Is flexible delivery good for business?
"With an increasing amount of online stores popping up and the open market allowing to ship items from across the world, each year more and more transactions are being made. In order to keep up with this new consumer behavior, businesses not only need to make sure they keep attracting new customers, but also find a way to keep their already existing customers loyal."
To do that, it isn’t sufficient anymore to just provide high-quality products. Today, it’s all about customer experience and consistency. Customer experience overarches all the interactions in the course of the relationship between a customer and the business. This includes customer service, user experience, pricing, and finally shipping and logistics.
Merchants are finally realizing the importance and the potential of the last one – home delivery on the overall experience. After all, it’s the most expensive part of the logistics process and the most stressful part of online shopping for both shoppers and retailers. Retailers have to rely on carriers to provide a satisfying service in line with their brand, whereas shoppers need to trust the carrier to deliver the items they’ve already paid for.
Merchants often oversimplify the idea of the delivery experience and equate it to speed only. In fact, the speed remains just a piece of the puzzle. Customers expect transparency and unique, customized experience throughout the process. Once a customer needs to inquire about the status of the delivery – the brand can be sure that something went wrong. Keeping the customer up to date proactively is a standard today.
Consumers also expect convenience. The extent of this shift can be observed in studies concerning consumer behavior and putting more advanced shipping options well about the stock offered by a retailer. Allowing the consumer to pick their own delivery time will soon become the norm, despite the fact that shoppers will have to pay for this convenience. Parcel pick-up lockers and in-store pick-ups are becoming increasingly popular for one reason – it gives the consumer the freedom to choose when the parcels will be picked up.
This is becoming increasingly important for working consumers, who can’t afford to spend a day at home waiting for the delivery man anymore. 55% of consumers say that a two-hour delivery option would increase their loyalty, yet only 19% of firms offer two-hour or faster delivery.
Similarly, omnichannel experience is now the reality in retail. With the ever-increasing use of digital devices, consumers are able to and actively shop in multiple ways, whenever they please. The physical store needs to be re-imagined in order to cater to the new behavior patterns of consumers.
What’s especially interesting about this shift in consumer preference towards convenience is the willingness to pay for this luxury. This, considering that in the past years the e-commerce industry players had to adapt to the demand for free-shipping options in order to gain the interest of shoppers.
One company which has benefitted from the free shipping option for years but decided to drastically change their strategy is Zalando. In November 2018, Zalando has introduced a shipping fee for items under a certain value to its first customers, in Italy. This tactic has proven not to discourage shoppers, which resulted in Zalando implementing the new shipping fees in other countries such as the UK, Ireland, and Spain at the beginning of this year.
In the UK, shoppers are now required to pay a fee of around 3 euros for orders cheaper than 24.90. Zalando was one of the first retailers to introduce free shipping and the fact that it’s changing the rules of the game again means it’s just a matter of time before other companies will follow their lead. The free shipping option will only be granted to a group of subscribers, thus in the near future, we may see a sudden rise in e-commerce subscriptions.