Amazon

Retailers Struggle To Keep Pace With Amazon’s On-Demand Delivery Culture

For sled dogs and retailers alike, if they’re not the lead dog in the pack, the view never changes. This is doubly true in an industry largely influenced, in more ways than one, by whichever R&D path a company the size of Amazon chooses to follow.

Now, several years and however many months into Amazon’s ambitious experiments with on-demand delivery options, it’s finally become apparent that the retailer has transformed consumer preferences, and smaller brands are struggling to keep up.

The findings come from Deloitte’s 2015 holiday shopping survey that looked at customers’ opinions on what constitutes “fast” deliveries in today’s retail environment. While many brands still offer ground shipping that reaches most destinations in five or more business days, the study found that 90 percent of consumers expected to receive express deliveries no later than two days after purchasing. After that, approval falls off dramatically — only 63 percent called three- to four-day shipping “fast,” while that number dropped to just 13 percent for five- to seven-day estimates.

That customers have come to expect two-day shipping is no surprise. Ever since Amazon made 48-hour deliveries standard for Prime members, a massive swath of customers got to experience, for the first time, what it was like to click a button and have products show up at their doors a few dozen hours later. Even Heather Kaminetsky, vice president of global marketing at NET-A-PORTER, can’t help but agree that Amazon set the bar that all other retailers are now just barely trying to hoist themselves over.

“Amazon kind of set the path for everyone with Prime,” Kaminetsky told The Wall Street Journal. “People just expect things faster.”

While Jeff Bezos’ eCommerce leviathan has undoubtedly set a new precedent for speed with online deliveries, it’s also affected what shoppers are willing to pay for even faster shipping. According to Deloitte, the average shopper won’t pay a penny more than $5.10 for same-day delivery, and 25 percent have already reached the point where they expect these services free of charge — a serious customer satisfaction issue for small online merchants already struggling with the financial rigors of eCommerce orders.

Even though smaller brands don’t have the wiggle room to offer Amazon-like shipping speeds at Amazon-like prices, they still recognize the need to offer the option of expedited deliveries at any cost. Kaminetsky told WSJ about NET-A-PORTER’s new fleet of delivery vans spread across London, Hong Kong and New York City. While customers have to pay $25 for one of these vans to ferry their purchases to their doorsteps within the day, NET-A-PORTER’s high-end clientele may be more willing than the average consumer to shell out a few extra bucks on top of a several hundred dollar order.

As more and more brands find themselves pushed into the same- and two-day delivery game by consumer expectations, they’ll have to balance the dangers of taking too long with the inconvenience of arriving too early. Phil Granof, CMO at NewStore, told Multichannel Merchant that the recent craze around express delivery doesn’t necessarily mean that when customers choose expedited shipping, they want their items then and there.

“It’s really not about ‘I want it fast,’ but ‘I want it as quick as it can come, when I need it to come,’” Granof said. “It’s [the customer’s window] that matters, not the first 120 minutes.”

An order arriving late can be as much of an inconvenience as it arriving in the middle of a work meeting or before they leave for the night, Granof explained, and it’s going to become each retailer’s responsibility to avoid burdening their customers with improperly timed deliveries.

Just as likely, though, Amazon will figure out some way to tailor shipping windows, and all other brands will have to adjust just to keep pace.

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