Fastest? Cheapest? Most convenient? Research reveals what consumers really want from their last mile delivery experience.
In Power Retail’s latest Spotlight Series report, ‘Last Mile Delivery – A Race Against Time’, the company’s data and insights team reveals a disconnect between what retailers think consumers want, and what shoppers actually want.
According to Grant Arnott, the managing director of Power Retail, retailers have been falling into the trap of believing delivery speed is the most important consideration in the fulfilment process.
“There has been a massive land grab over the last five years for retailers to be the fastest at getting products into consumers’ hands, but at what cost to the bottom line?” he says.
Instead of getting caught up in the ‘fastest is best’ mantra, Arnott says retailers need to find the “sweet spot” between meeting delivery expectations and maintaining profitability. “Speed matters, but it’s now what you think”, he says.
In fact, Australian shoppers reportedly view three to six days as the typical delivery time offered by online retailers but believe some form of compensation should be offered if an order is delivered late. More than half of the shoppers surveyed believe this compensation should be a refund of shipping costs. The research also revealed that the majority of Aussie online shoppers like to have “convenient, free or very-low-cost” parcel lockers as an option for their delivery.
Additionally, 30 percent of retail respondents said that optimising their delivery process is a top priority, with new technology like drones emerging as a “serious” option. In fact, the local e-commerce sector is reportedly showing interest in using drone delivery to target young shoppers and for fulfiling low-value orders.
“Our data shows that retailers who have invested heavily in superspeed delivery at the expense of profits may not reap the benefits they desire. Honouring the delivery promise is more important to consumers than all-out speed, so investing in reliable, sustainable and efficient last mile delivery is more effective than joining the space race to offer the fastest delivery option possible,” Arnott says.
Rob Hango-Zada, the CEO of Shippit agrees with these findings, claiming that, in most situations, consumers are more interested in retailers delivering on their promises than they are in instant gratification.
“When it comes to what customers are willing to pay for, we see customers moving beyond the instant gratification route and more towards a preference of predictability and reliability.”
The third instalment in Power Retail’s Spotlight Series, ‘Last Mile Delivery: A Race Against Time’ is out now, and contains more valuable insights into last mile delivery expectations in Australia. Click here to find out more!