In ecommerce, we’ve grown used to hearing all about the importance of fast and free shipping.
Consumers, we’re told, expect orders to be on their doorstep faster than ever as the ‘Amazon effect’ sets the standard for speedy delivery. Not only that – they also expect to receive it for free.
But there’s a big difference between the ecommerce behemoths and independent retailers with relatively small order volumes. For the latter, offering the so-called ‘double F’ of shipping simply isn’t possible without becoming unprofitable.
So if it’s a matter of choosing between free OR fast shipping, which is a better value proposition for consumers?
That’s exactly what we’re going to explore in this post, so read on!
To know whether free shipping or fast shipping is the better offering, we need to ask one key question: What do consumers want?
Pre-pandemic, it was clear that speed was becoming a bigger differentiating factor for brands. A 2019 study found that just over half of consumers said a two-day delivery option would make them more likely to choose that retailer, with a further 39% saying the next-day delivery would entice them to purchase.
Yet Shopify’s recent State of Ecommerce 2021 study shows a shift; 59% of consumers now say that free shipping is the key to a positive online shopping experience, while fast delivery comes in behind at 40%.
With consumers migrating to ecommerce in huge numbers due to the COVID-19 pandemic – including many who’ve never shopped online before – it’s hardly surprising that we’ve seen a shift in what customers are prioritizing.
Online shoppers have been forced to adjust to longer delivery timeframes due to strained carrier networks, and signs show this has changed expectations; 45% of consumers are accepting longer delivery times than they did in the past. When rapid delivery can no longer be guaranteed, it’s logical that consumers are more likely to choose affordability over speed.
But what will this mean for when the retail landscape returns to normal? Will the desire for fast shipping pick up again, or will the ongoing economic difficulties cause consumers to choose more cost-effective delivery options?
While we don’t have a crystal ball on hand, there are other interesting shipping and delivery trends at work that help to shed light on how customer expectations will evolve this year:
As the pandemic caused stores to shut their doors during the first and second quarters of 2020, retailers were forced to pivot to keep serving their customers. Physical store locations were transformed from places to browse and buy into strategic pick-up points for online orders. BOPIS (Buy Online, Pick-Up In-Store) saw a 554% increase in May 2020, with stores such as Dick’s Sporting Goods seeing 75% of its online orders still being fulfilled by stores by Q3.
BOPIS and curbside pick-up have found widespread appeal because they give consumers the best of both worlds. It’s much faster than conventional home delivery – and also comes at no extra cost.
As O2O retail strategies like these mature into permanent offerings, we can expect it to have a profound effect on how consumers perceive delivery speed.
BOPIS is the closest that consumers can get to instant gratification in ecommerce without the often steep costs associated with same-day delivery services. As they grow more accustomed to this alternative offering, we’re likely to see a moderation of same-day delivery demands.
Shipping isn’t just a matter of speed or price; increasing evidence shows that it’s the end-to-end post-purchase experience that dictates how customers feel towards a brand. A study by Royal Mail found that 54% of customers expect regular updates during transit – and for mention of this made at the point of purchase.
Even when delivery occurs on time, an absence of good customer care following a purchase can create friction. This is especially critical for retailers who do offer cheaper, slower delivery speeds, as the sizeable lag between purchasing and delivery can breed serious delivery anxiety.
Ultimately, consumers want to feel valued by the brands they support. Missing out of such a valuable opportunity to build a rapport with your customers can shape how customers view their delivery experience – as lacking care and transparency.
So, no matter whether retailers prioritize speed or cost, post-purchase customer service should be a major consideration if you want customers to view their delivery experience positively.
One of the biggest problems with the fast vs. free shipping argument is that some purchases are more time-sensitive than others. We might be happy to wait for a week or more for a big-ticket item like outdoor furniture – but not for gifts during the holiday season.
This is why trying to offer a one-size-fits-all shipping option is unlikely in work in a retailer’s favor. While some customers will be happy with free economy shipping, others will likely be frustrated if a speedier service isn’t available. As the old saying goes, you can’t please everyone.
As online shopping has grown, consumers have been showing a preference not simply for faster or cheaper shipping – but for the ability to make a choice. ShipStation’s 2020 study noted that while 60% of consumers said that slower delivery speeds should be free, 40% were happy to pay for express delivery.
In sum, deciding between free or fast shipping becomes a false economy when retailers can make the decision to offer both.
The question remains. Is offering free or fast shipping better for business?
The answer: It’s a pretty even mix.
While some of your customers will undoubtedly prefer free shipping, others will prioritize speed – even if it comes at an extra cost. Furthermore, the popularity of store-based pick-up options is a big indication that the flexibility to choose is what appeals to customers the most. When people are shopping online to meet all kinds of different needs, it’s only logical that they’ll want shipping options to match.
Moreover, focusing on this dichotomy of price versus speed ignores the other elements of the shipping experience that influence customer satisfaction. If consumers have little or no communication from a brand following a purchase, this affects the likelihood that they’ll want to shop with that brand again – no matter how fast or affordable the shipping was.
As shipping becomes a bigger battleground for customer loyalty, retailers need to widen their gaze outside of just logistics. Gap’s recent decision to organize delivery speeds by loyalty status to reward lucrative customers is a clear example of how shipping presents an opportunity to surprise and delight consumers in innovative ways.
Now that you have your answer, it’s time to go full stream ahead in meeting customer expectations. Good luck!