Although high customer adoption isn’t there yet, retailers must invest in same day shipping now.
During an insightful meeting with Stella Service, a startup that rates online retailers’ customer service performance, I was shocked when Kevon Hills, Stella Service’s VP of research, said this: “More and more companies offer some sort of same day service, but I question how fast is too fast? Do you really need that pair of shoes within the next four hours? Is it worth the investment? We’ve heard not a lot of people are utilizing it.”
In one way, Hills is correct. After researching and writing a report that explores same day shipping services and how retailers are using them (it’s available here for WGSN subscribers), I found that the consumer doesn’t expect this service. But, if a retailer isn’t trialing and investing in it now, they are losing the race before it began. Here’s why:
1. Same day shipping startups are already changing customers’ expectations: Startups such as Deliv, which recently partnered with Macy’s, and Shutl, which eBay bought in 2013, are making it easy and cost efficient for retailers and customers to use same day shipping. How? Shutl and Deliv are asset free companies that use established networks to save money and quickly deliver packages. These startups are disrupting the space and doing the heavy lifting for retailers and customers. They are viable partners that more stores will want to work with, therefore more consumers will expect these services.
2. Customers will shop with the competitor, not you: Although many apps such as Uber and Postmates aren’t completely focused on retail partnerships now, they will be in the future. Why? It creates another income stream and increases users’ activity within the apps. Retailers that don’t partner with these on demand delivery services will be left out of the “they-are-easy-to-shop with” ecosystem. I also predict that down the line, these apps will charge customers more for requesting delivery from a non-participating store, which will make it very easy for a customer to purchase the same toothpaste you provide from a competing store down the block.
3. Retailers should NOT make decisions based on what consumers expect now: While I’m happy to see that Sears, Macy’s, and Everlane are testing these services, the industry as a whole is too often behind the curve. Waiting to offer same day shipping when the customer starts to expect it is a miss. Just because customer adoption of same day delivery is low now, doesn’t meant it won’t be higher in the future. Retailers should establish themselves as a same day shipping provider early in the game to create customer loyalty now.