In a bid to gain and maintain a competitive advantage online retailers have recently been expanding the delivery options they offer clients, as the latest Snow Valley Online Retail Delivery Report highlights. It found that 69% of e-retailers offer at least two delivery options (usually standard and next day delivery), up from 54% in 2005.
Paul Galpin, managing director, P2P Mailing
Anecdotal evidence from within the e-commerce logistic industry, however, indicates that special delivery options are far less popular and significant to consumers than online retailers presume.
In order to investigate this, a sample of 2,000 UK consumers, representative by gender, region and age, was polled during June 2011 and revealed that, indeed, premium delivery services are much less popular than online retailers presume.
When ordering items for themselves, the vast majority of UK consumers would choose standard delivery. More than four-fifths of consumers (over 86%) would select standard delivery when ordering items for themselves.
The survey also uncovered some interesting gender differences; women are generally more likely to select standard delivery and particularly so when purchasing non-electronic goods for themselves, with the proportion of female consumers selecting this method never falling below 89%, compared to 82% of men.
Men (82%) are less likely than women (91%) to select standard delivery option for games, DVDs and music and books -90% of men compared to 95% of women. Both sexes were equally likely to choose special delivery (9%) for items of clothing.
Electronic goods represent an exception. These are generally higher value, more fragile items and the choice of delivery method reflects this. When it comes to the purchase of electronic goods, in fact, preference for standard delivery drops to 65%. In particular, fully 18% of UK shoppers would choose next day delivery for electronic goods and 15% prefer to use a track & trace facility for these items.
The survey identified that value of item ordered is the most significant factor in determining consumer choice of shipping. A value above £50 appears to significantly influence consumers to select special delivery.
In fact, 91% of consumers would select standard delivery for orders under £50, but only 58% would do so for orders above £50 and 35% for orders over £200. In addition, for orders over £100, the survey revealed an increase in the selection of track & trace, which rises from 13% for orders under the £100 threshold, to 30% for orders above it.
For items over this value, standard delivery finally becomes a minority option with only 40% of consumers selecting standard delivery for items worth between £100-£199, 23% selecting next day delivery and 30% choosing track and trace.
Online retailers have been operating and devising their strategies under the false assumption that consumers require and prefer next day delivery. In fact, standard delivery is the preferred delivery option by far. Although exceptions to the norm do exist, they represent a minority.
By understanding that premium shipping is linked to item value, e-commerce retailers can hone in to more tailored strategies to offer delivery options that suit their client base and their preferences.
Only by partnering with an expert that is able to match items sold and customer profile with cost-effective shipping options can online retailers avoid hampering their business processes with complex and ineffective delivery options and provide customers with the service that they really need.
