Race to Your Door: The Power of Shipping Speed in eCommerce and Falling out of Love with LoveNitin Sumangali |
When it comes to eCommerce, retailers are betting that consumers feel like Tom Petty—the waiting is the hardest part. A recent article in the Wall Street Journal (subscription required) details the efforts of some merchants and how they are trying to serve customers who have become used to the speed and convenience of Amazon Prime’s “free” two-day shipping.
Clothing retailers are especially active in this arms race: Net-a-Porter has 50 vans delivering same day shipping in New York City, London and Hong Kong, and Everlane offers one-hour shipping in San Francisco and Manhattan.
These retailers are investing in different ways to manage inventory and deliver product to consumers, because, as Heather Kaminetsky from Net-a-Porter tells the Journal, “Amazon kind of set the path for everyone with Prime. People just expect things faster.”
This raising of the bar suggests a purely competitive reason: Pick up the pace with shipping or be left in the dust. But Cole Haan’s Chief Marketing Officer is also quoted in the piece as saying, “When you go to a store, you have that wonderful delight of carrying the bag down the street. Online, after you click, you have to wait. And during that time you can fall out of love.” Cole Haan says their push into free two-day shipping has been good for the bottom line because faster delivery means fewer returns.
In eCommerce, the window between when you buy and when you have your items has always been a period of days, and consumers have simply had to accept it as the price for the convenience of online shopping. Efforts like Everlane’s one-hour shipping are essentially trying to erase one of the differences between online and offline shopping and trying to give that feeling of having the item much faster than others, and thereby reminding the customer of why they “fell in love” with their items.
Jet.com, an online marketplace and competitor to Amazon, is also planning experiments in giving consumers more information about shipping and letting them dial up or down the shipping speed in exchange for paying more. By making this price more transparent, consumers will see how shipping speed and costs vary for consumable items like paper towels vs. items like apparel which come in different sizes and colors and therefore have more complex inventory and distribution. Jet plans to show consumers a variety of prices for items, with lower prices for slower delivery. Amazon has also started doing something like this for Prime customers, offering them the chance to delay their product delivery in exchange for credits for Amazon digital music or movies.
These retailer experiments and innovations, partly driven by more data availability about things like inventory management and distribution, are in line with what MasterCard talks about in our Retail CMO’s Guide to the Omnishopper Report. Understanding how customers view the differences (and similarities) of online and offline retailers is key to understanding consumer pain points, especially as consumers look for ways to customize their shopping experience to their own preferences. Visit the website to view the report and download the key findings.