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October 13, 2016

Faster and Cheaper: Consumer Behavior Shows that Carrier Prices Matter

Just how often do your customers want same-day delivery? And would they pay for it? The answers seem to be yes and yes…although not to the degree you might first think.

These answers come from an eMarketer report on the study “How Fast Delivery and Quality Packaging Drives [sic] Customer Loyalty,” by Dotcom Distribution. Some of the main findings of that study include the fact that two-thirds of online shoppers surveyed said they would pay for super-fast delivery if they had a reason for it (for example, they needed a gift for someone’s birthday).

But: Nearly 80% of those respondents said they would expect to pay less than $10 to get their items in just a single day. One-third said they would pay no more than $5 for same-day delivery.

Both the article and the study are worth reading. For our part, there are three good takeaways from this data:

  • Keeping shipping costs down is going to be an important part of both sales and customer service. (The days of recovering profits through pricing when it comes to shipping and handling are over.)
  • Being able to find the right carrier and shop rates will be a competitive advantage.
  • Other customer service options, like the ability to track orders and offer two-day shipping, will be just as important as value-adds.

In other words, consumers are open to same-day and overnight delivery if needed. But they are not going to pay much for it. Add in the expectation of free shipping, and you have a recipe for disappearing margins. Efficiency in shipping might be the only way to combat this.

If you'd like to find out more about optimizing your warehouse operations and how a warehouse management software could potentially help you optimize  and improve accuracy and efficiency of your warehosue, feel free to reach out.

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