[Updated Post from April 26, 2021]
Two-day delivery once set a new benchmark in e-commerce. Then came along same-day delivery.
As consumers come to expect ever-faster delivery timeframes, more e-commerce brands are pushing to streamline delivery workflows and improve customer satisfaction via rapid shipping. But is your business ready to offer same-day delivery? And more importantly, is same-day delivery the right offering for you as a retailer?
While same-day delivery might seem like the ultimate CX strategy in e-commerce, it's important to remember that shipping speed is just one piece of the puzzle. As an e-commerce brand, there are numerous strategies at your disposal to elevate the delivery experience and foster customer loyalty.
Same-day delivery refers to the delivery of an online purchase on the same day that the order was placed by the customer. This service creates a very small window of time for businesses or logistics companies to process, pack, and ship an order in time for it to be delivered
Although costly to execute, a same-day delivery service gives merchants some distinct advantages. As customer expectations for speedy delivery in e-commerce increase, same-day delivery offers online shoppers near-instant gratification and convenience, helping online storefronts to compete in a marketplace dominated by ecommerce giants.
With more consumers turning to online shopping for time-sensitive or impulse purchases, same-day delivery enables brands to diversify their shipping options and meet the needs of more shoppers. In turn, this means higher rates of customer satisfaction and lower shopping cart abandonment due to lengthy delivery timeframes.
However, same-day delivery speed poses some major hurdles for e-commerce brands. It requires a highly streamlined fulfillment and delivery workflow to be able to guarantee such a rapid turnaround from order processing to delivery. If you're going to offer same-day service, you need to be certain that you can deliver (pun intended).
Same-day delivery has experienced a massive improvement in availability since the COVID-19 pandemic. When traditional retailers were forced to shut due to stay-at-home restrictions, consumers pivoted to online shopping in massive numbers, including for everyday essentials such as groceries or medicine. This caused same-day delivery to skyrocket in popularity.
According to a February 2021 survey from Digital Commerce 360 and Bizrate Insights, 36% of online shoppers used same-day delivery at least once in the prior six months, compared to just a quarter in August 2020.
While there's been a slight course correction as store-based shopping has back picked up, same-day delivery continues to be a fast-growing trend. The same-day delivery market is forecast to grow by $9.82 billion between 2021-2025, at a CAGR of 20.31%, signaling that customers' expectations for faster delivery services is no fad.
The terms same-day shipping and same-day delivery often get used interchangeably, which can confuse consumers over what service they are getting.
Same-day delivery orders guarantee the delivery of customer orders on the day that the order was placed, usually before a specified cut-off time. To achieve such rapid turnaround times, brands will often use a local courier service, route planning software, or warehouse facilities close to customer hubs to shorten delivery timeframes.
Same-day shipping services are when a retailer is capable of processing, packing, and shipping customer orders on the same day they are received. However, it's important to note that same-day shipping does NOT guarantee that consumers will receive their order on the day they placed it. This will depend on the shipping method used by the retailer and the transit time to the delivery location. Same-day shipping is often used as a marketing pitch to entice consumers to place orders. However, this can be misleading if the brand is using an economy shipping method with a slow delivery time.
Some retailers will offer both same-day shipping or same-day delivery, or one or the other depending on where a customer wants their order to be delivered to. It's important that the shipping page on your online store clearly states what delivery options are available and how long they take. Terms like ‘next-day delivery' or ‘two-day delivery' are much easier to understand than talking about the dispatch timeframe.
It's no secret that what qualifies as ‘fast' delivery is getting progressively speedier. Where Amazon Prime's free two-day shipping was once considered a game-changer, this has since become a standard customer expectation for e-commerce brands at large.
Amazon's free shipping offering has been steadily trending towards shorter delivery timeframes.
But does this mean that same-day delivery is the new two-day delivery?
While same-day delivery is often depicted as the next frontier, the reality is a lot more mixed. The demand for same-day delivery is growing, but it hasn't yet set a new benchmark for what consumers consider to be 'fast' delivery.
A survey from e-Marketer found that over half (53%) of customers are happy to wait 2-3 days for an order, while just 8% demand same-day speed on every order.
This might come as a surprise, given the vast resources that retailers including Amazon and Target have invested in improving their rapid delivery capabilities. But same-day delivery doesn't come cheap, and most businesses have no choice but to pass some of the cost onto their customers.
During times of inflation, the demand for free shipping typically skyrockets as many consumers prioritize cost over speed. Shippo's 2023 State of Shipping survey found that 75% of consumers prefer free shipping over fast shipping, while a third of retailers said that managing shipping costs would be their biggest challenge in 2023.
In sum, there isn't a wealth of evidence to show that same-day delivery is an absolute must-have for e-commerce brands. However, this will depend a lot on your product category and target audience.
We've set the scene for same-day delivery. But the question remains: Should your business be offering it?
While ‘yes' might seem like the obvious answer, you need to assess whether it's actually in your best interests as a brand. Here are some questions to determine whether offering same-day delivery is right for you and your customers:
This is the number one question you need to ask yourself before you go through the effort and expense to implement same-day delivery. Survey your current customers to understand what they think of your current shipping options and what they like to see introduced. You might be surprised by what they tell you!
For example, you may find that your customers are more interested in free shipping options than a faster delivery service, or maybe the ability to select specific-day delivery. One size doesn't fit all, so it's important to make sure you are catering to the diverse needs of your customers.
