazon is offering 1-day free shipping. Moreover, there are now additional forces that are setting the bar for ecommerce delivery. Namely, these are restaurant food delivery companies like DoorDash, grocery delivery, curbside pickup like Walmart, and same-day delivery companies like Instacart. Also, most national retailers are now offering alternative delivery options than traditional parcel delivery services from FedEx, UPS, or USPS. To detail these changes, Mckinsey provides a synopsis of the current ecommerce delivery landscape in terms of delivery speed by retail segment. See below:

Current Delivery Speed by Retail Segment

• Food and Grocery—less than one day
• Beauty—less than one day
• Apparel—less than two days
• Home Décor—less than two days
• Electronics—less than two days
• General Merchandise—two days or less

b. The Ecommerce Operational Traits Needed for a Better Customer Delivery Experience.

The Best Ecommerce Operations Traits You Need To Have: Be Fast, Proactive, Reliable, Tailored, Data-Driven

You may wonder how these companies can make a profit by offering 2-day or less delivery service. Well, some of them are not profitable being propped up by venture capital or major investments at the corporate level. However, the challenge for ecommerce companies is that more and more online retailers are figuring out how to navigate through the complexity of last-mile delivery and make a profit. If you are in the ecommerce business, you need to figure out how you can make a profit and provide a great delivery experience.

Offering tailored delivery options is one critical piece to running an ecommerce business. However, there are other operational traits that you will need to be successful with offering tailored delivery options. Namely, these other traits are a lightning-fast fulfillment operation, a proactive customer service, and reliable delivery services. For more discussion on these critical ecommerce operations traits, see my article, The Best Ecommerce Operations Traits You Need To Have: Fast, Proactive, Reliable, Tailored, Data-Driven.

2. Matching Ecommerce Delivery Speed To Your Customer Types.

Next, you need to understand your customer types based on their preferred delivery options. Specifically, delivery preferences are influenced by factors such as urgency, convenience, and product type. For instance, customers purchasing last-minute gifts or essential items may require faster delivery compared to those buying non-urgent or luxury products.

By understanding the needs of your customer base, you can better tailor your ecommerce delivery speed options to suit their preferences. This will ultimately lead to higher levels of customer satisfaction and help differentiate your business in a crowded market. Also, your analysis will help you to find ways to curtail unneeded costs and where to pass the delivery costs on to specific customer segments. Below are examples of customer types based on their preferred delivery option.

Ecommerce Customer Delivery Types

a. One-to-Two-Day Free Customers.

These customers prioritize free shipping and are willing to wait a day or two to receive their orders. For example, customers ordering non-urgent items such as clothing, books, or home decor.

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b. Same-Day Customers.

These customers need their orders delivered on the same day they place them, often for urgent or time-sensitive items. For example, customers ordering groceries, medical supplies, or last-minute gifts.

c. Curbside Pickup Customers.

These customers prefer to pick up their orders at the store or designated pickup location instead of having them delivered. For example, customers ordering groceries, bulky items like furniture or appliances, or items that they want to inspect before taking home.

d. Economy 3-7 Day Customers.

These customers prioritize free shipping options and are willing to wait longer for their orders to arrive. For example, customers ordering non-urgent items such as office supplies, pet food, or household cleaning products. Another example are customers that are looking for extreme discounts on clothing and more from discounters such as Temu.

e. Expedited Customers – Faster Than Economy.

These customers are willing to pay extra for faster shipping options than economy, but not necessarily overnight or same-day delivery shipping rates. For example, customers who order time-sensitive items such as concert tickets, party supplies, or medical supplies would be interested in expedited shipping and would pay for it.

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f. Overnight Customers.

These customers need their orders delivered early by the next day, often for urgent or time-sensitive items. For example, customers ordering time-sensitive items such as medication, perishable goods, or important documents.

g. International Customers.

