2020 Retail Outlook: Free and Fast Shipping Will Go Hand-in-Hand

For years, online shoppers prioritized free shipping over fast delivery by a wide margin. High shipping costs were a top cause of abandoned online shopping carts, and consumers would add items to their carts to qualify for free shipping thresholds. Today, “free” still trumps “fast,” as more than half of shoppers say free shipping is of primary importance, compared with 10 percent or fewer who rank speed in first place, according to measurement firm comScore.

But at the same time, expectations are rising for swift delivery capabilities. Four in five U.S. consumers expect merchants to be able to deliver items the next day if orders are placed by 1 p.m. And a recent UPS study found that more than a third believe items bought after 5 p.m. should still qualify for next-day delivery.

Contributing to this speed pressure is Amazon.com, which earlier this year announced one-day delivery would be the default for members of its Prime subscription service. In response, rivals Target and Walmart are stepping up efforts to offer one-day delivery and same-day store pickup, while smaller brands that were already straining to match Prime’s long-held two-day timeframe are now scrambling to keep pace.

To meet shoppers’ rising expectations for both free and fast fulfillment, merchants should explore all possible avenues to make their operations as nimble as possible, while communicating capabilities clearly at every stage along the path to purchase. Priorities include the following:

Fully Integrated Order Management and Inventory Tracking

Together with the e-commerce site, these back-end systems can enable services such as buy online, pick up in-store (BOPIS), now used by seven in 10 consumers, according to Business Insider, along with ship-from-store capabilities, which can speed last-mile fulfillment while potentially keeping costs lower than relying on a distribution center.

Shipping Rewards for Loyal Customers

Offering free or discounted expedited shipping to frequent buyers, to loyalty club members for special occasions (e.g., birthdays or around the holidays), and/or to social media advocates gives VIPs access to the swift delivery they expect, without making margin-destroying mass offers to all shoppers.

Selective Acceleration for Key Categories

Merchants selling products in multiple categories may want to throttle shipping speed to match buyers’ expectations and avoid being outgunned by the competition. Perishables, high-consideration products, and large items incurring higher shipping fees are all candidates for swift delivery, as are need-it-now staples such as diapers and toilet paper.

Comprehensive, Frequent Customer Service Messaging

More than four in 10 consumers say they research delivery costs prior to purchase, while 56 percent actively track every order, UPS found. Therefore, merchants should begin messaging estimated delivery dates and fees early in the path to purchase. Once an order is underway, more than 60 percent of WISMO customer service requests occur before orders have been assigned a carrier tracking number, according to our research. Therefore, it’s essential to communicate pre-shipment updates and deliver them via customers’ preferred channel. When it comes to in-store pickup, retailers should send multiple messages to help customers navigate the process.

Delivering Free and Fast

As the race continues in 2020, retailers that can execute seamless fulfillment — and provide up-to-the-minute updates on order status — will have an advantage.

Fang Cheng is the CEO and co-founder of Linc Global, a customer care automation platform that helps brands differentiate themselves with automated services and experiences across the channels shoppers prefer.