Earlier this week, Amazon said it was speeding up same-day deliveries via “mini-fulfillment centers” that are located closer to their customers in markets that include Phoenix, Dallas and Orlando, among others. For Prime members, that means getting online orders within a few hours.
Authors of the report noted that consumers, “it seems, are still willing to wait up to a week, and some as long as it takes, so long as the delivery is free.”
“This means that free delivery, particularly for baskets above $30, is still more important to consumers than expedited delivery,” TrendSource said in a statement.
Sarah Rowlett, senior director of sales and marketing at TrendSource, said omnichannel retailers “do not need to go ‘all in’ to compete with one-day delivery but instead focus on developing infrastructure to ensure delivery is efficient and can be offered at little to no cost to the consumer.”
The firm’s report also examined other trends occurring in the market, include the evolution of social media into a “purchase pathway.” Researchers at the firm said in the report while Facebook remains the most popular social media platform, “people are far likelier to be driven to purchase through Instagram, particularly Millennial and Gen Z consumers.”
“These younger generations find influencer-produced content and user-generated content more authentic and inviting, however, than corporate-produced posts, signaling a potential changing of the guard in terms of marketing and direct-to-consumer (DTC) sales,” TrendSource noted.
Industry experts who reacted to the research report, were not surprised by the findings or by Amazon’s move to speed up delivery services. Erik Morton, senior vice president of product and strategy at CommerceHub, told WWD that with the delivery wars “far from over, Amazon is expanding its same-day delivery service to ensure customers can get what they want as soon as possible — and they’re spending a lot of money doing so.”
“Interestingly, as we saw in TrendSource’s 2020 Retail Industry Report, consumers today still gravitate toward free delivery options over expensive expedited delivery,” Morton said. “In fact, as long as the promised delivery date is accurate, customers don’t mind waiting a bit longer to receive their purchase. That’s why it’s imperative for retailers and brands to think beyond speedy delivery in order to offer consumers the most cost-effective customer experience possible.”
Morton cited Target and Walmart as examples of retailers that have “begun leveraging strategies like BOPIS and BORIS that still deliver convenience without the high cost of same-day shipping.”
“As the shipping wars continue to evolve, it’s crucial for retailers to understand the power of offering free delivery options that stay true to delivery promises, which ultimately boost brand loyalty just as much as speedy delivery,” he added.
For Asaf Hachmon, chief executive officer and cofounder of Bond, delivery speed and cost might be appealing, but tracking and transparency is essential to keeping customers satisfied. Hachmon told WWD that as traditional retailers “take a more aggressive approach in their fight against Amazon, it’s no surprise that the online giant is tapping into its footprint of mini-distribution centers to shorten delivery times.”
“But Amazon — and other brands who try to take this approach — must remember that real-time tracking and transparent communication with the customer throughout the delivery process is also a key component of the shopping experience that should not be ignored,” he explained. “They should also seize the opportunity to leverage these fulfillment centers to schedule and accept returns and exchanges faster and more efficiently. Returns are still a pain point in the post-purchase experience, and many customers don’t want to wait long periods for pickups. This latest move by Amazon is only the first of many steps toward truly fulfilling consumer needs.”