These customers require shipping options that can deliver their orders across borders that may have specific customs requirements. For example, customers ordering products from overseas, such as specialty foods, unique clothing items, or rare collectibles.

f. Eco-Friendly Customers.

These customers prioritize environmentally-friendly shipping options, such as carbon-neutral delivery or reusable packaging. For example, you may have a large customer segment who will only use carbon-neutral delivery services. Thus, they will pay extra for this type of delivery service.

g. Freight Appointment Ecommerce Customers.

These customers require delivery appointments for larger or heavier items that require special handling. For example, customers ordering large appliances like refrigerators or washing machines that require special handling and delivery. Additionally, many customers will pay for a “white gloves” in-house delivery versus curbside delivery. Also, see my article, Large Package Shipping Mistakes And How To Ship More Cheaply for more insights on shipping large packages.

Large Package Shipping Mistakes And How To Ship More Cheaply

For more on types of ecommerce shipping and package delivery costs, see ShipBob’s Ecommerce Shipping Guide and my article, Package Delivery – See How To Stop Surging Costs And Make Your Customers Happy.

3. A Five-Step Market Segment Approach To Optimize Your Ecommerce Delivery Speed Options.

If you haven’t yet, it’s crucial to perform a market segment analysis to identify the ideal combination of shipping options for your customers. This vital task ensures your ecommerce business thrives. In fact, this process is no different from any other market segmentation analysis you’d conduct for your products or services. Undoubtedly, being familiar with essential customer demographics such as age groups, locations, or income levels is key. That way, you can better comprehend their distinct preferences when it comes to delivery speed and convenience aspects.

So how do you go about figuring out how to provide the right mix of delivery options to meet your customers’ needs? One way is to do a market segment analysis. For example, below is a five-step approach that can help you to analyze your customer types when it comes to delivery options.

How to Make Your Shipping Options More Competitive: A 5-Step Market Segment Approach for Businesses

Shipping Options Strategy – a Five-Step Market Segment Approach

1. Align Your Shipping Options With Your Business Goals.
2. Gather Customer Delivery Experience Data.
3. Identify Key User Segments For Each Shipping Option.
4. Prioritize User Segments And Associated Shipping Options.
5. Develop Tailored Shipping Options Strategy And Implement.

For more details on this 5-step market segment approach, see my article, Offer Shipping Options That Will Make Your Business More Competitive: A 5-Step Market Segment Approach.

4. Monitoring Customer Satisfaction and Feedback For Ecommerce Delivery Speed Options.

In order to ensure your chosen ecommerce delivery speed options continue to delight customers, it’s crucial to monitor their satisfaction levels closely. For instance, you can solicit feedback through post-purchase surveys or reviews to gauge overall satisfaction with the entire order process. It’s also important to keep an eye on any emerging trends in customer complaints or praise related specifically to delivery speed options. By staying proactive in monitoring customer satisfaction, you can adjust your delivery offerings as needed and maintain a loyal, happy customer base.

References.

For more references on delivery speed options, see Mckinsey’s Retail’s need for speed: Unlocking value in omnichannel delivery and ShipBob’s Ecommerce Shipping Guide. Also, for more information on optimizing delivery costs, see SC Tech Insights’ Package Delivery – See How To Stop Surging Costs And Make Your Customers Happy.

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Need help with an innovative solution to make your supply chain analytics actionable? I’m Randy McClure, and I’ve spent many years solving data analytics and visibility problems. As a supply chain tech advisor, I’ve implemented hundreds of successful projects across all transportation modes, working with the data of thousands of shippers, carriers, and 3rd party logistics (3PL) providers. I specialize in launching new analytics-based strategies, proof-of-concepts and operational pilot projects using emerging technologies and methodologies. If you’re ready to supercharge your analytics or if you are a solution provider, let’s talk. To reach me, click here to access my contact form or you can find me on LinkedIn.

For more from SC Tech Insights, see the latest articles on these topics: Ecommerce, Shipping, and Customer Experience.