Five Reasons Why the Delivery Economy Is Here… Now
Providing a great customer experience has long been a key factor in predicting any business's success. Traditionally, this meant providing customers things like a comfortable place to shop, attentive and courteous sales associates, and a generous return policy.
But, like everything else today, new digital technologies and services have dramatically changed what customers expect during their shopping experiences. For today’s consumer, whether they’re ordering lunch for their friends or a shipment of chemicals for their plant, convenience, speed and simplicity reign supreme — a trend driven by the increasing popularity of “on-demand” technologies.
project44 recently surveyed 750 consumers and 500 marketing executives to better understand where brands and consumers are aligned (and misaligned) on what makes a great delivery experience. The survey uncovered five compelling trends that all point to the emergence of the Delivery Economy — the pervasive sentiment in which customers expect low-cost, fast and highly transparent delivery of goods. Smart brands that want to understand new rules of customer service should pay attention to the top five signs that the Delivery Economy is here, and here to stay:
Paying for Shipping is a Non-starter
In the old commerce models, customers would seek out the best product that was within their budget and factor in shipping costs later. Thanks in large part to big players like Amazon’s free one-day or even same-day delivery options, customers asked to pay more for standard shipping now simply take their business elsewhere.
More than half (53 percent) of consumers cited free or discounted shipping as one of the most important factors in their purchase experience, the same weight given to the price of the product. Savvy consumers realize they have final say in what makes a great delivery experience, and being asked to pay for standard shipping is quickly becoming a deal breaker. According to the research, customers have grown accustomed to shipping perks, so much so that 58 percent expect to be offered free or discounted shipping when buying a product.
Fast Shipping is the Only Shipping that Matters
While customers expect standard shipping to be included in the cost of the product, they are more than willing to pay extra to get their goods sooner, with 60 percent saying they would pay more for faster delivery options.
For example, Amazon is so committed to the speed at which it can deliver products, it has rethought the entire supply chain process in densely populated cities like Seattle, New York City and San Francisco with its new multi-story warehouses, solutions that let them keep more products closer to customers at all times.
All Customers Want Greater Transparency in Delivery
On-demand apps like Uber and Grubhub don’t just offer customers traditional “delivery windows” but precise tracking accurate down to the minute. According to the research, customers are applying these expectations to all of their brand interactions — 31 percent said they want real-time tracking of deliveries, an expectation that only 20 percent of marketing executives believed was important to customers.
The “On-Demand Delivery” Effect on both B2B and B2C Shipping
While the delivery monoliths like Amazon and Walmart are heavily impacting consumers’ expectations, 76 percent of marketing executives said that on-demand delivery apps (Grubhub, Instacart, Postmates) are shaping how consumers want purchases delivered.
On-demand delivery apps offer the ability to track shipments and deliveries by the minute and give real-time updates on the progress of the delivery. Thanks to these apps, consumers are simply unwilling to go back to the old model. This trend is permeating expectations, even in business purchase decisions: 94 percent of respondents who make purchases for their company said they expect the same level of focus on customer satisfaction as when they’re making personal purchases.
The Ripple Effects of a Bad Delivery Experience
When a package isn’t delivered when expected, 74 percent of consumers said it hurts their overall impression of the company. This means brands are now just as responsible for their delivery experiences as they are their products. The distinction between product and experience is no longer a relevant one to consumers. Sixty percent of consumers say they complain when a package isn’t delivered when expected, often leading to disastrous results on social media.
How Can Brands Keep Up?
The Delivery Economy is here, and marketers are taking note. As the methods and options for delivery of goods and services continue to evolve, so will customer expectations.
In order to incorporate the Delivery Economy into marketing and customer experience strategies, brands need close alignment with the operational groups responsible for perfecting the delivery experience. This critical interdependency between logistics, transportation and other critical supply chain stakeholders will determine which brands will remain competitive in this evolving landscape.