28 Jun UPS Pulse of the Online Shopper Study: Expectations Delivered
Each year UPS sponsors a customer experience study called “UPS Pulse of the Online ShopperTM”. This year’s study was released this June and, as always, has a number of interesting observations. One area that caught my attention, and should catch yours if you are an eCommerce company, relates to customers’ expectations regarding delivery.
Recent history shows that customers continue to raise the bar on free shipping expecting faster and faster delivery times. In the Deloitte 2016 Annual Holiday Survey, 64% of respondents indicated they would not pay anything extra for 2-day shipping and 38% said they would not pay extra for next day shipping. At the same time, the UPS study shows that 74% of shoppers believe free shipping is important but that is down from 81% that felt that way in 2014.
The UPS study indicated that customers were willing to pay a premium for premium service with 75% of shoppers saying they are willing to pay extra for expedited shipping. While this runs a bit counter to the widely understood trend, I think the explanation lies in the fact that a greater percentage of shopping is being done online. When looking at the underlying reasons why shoppers were willing to pay for expedited delivery, 37% said they needed it faster for personal reasons such as travel or an event; 36% would pay extra for a gift to arrive by a certain date; and 27% said they would pay extra if they waited until the last minute so there were no options. In the past, these time bound delivery constraints very likely would have resulted in shoppers visiting a brick and mortar retailer rather than risk a late delivery of an online order.
Online shoppers have expectations for the time it takes from placing the order to the delivery of the order. Yet the fulfillment process has key components that must be carefully managed to deliver on the customer expectation. The UPS study found that 64% of shoppers expect orders that are placed by 5 pm to qualify for next day delivery and 61% expected orders placed by noon to qualify for same day delivery. Clearly, this has huge implications for inventory placement, order cycle time and carrier selection — all of which must work in a coordinated fashion to deliver on this expectation.
Is your fulfillment operation meeting the customer expectations identified in the UPS Pulse study? Customers are willing to pay for premium fulfillment but it has to be consistently delivered. Do you have the information and metrics to gauge your current status and manage your progress? See how GrandCanals’ Fulfillment Intelligence Cloud can keep your customers coming back….Expectations Delivered.