Evidently, consumers want their goods fast, even if it means getting it without a discount.
A new merchant survey from Ware2Go, a UPS-founded on-demand fulfillment network and integrated tech platform, found that faster shipping is more effective in driving conversions than discounts, with 65 percent of merchants reporting an increase in e-commerce cart conversions of up to 25 percent when they offer a one-to-two-day delivery promise.
In the survey, focused on customer shipping preferences, as well as their fulfillment strategies to meet evolving customer demands, merchants said the most impactful tactics to drive cart conversions involved shipping promise, with 56 percent citing free shipping, 52 percent one- to two-day shipping, 29 percent free gift with purchase and 26 percent in-cart discount.
A significant majority of merchants (75 percent) believe that offering two-day shipping makes them more competitive, with 60 percent of those polled currently offering one-or-two-day shipping guarantees.
The survey was conducted in August by Propeller Insights on behalf of Ware2Go. It polled some 250 merchants operating online and brick-and-mortar businesses, with revenues ranging from $2 million to $200 million.
According to survey results, fast shipping inspires customer loyalty, particularly during a time when 87 percent of consumers are shopping from home due to the global coronavirus pandemic. Some 71 percent of merchants said customers are willing to pay extra for one- to two-day shipping to receive their products sooner, 59 percent said offering two-day shipping guarantees brought more repeat customers, 39 percent felt it gets them better online reviews and 22 percent viewed fast shipping as a way to beat the competition.
“Meeting consumer expectations for fast shipping requires powerful behind-the-scenes operations, from supply chain to last-mile delivery,” Ware2Go CEO Steve Denton said. “Merchants who optimize those operations through strategic partnerships are poised for success in today’s e-commerce-driven, B2E economy. This research validates the need for the type of flexible and scalable infrastructure Ware2Go’s model affords its merchant partners.”
As for operations, merchants do face several key challenges, most notably insufficient inventory management, incorrectly filled orders, slow delivery speeds and lack of labor availability. About 50 percent of merchants currently insource their warehousing and fulfillment and plan to continue doing so, while 32 percent said they both insource and outsource.
When it came to barriers to adopting an outsourced warehousing and fulfillment provider, 34 percent of merchants cited difficulty finding vendors with the flexibility to meet their requirements.
Ware2Go operates a turnkey nationwide fulfillment network designed to help merchants easily position products closer to end customers for a fast, inexpensive and reliable order-to-delivery experience. Ware2Go offers an integrated solution for storage, pick, pack and shipping services to businesses of all sizes through an intuitive cloud-based technology platform that it says helps users easily extend the distribution footprint and scale up and down as operational needs change.