New research has revealed that Australian retailers are lagging behind their international counterparts, with only 15 percent of businesses offering same-day shipping, and 40 percent still not having an express shipping option.
According to the Pacific Consulting Group and Australia Post, Australian merchants could benefit from capitalising on pre-Christmas shopping events like Click Frenzy and Black Friday, while also expanding their shipping options to better meet consumer demands.
“Speed of shipping is a big driver for sales through e-commerce merchants,” Australia Post’s Chief Operating Officer, Bob Black said. “What this study shows is that more e-commerce merchants could be offering an express shipping option to their customers, especially as take-up during online shopping events such as Black Friday and Cyber Monday grows, and of course, through the peak Christmas shopping period,” he continued.
Presently, 55 percent of websites offer their customers more than one option in terms of shipping speed, while 50 percent offer free shipping when customers spend above a certain amount. The median price for shipping is reportedly $7.95 for standard and $10.99 for express. For the 15 percent of retailers that actually offer same-day shipping, the average price passed onto consumers is $14.90.
Christopher Kernahan, a senior partner at Pacific Consulting Group, and an author of the recent study into Australian shipping methods, also notes that a lot of retailers that think they’re offering express delivery, actually aren’t.
“We found large variations in the definition of ‘express’ shipping. Our surveys of customer sentiment shows that unless you are offering your customers one to two-day shipping, it doesn’t count as ‘express’.”
While standard shipping is still the most common delivery method, Black believes that as consumer demands continue to rise, the industry will be forced to make express shipping the standard delivery method.
“What we currently call ‘express’ shipping will become the standard for e-commerce over the next five years, and merchants who don’t offer an express option to their customers face the risk of being left behind.”
Over the last 12-months, there has been a lot of conversation around order fulfilment in the online retail industry, with brands like The ICONIC going so far as to trial one-hour delivery services.
For, instance, Dean Salakas, Co-CEO of The Party People, believes customer choice should be the main focus when it comes to order fulfilment.
“I’m all for customer choice, rather than worrying too much about complexity – give them as much choice as possible.
“We already offer quite a few delivery services, with regular, same-day and express all in the mix”, he said, “but other shipping services add value… there’s a huge market for a one-hour delivery window”.
Ben Hare, the chief operating officer at Tinyme echoes this sentiment, claiming super fast delivery options like one-hour shipping will likely become an option in the future, but what customers really want is more than one option, so they can select the delivery method that best suits their needs.
“The key is offering customers multiple shipping options that suit their circumstances,” he said.
To better meet the demands of both consumers and merchants as they evolve their fulfilment options to suit the changing e-commerce eco-system, Australia Post says it is investing a further $300 million into its delivery network to cater for the nearly 20 percent surge in online shopping demands in the last 12-months.
“The $300 million we will invest this year in our network will improve our processing capacity, capability and customer tracking. The bulk of this investment has been targeted at our major Express Post processing facilities in New South Wales, Victoria, and Queensland, where we’ve added new automated processing machinery to improve the speed, service, security and tracking of our Express Post service,” Black said.