X Delivery and the Retail Management Institute of Santa Clara University announced the publication of a new research report highlighting the degree to which fast, free, and effective shipping defines online brands’ customer relationships. The State of Shipping Report 2022: Why Faster Shipping Matters reveals that 62% of shoppers expect their orders to arrive in less than 3 business days when choosing free shipping — yet more than four-fifths of leading fashion and apparel retailers are still using 5-8 day delivery options to service free shipping orders.
Failure to expedite shipping is eating into retailers’ revenues, with a full 56% of abandoned carts blamed on concerns relating to deliveries. Speed of delivery is now the decisive factor behind over one-quarter of abandoned carts, second only to pricing among customers who intended to make a purchase. Lack of same-day delivery and in-store pickup options were also seen as key reasons for cart abandonment as customers sought faster and more convenient fulfillment options.
“Customers want shipping to be free and fast — and they’re willing to abandon carts and walk away from brands that fail to deliver on both fronts,” says Kirthi Kalyanam, the L.J. Skaggs Distinguished Professor and Executive Director of the Retail Management Institute of Santa Clara University, which conducted the survey in partnership with X Delivery. “Today’s consumers are more demanding than ever, and it’s up to merchants to give them the streamlined, expedited shipping experiences that they crave.”
Time to delivery was also a key driver of purchasing intention, with more buyers ranking delivery speed as a key consideration versus factors such as pricing, return policies, or promotions and rewards. And while customers appreciate free expedited shipping, they are not opposed to paying for faster shipping. Three-quarters of consumers, including 90% of high earners, have paid for faster shipping in the past, but the research shows that consumers are reluctant to pay more than $7 for faster shipping — a far cry from the $15-$20 upsell typically offered by online retailers.
The State of Shipping Report 2022 suggests that the rise of Amazon Prime — which shifts the cost of expedited delivery to a less-visible monthly membership fee — has trained online shoppers to expect rapid delivery at no additional cost. Over three-quarters of all U.S. shoppers are now members of at least one of the three leading retail membership programs — Amazon Prime, Walmart Plus, and Target Redcard — and only 12% of U.S. households have no paid retail memberships of any kind.
Free shipping is now ubiquitous, with 96% of retailers offering zero-cost shipping options, but strikingly few brands are currently meeting consumer expectations when it comes to speed of delivery.
“Everyone understands the ROI of free shipping, but many retail brands aren’t yet providing affordable and convenient expedited shipping options,” says Peter Sheldon, SVP of Strategy & Business Development at X Delivery. “Amazon has trained today’s online shoppers to expect rapid deliveries, with almost two-thirds of consumers expecting speedy shipping when using free delivery options. Just 1% of the fashion and apparel brands we benchmarked achieve that goal, so retailers that step up and elevate their delivery options have an opportunity to upgrade their brand experience, reduce cart abandonment, and capture significant ROI.”
The State of Shipping Report 2022: Why Faster Shipping Matters report is based on research conducted in June 2022 by Santa Clara University’s Retail Management Institute. Two consumer research panel surveys were conducted in collaboration with X Delivery, reaching almost 2,500 U.S. adults who regularly purchase physical products online for delivery to their home.
X Delivery connects high volume ecommerce brands to undiscovered nationwide shipping options. X Delivery streamlines the shipping process through technology, reliability, speed, and price. We leverage in-motion supply chain assets, from empty warehouses to local delivery services, and connect them to new technology. By connecting to our API, customers have access to multiple delivery options from anywhere in the country that out-of-the-box shipping tech platforms do not offer.