The world of eCommerce deliveries is evolving, as customers increasingly seek a diverse array of delivery speed possibilities. However, many shippers are choosing to keep things straightforward. For example, a study by ShipBob reveals 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 this “one-size-fits-all” approach truly the best route, or is there a more optimal solution? In this article, I’ll dive into this question and others such as: Is it beneficial to present a complete spectrum of delivery options like same-day shipping or economy shipping? What strategies are competitors employing? How can an eCommerce business maximize their delivery choices while maintaining profitability? And finally, how can tailored delivery options help expand your customer base? Let’s get started by answering these questions. Also, I’ll detail a 5-step approach using market segmentation that you can use to optimize your eCommerce delivery options tailored to your customer base.
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 prerequisties for you to provide competitive, cost-effective options.
1. Current eCommerce Delivery Landscape.
Until recently Amazon set the eCommerce delivery standard of 2-day free shipping. However, 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 Wal-mart, 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 and 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
2. Must Have Traits To Offer A Better Customer Delivery Experience.
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.
The Best eCommerce Operations Traits You Need To Have: Fast, Proactive, Reliable, Tailored, Data-Driven. Thriving in the eCommerce world is no easy feat! With customers demanding rapid results and eCommerce companies constantly innovating to meet these expectations, your eCommerce business must be razor-sharp in refining and growing its service offerings. So to keep your customers coming back for more, there are essential traits your eCommerce operations should strive to embody.
Click here to get a clear understanding of these 4 crucial eCommerce operational traits. Specifically, these traits include having lightning-fast fulfillment processes, a proactive customer service approach, reliable delivery services, tailored customer delivery options, and data-driven operational processes. Indeed, harnessing these vital characteristics is the key to unlocking success for your eCommerce operations.
Matching eCommerce Delivery Speed To Your Customer Types.
So the next step is to get an understanding of what are your customer types and their preferred delivery options. Specifically, your customer’s delivery preferences are driven by many factors such as urgency, convenience, and product type. For example, customers purchasing last-minute gifts or essential items may require faster delivery than 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 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 and why they prefer a particular delivery option.
eCommerce Customer Delivery Types
a. 2-Day Free Customers.
These customers prioritize free shipping and are willing to wait a couple of days to receive their orders. For example, customers ordering non-urgent items such as clothing, books, or home decor.
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 low-cost 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.
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.
f. Overnight Customers.
These customers need their orders delivered 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 and 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 target customers who will only use a carbon-neutral delivery services. Thus, they will pay extra for this type of delivery service.
g. Freight Appointment 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 SC Tech Insights’ Large Package Shipping Mistakes And How To Ship More Cheaply for more insights on shipping large packages.
For more on types of eCommerce shipping and package delivery costs, see ShipBob’s Ecommerce Shipping Guide and SC Tech Insights’ Package Delivery – See How To Stop Surging Costs And Make Your Customers Happy.
A 5-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? Well, see my article, Offer Shipping Options That Will Make Your Business More Competitive: A 5-Step Market Segment Approach. This 5-step approach will help you to analyze your customer types and start offering the best delivery and curbside pickup options for your customers.
Are you still only offering one type of eCommerce shipping, like 2-day free shipping? If so, it’s time for a change! Chances are, you’re losing customers and running an inefficient shipping operation. So, what’s the best way to provide a perfect blend of shipping options that cater to your customers’ needs and make a profit? Don’t worry, click here, I’ll guide you through a 5-step approach to analyze your customer demographics and start delivering the most suitable delivery and curbside pickup options they’ll love.
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. 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.
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.
Greetings! As an independent supply chain tech expert with 30+ years of hands-on experience, I take great pleasure in providing actionable insights to logistics leaders. My background includes implementing 100s of innovative solutions using emerging technologies and a data-centric development approach. I have also provided business intelligence (BI) solutions for 1,000s of shippers. For more about me, click here.