Same-Day Delivery Drives Brand Loyalty and Purchase Intent

While the holidays come just once a year, a brand’s reputation can easily be damaged and customers quickly lost when expectations aren’t met during the pivotal shopping season. This past holiday season, we saw retailers make changes to their delivery options to provide shoppers with conveniences they increasingly see as essential, like same-day delivery. At the same time, in what’s become an annual ritual, the major shipping providers announced an array of rate increases and late holiday deliveries.

Managing shipping costs is a challenge for retailers, which are already facing tight margins and immense competition. While last-mile delivery, or the final transit of a product to its destination, can be the most expensive and poses numerous challenges for retailers, it's nonetheless a key differentiator and an offering retailers can no longer ignore.

According to Dropoff’s 2nd Annual Holiday Survey, 60 percent of U.S. holiday shoppers indicated they were more likely to purchase holiday gifts from retailers that offered same-day delivery. It also showed a significant number of consumers — 67 percent — planned to do last-minute shopping, and expected retailers to accommodate their needs. Ninety percent of last-minute shoppers said they were more likely to purchase from retailers offering same-day delivery.

Interestingly enough, Boston Retail Partners’ 2017 Digital Commerce Survey showed that same-day delivery was offered by 51 percent of retailers in 2017. While that number seems significant, more than half of those described their service as “implemented and needs improvement.” It’s clear retailers are headed in the right direction, but there are a few areas to focus on to ensure you’re on the right path to delivering the most cost-effective, efficient and reliable same-day delivery for your customers.

Selecting the Right Partner

While some retailers think that once a package leaves its warehouse, what happens next is out of its hands, consumers don’t seem to agree. Data from Dropoff’s survey shows consumers blame retailers for delivery mishaps. Seventy percent blame the retailer if their order arrives damaged, and 75 percent blame the retailer if it arrives late. Consumers seem to believe that it's the retailer’s responsibility to choose a delivery partner that represents their brand and customer service values.

A recent Forbes Insights Report found that 91 percent of midsize retailers have used the same delivery and shipping system for four years or more. In order to succeed, retailers should develop a shipping strategy that incorporates new technologies and multiple partners. A same-day delivery service can become part of a broader strategy, offering customers a faster way to receive local items and enabling retailers to keep up with high delivery expectations. Taking advantage of a fleet of drivers and vehicles, backed by cutting-edge technology, can help businesses meet expectations for same-day delivery without breaking the bank. For those with an e-commerce site, working with a delivery partner that offers an API that connects to your e-commerce platform or warehouse management software is key. It allows customers to seamlessly request same-day delivery via your checkout process, and both you and your customers can receive real-time tracking and email confirmations. The right delivery partner can become an extension of your business and will represent your brand as you would yourself.

Supply Chain Visibility

Retailers also need to focus on crucial back-end functions, including inventory-related challenges, to ultimately be able to offer faster delivery options. However, this is an impossible task without insight into exactly what you have, where it is and how to get it. If retailers are fulfilling same-day orders from the nearest store and don’t have the right inventory systems in place, they risk disappointing customers. Brand reputation can be damaged when retailers don’t perfect the technology behind the experience. End-to-end supply chain visibility — across buyers, suppliers and logistics providers — will be key.

What Does This Mean for Retailers?

The holiday shopping season is a pivotal time for retailers, with tremendous opportunity to earn customers’ loyalty. Eighty-nine percent of respondents from Dropoff’s survey said that after purchasing a holiday gift and having it delivered same-day, they are “extremely likely” to recommend the retailer to others. Furthermore, 75 percent said they're more likely to purchase from a retailer again after having received a same-day delivery. That number goes up to 86 percent for millennials. Retailers that can cater to the modern consumer’s desire for instant gratification will be able to drive sales, stand out against competitors, and gain a loyal following of customers who want it all — now. This is the time to start putting processes in place for the 2018 holiday season.

Sean Spector is the CEO of Dropoff, which is modernizing the standards of same-day delivery by offering businesses a superior experience built on convenience, reliability and unmatched customer service.