It is generally accepted that customer demands are evolving when it comes to their shipping preferences. Ware2Go, the UPS-founded on-demand fulfillment network and integrated tech platform, says this is highlighted by the results of a new merchant survey it commissioned, focused on customers’ shipping preferences, as well as merchants’ fulfillment strategies to meet evolving customer demands.
According to merchants, customer behavior shows that faster shipping is more effective in driving conversions than discounts, with 65% of merchants reporting an increase in eCommerce cart conversions of up to 25% when they offer a one-to-two-day delivery promise. Merchants said that the most impactful tactics to drive cart conversions involved shipping promise:
- 56%, free shipping;
- 52%, 1-2-day shipping;
- 29%, free gift with purchase; and
- 26%, in-cart discount.
A significant majority of merchants (75%) believe that offering two-day shipping makes them more competitive, with 60% of those polled currently offering one-or-two-day shipping guarantees.
What’s more, fast shipping inspires customer loyalty, particularly during a time when 87% of consumers are shopping from home due to the global coronavirus pandemic.
- 71% of merchants find that customers are willing to pay extra for one-to-two-day shipping to receive their products sooner;
- 59% say that offering two-day shipping guarantees brought more repeat customers;
- 39% say it gets them better online reviews;
- 22% view fast shipping as a way to beat out their competitors.
The company states that these insights demonstrate that as customers do more shopping from home, the delivery experience becomes increasingly important and that businesses hoping to compete in the e-commerce space must build a fulfillment strategy to meet growing customer expectations.
“Meeting consumer expectations for fast shipping requires powerful behind-the-scenes operations, from supply chain to last-mile delivery,” commented Ware2Go CEO Steve Denton.
“Merchants who optimize those operations through strategic partnerships are poised for success in today’s e-commerce-driven, B2E economy. This research validates the need for the type of flexible and scalable infrastructure Ware2Go’s model affords its merchant partners.”
Operationally, the survey found that merchants do face several key challenges, most notably:
- Insufficient inventory management (33%);
- Incorrectly filled orders (31%);
- Slow delivery speeds (30%); and
- Lack of labor availability (30%).
Some 50% of merchants currently insource their warehousing and fulfillment and plan to continue doing so, while 32% say they both insource and outsource. Merchants do see positives associated with outsourced warehousing and fulfillment providers, characterizing outsourcing’s key benefit as reduced operational pain points, at 44%. Of those merchants who do insource, 21% say they recognize they should move their operations to an outsourced provider.
When it comes to barriers to adopting an outsourced warehousing and fulfillment provider, 34% of merchants cite difficulty finding vendors with the flexibility to meet their unique requirements. In this shifting economic landscape, many merchants have seen their customer base shift, requiring them to pivot to a new B2E model of business.
The survey was conducted in August 2020 by Propeller Insights on behalf of Ware2Go. It polled some 250 merchants operating both online and brick-and-mortar businesses, with revenues ranging from US$2m to US$200m.