Same-day delivery is easiest to implement when your customers are clustered within a few large metro areas close to where you have a fulfillment center. This means shorter last-mile delivery timeframes and cheaper carrier fees because goods are traveling short distances.
If your customer base is widely dispersed across multiple regions, offering same-day delivery options to all customers is unlikely to be cost-effective or feasible for your business. For example, if some customers are located in rural areas a long way from your warehouse, it's unlikely that you'll be able to make a same-day delivery guarantee. Instead, you may have to default to a one-day delivery service for customers with certain addresses.
We all know that there's no such thing as ‘free' shipping. Someone needs to foot the bill – and you need to decide whether that's going to be you or the customer.
While customers have traditionally shown reluctance to pay for shipping, some are willing to shell out some extra money if it means they get their order faster. However, this willingness has been shown to fluctuate depending on the state of the economy. According to Dotcom Distribution's 2022 survey, 41% of consumers said they weren’t willing to pay more for faster shipping, while only 12% said they wouldn't wait longer for orders to arrive to save money.
In sum, brands need to think very carefully about whether they can support same-day courier costs, and if not, how willing their customers are to foot the cost themselves.
Offering a same-day delivery service out of a single fulfillment center is a major challenge to your supply chain. Even with a highly optimized operation, it only takes adverse weather or a power outage to derail your fulfillment efforts.
Furthermore, a centralized fulfillment strategy means that your shipping costs are likely to vary between orders by a large margin, especially when your facility is serving a large geographic area. This makes it more challenging to create a cohesive shipping strategy that optimizes speed and cost.
By using a network of micro-fulfillment facilities in strategic locations, you can allocate your orders to whichever location can fulfill and ship orders to your end customer the fastest. This could involve turning storefronts into fulfillment locations or partnering with a fulfillment provider who can put a nationwide network of warehouses at your disposal.
A streamlined last-mile delivery strategy is critical to seamless home delivery in e-commerce. But with a same-day delivery service, your brand has even less margin for error. If your customer is going to receive their order on the same day they placed it, even minor issues like traffic congestion or ineffective travel routes could orders from reaching their destination on time.
Investing in route optimization software ensures that courier companies are only using the most efficient routes when making delivery drop-offs. You should also consider notifying your customers by SMS or email when their order is out for delivery to minimize the odds of a failed delivery attempt.
It's easy for discussions around e-commerce shipping to fixate on speed, rather than other ways that brands can meet customer expectations for seamless delivery experiences.
It's important to remember that speed is only one benchmark that customers will use to judge whether brands have delivered the perfect order. If same-day delivery capabilities aren't available to your business, there are still numerous other strategies that your disposal to increase customer satisfaction and stay competitive.
To avoid disappointing your customers, it's crucial to set clear and realistic expectations regarding delivery timeframes from the outset. When an order is placed, provide an accurate estimated delivery date and provide regular updates during the fulfillment and delivery process. A high level of transparency builds trust and allows customers to feel confident that their order is in good hands.
Enabling customers to monitor their order's progress in real-time takes a huge weight off your customer service team. When it’s possible for your customers to check their order status at their convenience, this lowers delivery anxiety and provides an important touchpoint to connect with your brand post-purchase.
Providing customers with multiple shipping options caters to diverse needs and allows them to select the option that best fits their requirements and schedules. Methods including free shipping, next-day delivery, weekend delivery, or even specific-day delivery demonstrate your commitment to convenience and give your business a key competitive differentiator.
Analyzing your delivery performance is essential to identify where improvements can be made to your order management and shipping strategies. Metrics such as pack rate, on-time delivery, and damaged package rate can uncover bottlenecks in your operation that are slowing down delivery speed, so you can take proactive steps to address them.
Keep a close eye on key metrics such as delivery times, package conditions upon arrival, and customer feedback. By identifying potential bottlenecks or issues, you can take proactive measures to address them. Continuously improving delivery performance demonstrates your dedication to quality service and helps you identify areas for enhancement.
Regardless of whether or not you decide to offer same-day delivery to your customers, it's important to keep in mind the following:
There's no point in offering any kind of expedited shipping if you cannot guarantee on-time delivery. Late deliveries damage your brand's reputation and undermine consumer trust, leading to poor customer experiences. It's much better to opt for slower delivery speeds you can trust than promise what you can't deliver.
There's no single shipping method that is superior to all others, no matter how fast; to meet the needs of every customer, online retailers must offer flexibility by giving them a choice of shipping options at varying speeds and price points. Empowering consumers to take charge of their post-purchase experience builds brand loyalty and increases the likelihood of repeat purchases.
Making fast delivery the centerpiece of your CX strategy can backfire if you aren't able to accommodate changing consumer preferences. Customers are less likely to demand expensive, expedited shipping methods when inflation is running rampant, instead prioritizing affordability. It's important to stay in tune with what your customers are seeking and find ways to offer it, whether that's a more generous free shipping policy for free return shipping on exchanges.
When you're considering same-day delivery, it comes down to one question: Can your brand actually deliver?
Few things drive customers away from a brand more quickly than a delayed delivery. If you're going to jump into this space, you need to be certain your business has the infrastructure and expertise to make it work.
This is why it's a good idea to partner with an experienced omnichannel fulfillment provider like Ryder E-commerce by Ryder who can make reliable same-day delivery a reality. From streamlined picking and packing for faster fulfillment to leveraging carrier relationships for more affordable shipping, we ensure the very best delivery experience for your customers so you can focus on ensuring that your business is making the most of its growth opportunities.
