Pairing Speedy Delivery With Low Cost

Posted by in Retail


No one can dispute that the way people shop is changing, and fast. A survey of 500 retail shoppers found that 73 percent do half of their shopping online. Sixty-six percent prefer shopping online to in-store, and two out of three shop online because it’s cheaper. This shift is forcing some brick-and-mortar stores to shrink or disappear altogether. 

 

With so many people switching to online shopping, another industry is taking off to move all that merchandise. Shipping, logistics and overnight delivery services such as UPS, FedEx and some of the newer players, such as Shutl, are stepping up to get merchandise to shoppers—fast. 

 

Retail professionals, and those that are considering a career in Retail Management, need to be aware of this new trend. A Time Magazine article, “Online Shoppers: Meh, Same-Day Shipping Isn’t That Big of a Deal,” contradicts the notion that online shoppers want fast delivery. Well, they do, but may not be willing to pay for it.

 

The heavy hitters in online retail like Amazon.com, eBay.com and traditional retailers like Wal-Mart and K-Mart already offer speedy or same-day delivery—for a price. Google is getting into the game, rolling out a same-day shipping service they call Google Shopping Express.

 

Customers expect the option for next-day delivery. Same-day shipping may be an option online retailers can’t afford to ignore. The buying public wants what they want, and they want it NOW! The instant gratification of fast internet, Twitter feeds and texting has make consumers used to getting what they want, and fast. But all this fast service comes at a cost.

 

As the article points out, online retailers must factor in shipping costs to the overall cost of goods or services. How much the consumer can bear is an important question. With 73 percent of shoppers online, they can click their way through hundreds of websites looking for a product at the best price and cheapest shipping charges.

 

 Amazon.com may know something the others don’t. While they offer a variety of speed-up delivery options, they also offer free delivery for orders over $25. It’s not overnight, but for those that can afford to wait a day or two, free is better. Since most packages travel over FedEx or UPS, the wait times for “standard” delivery” can be a lot shorter than posted. Even the U.S. Postal Service is stepping up its game, offering standard shipping costs for certain size packaging.

 

Retail profits have always been about costs vs. revenue. Next-day or same-day shipping may please the customer but can take a bite out of profits. The bite may prove fatal if costs outweigh the benefits. Is this really what the customer wants? They may not want to wait on an Internet connection or Twitter feed, but getting a book or pair of shoes that they ordered online? 

 

Every business is different. Customers have different needs and preferences. The best way to find out if same-day delivery service is important to your customers is to ask them. Not rocket science, but a relatively easy and cost-effective way to judge the need for a service before spending a lot of money for something that, to your customer, isn’t really important.

 

Photo Source: Maggie Smith / Freedigitalphotos.net

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