Footwear firms do a better job meeting direct customer needs than apparel retailers on two fronts — average delivery time and lower average free shipping threshold — but even shoe companies can show improvement.
That’s the conclusion from AlixPartners, which surveyed 1,016 direct customers to see how retailers by segment are competing with Amazon. The four segments are footwear, special apparel retailers, department stores and off-pricers.
The consulting firm found that the maximum acceptable delivery time fell 13 percent since 2012 to 4.8 days. And at 5.6 business days, footwear firms are still below the mark. It also found that free or low-cost shipping isn’t an automatic guarantee of increased revenue or profits. Yet offering free shipping as part of loyalty rewards programs could help increase customer engagement, as well as with the collection of customer data for targeted communications.
Of the 10 firms evaluated in the footwear segment, the average delivery commitment was 5.6 business days, with the free shipping minimum on orders starting at $24.99. The range of standard ground charges began at $4.95 and climbed as high as $13.98. The survey found that two of the footwear retailers evaluated also bundled free shipping as a key reward in their loyalty programs, which included both standard and premier levels.
In specialty apparel, the average delivery commitment for the 11 companies surveyed was six business days, with the range of free shipping minimums on orders that began at $40. The standard ground charge began at $4.95 up through $7. AlixPartners said the shortest delivery commitment was three days, while the longest was eight days. While specialty retailers are continuing to ramp up their e-commerce offerings, they are also slowly adapting to the channel, AlixPartners concluded.
The department store channel — nine were evaluated — wasn’t that different from their specialty retail counterpart: long average delivery time of six business days and a slightly higher minimum starting order for free shipping at $49. The standard ground charge began at $6.25.
Other “tricks” gave department stores a slight edge, the consulting firm concluded. According to AlixPartners, “Many are using their physical locations to try to create a better customer experience for online shoppers.” Those “tricks” include buy-online pick-up in store; reserve online, try on in store, and the newer curbside pick-up option. The consulting firm said these options can “minimize both the time it takes for customers to receive online orders, and the amount of inventory returned from online shopping.” While AlixPartners said customers don’t widely use these options now, it might be a way to bridge the gap between online and retail shopping or drive customers in-store so retailers have the opportunity to sell them additional products.
For the off-price channel, the average delivery time for the six surveyed was 5.9 days, while the free shipping minimum began on orders that were at least $49. The standard ground charge began at $5.75. AlixPartners said the off-price retailers didn’t appear to be moving aggressively toward Amazon’s two-day free-shipping plan, but that likely wasn’t a liability since the channel relies heavily on in-store sales and the in-person bargain hunting experience. That also makes e-commerce revenue typically a low percentage of overall sales.
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