What Consumers Really Want When it Comes to Shipping

As e-commerce supersedes the traditional methods of shopping, a business might anticipate that consumers will have little patience for the shipping process. After all, they are supplanting their instant supply-and-demand system for that of a more convenient method—think perusing an aisle versus shopping a website.

If consumers aren’t picking up products from a shelf, how much patience will they have to wait for them to ship? The answer is: more so than you might think. Understanding these time frames, and what can motivate people to be patient, is a loophole that many businesses have yet to exploit (particularly during the holiday season).

What may be a contributing factor is that companies simply don’t realize what consumers really want and what they are willing to put up with in terms of shipping.

Differing Timeframes

A recent study by consulting firm A.T. Kearney asked North American internet users how long an acceptable timeframe was to wait for their e-commerce orders to ship. The results were surprising.

For a non-urgent product ordered online, 25 percent of people surveyed stated three days was an acceptable timeframe. Further, 9 percent said four days was all right, and 16 percent were OK with five days.

Unlike previous years, same-day shipping didn’t hold as much clout in 2015. It is indisputable, however, that free shipping will always remain the prime choice for consumers. Whether that cost is redistributed in other aspects of the business is entirely up to the practices of an organization.

The only difference truly demonstrated in the study was intergenerational. Younger generations (like millennials) tend to prefer the fastest shipping possible. Cost is rarely a factor, and they treat e-commerce as if they were surveying the shelf at a local store. Amazon has taken advantage of their millennial consumer market by offering two-day delivery through Amazon Prime to ensure products are delivered in a timely fashion, regardless of price.

Generally speaking, Amazon makes two-day shipping one of their main marketing tactics—but even they have found that most consumers are willing to sway on the timeframe when cost becomes a factor in the transaction.

Factors Contributing to Variance

There is no question that the price of shipping far outweighs the importance of speed for all consumers—regardless of age. A recent survey by UPS found that 74 percent of shoppers valued delivery cost over timing, whereas only 26 percent valued timing first. This implies that although consumers really want their products as soon as possible, they’re willing to wait a little to save some money.

Pricing can be a good angle for a small business to work when they have shipping challenges. Many companies offer a tiered shipping program, where customers can buy up to a certain amount of products for a decrease in shipping rates. Not only does this incentivize people to consume, but it also saves an organization shipping costs in the long run (as people are buying more product).

Although big retailers like Amazon are increasing consumer expectations on shipping, people still understand that when a product is mailed, it takes time.

Your Market Sector

The first step to understanding what shipping method is best suited for your customers is knowing your demographics. The following are a few factors that have been known to contribute to the variance in shipping costs across e-commerce companies:

• Age of consumer
• Location (national versus international)
• Product size
• Weight
• Amount
• Shipping discounts/incentives
• Season (holiday?)

When trying to determine what shipping mix is the best fit for your organization, consider the various factors of your demographics first.

Understanding what consumers really want when it comes to shipping can be a challenging process. There are a variety of aspects that can contribute to a person’s expectations when requesting to ship your product. A.T. Kearney’s research has shown that people are willing to wait longer when you offer the right price.

Running an effective e-commerce business involves knowing what your customer wants, and the actual timeframe expected for you to deliver. Once this is understood, you should have no problem streamlining the e-commerce segment of your business, and all of the shipping processes involved.

About Endicia

Endicia is a leading provider of internet-based postage services that make it easier and more affordable to ship parcels through the U.S. Postal Service®. We know that shipping can be complex and our goal is to simplify your shipping operations so you can focus on doing what you do best. Visit us at www.endicia.com to learn more.