Today’s customers want things faster than ever, and big ecommerce brands are jumping to meet their expectations.
Amazon, for example, offers free same-day delivery on more than 3 million items in many major metro areas for customers who place orders before a daily cutoff time. It’s been able to deliver on this promise by investing in “mini-fulfillment centers” in a variety of geographic regions, which stock most of Amazon’s most frequently ordered products.
Thanks to Amazon and other ecommerce giants, shoppers are getting accustomed to receiving items immediately, and smaller brands are jumping on the trend.
As of 2018, 51% of retailers were already offering same day delivery on some of their items, and the trend has only grown since then. Shoppers have been making the most of it: last year, 36% of shoppers said they’d ordered same-day delivery from an online merchant within the previous six months.
This can be a big incentive to purchase products from one brand versus another that doesn’t offer same-day shipping, or instead of going to a bricks-and-mortar store. A 2021 Digital Commerce 360/Bizrate Insights survey found that 68% of shoppers said that fast shipping would lead them to place an online order.
Should you offer same-day shipping?
If you’re a smaller brand, does same-day shipping make sense? Ask yourself these questions to help you decide.
- Where is our customer base? Take a look at where your customers live to decide whether same-day delivery is feasible for all, or even a portion, of them. Are they located primarily in major metropolitan areas, or do you have a lot of rural customers? You’ll need to make sure that you have fulfillment centers in close proximity to any customers you plan to offer same-day delivery to.
- Can we justify the costs? Same-day shipping is considerably more expensive. While you may end up getting orders that you’d otherwise lose, will those orders be enough to justify your shipping costs if you offer free same-day shipping? Or if you ask customers to pay for same-day shipping, how much will they be willing to spend? McKinsey found that 53% of U.S. consumers are willing to pay extra for same-day shipping, so it’s worth weighing up how to factor your same-day shipping fees into your costs without alienating customers.
- How reliable are our deliveries? Making a promise of same-day delivery will likely help you get more orders — but if you’re not able to deliver on your promise, you’re not likely to get another chance from those customers. A Voxware survey found that 69% of customers were much less likely to buy from a company again if the order wasn’t delivered within two days of the original prediction.
Same-day delivery is a rising trend, but depending on where your company is in its growth, it may or may not be the right fit for you. You should only offer same-day delivery if you’ve studied all the variables and know that you’re ready to deliver on your promise.
Tips for optimizing your same-day shipping process
If you’ve decided to commit to offering same day-shipping, make sure that you’re ready to pull it off without a hitch. Here are some ways to optimize your process:
- Partner with a 3PL for order fulfillment -Unless you have an Amazon-like distribution network of your own, it will be difficult, if not impossible, for you to deliver on same-day delivery promises without using a fulfillment partner. Using a 3PL, which will handle all of your order fulfillment and returns, will help you to optimize deliveries across a much larger network than you’d be able to do independently. 3PL companies like Loop’s partner, Whiplash, can help you deliver on your same-day delivery promise across a wide geographic network.
- Trial the service before rolling it out more broadly – Before offering same-day shipping publicly on your store, consider doing a quiet roll-out, offering free same-day shipping to some of your most loyal customers in a trial phase, with the caveat that there may be some hiccups. You’ll be able to learn from the trials and see how often the products were delivered on schedule to understand whether you’re ready to offer the service publicly.
- Limit your geographic regions, and expand only when you’re ready – Even if you decide to roll out same-day shipping, make sure you launch it in the geographic regions that you have the most confidence that you can deliver in. Just like Amazon did, focus on a few key regions where you have a densely populated customer base before expanding the service to other areas.
- Clearly communicate with the customer every step of the way – It’s important to build a clear, multi-channel communications workflow that helps your customers know when the order moves to a new stage of the process. You should provide order confirmations, shipping confirmations, and a shipping tracking number so that they can track their delivery in real-time.
- Be prepared to offer concessions if you don’t deliver on time – Same-day delivery doesn’t always work. If a customer has ordered an item with same-day shipping and it doesn’t come through on time, consider offering an additional store credit, or even a discount on their purchase.
- Make the refund process painless – If the item is a timely purchase for the customer, they may decide to purchase it at a physical store if it doesn’t arrive in time. In this case, make sure that you have a simple and seamless refund process, where customers can request a no-questions-asked refund or exchange for the product.
How can you compete without offering same-day shipping?
So let’s say you’ve done the math and worked out that same-day shipping isn’t feasible for your business right now. You might disappoint customers by failing to deliver on their high expectations, or your geographic range is too diverse or rural to justify the high costs of same-day delivery.
If that’s the case, there are still other ways you can differentiate from your competitors. Here are a few ways to focus on optimizing your customer experience without same-day delivery:
- Offer free-next day shipping – Same-day shipping is a tough promise to keep, but next-day is much more manageable for most brands. Work with your fulfillment partner to build a logistics plan for offering next-day delivery to every domestic customer, or at least the majority of your customer base. If the product isn’t an urgent need, most customers won’t be discouraged by waiting a day to receive their order.
- Provide great customer support – Providing your customers with high-quality guidance through the product selection process, and best-in-class omnichannel support with their orders, will go a long way towards building brand loyalty. Use automation through chatbots and other tools to help you scale your customer support, so that your live agents will be able to take the time to focus on delivering high-value solutions and strategies to your customers.
- Build a generous and flexible returns policy – While some customers will prioritize same-day shipping when deciding where to make a purchase, many will focus instead on whether the store has a flexible returns policy. In fact, 67% of shoppers will check a store’s return policy before buying, and 92% would buy again from you if your returns process is easy. To offer the flexibility your customers are looking for, you should offer a minimum 30-day return window, but ideally longer. Shoppers also love receiving free return shipping. A generous return policy that favors customers will go a long way towards making up for a longer delivery time.
- Make exchanges simple – Sometimes, a product doesn’t quite work. Whether it’s the wrong size, wrong color, or simply doesn’t work for the customer, stores that make it easy to exchange one product for any other product from your store will be able to lock in recurring revenue from customers that might otherwise return a product and end their relationship with your brand. By making exchanges easy, and even incentivizing them by offering bonus credit for processing an exchange instead of a return, you can build valuable, long-term customer relationships from customers who might otherwise churn. Loop can help you build an optimized return process that results in a 40% exchange rate.
Whether to offer same-day shipping or not is a decision that comes down to a lot of different factors—but whether you do or don’t, you’re sure to win over loyal, long-term customers by following the strategies we’ve shared.