OnTrac Report: Consumers Expect Fast Delivery, But More Willing to Pay a Premium

In an era where fast delivery is not just desired, but expected, retailers are navigating through the choppy waters of evolving consumer expectations.

OnTrac’s report, “How Retailers Can Use Faster Delivery to Rebuild Brand Loyalty and Meet Consumer Expectations,” sheds light on the pivotal role of delivery speed in shaping online purchasing decisions and building brand loyalty. Here is a summary of the main points from this report.

The Ecommerce Boom and Consumer Spending

Despite grappling with high inflation, a whopping 83% of consumers plan to either increase or maintain their online spending levels in 2023 and beyond.

The primary motivations for this continued online shopping trend include free shipping, convenience, product availability, and notably, faster delivery.

Fast Delivery: A Non-Negotiable for Consumers

A staggering 97% of consumers identify faster delivery as a crucial factor influencing their purchasing decisions. With 86% defining fast delivery as two days or less and 63% expecting to receive their deliveries within this timeframe, the demand for speed is undeniable.

Slow delivery, which 70% of consumers define as three or more days post-order, has led to significant consequences for retailers, including consumers switching to other retailers (63%), refraining from repeat purchases (60%), and cart abandonment (43%).

Delivery speed also plays a pivotal role in consumers’ participation in loyalty programs.

Of those who joined a loyalty program to receive faster delivery, 83% consider an acceptable delivery time to be within two days. The report underscores the importance of fast delivery not only in attracting but retaining customers.

The Rise of Next-Day and Same-Day Delivery, Including Paying For Faster Service

Consumers are increasingly opting for retailers that offer fast delivery when shopping online, with a majority choosing one retailer over another due to the availability of next-day (71%) and same-day (67%) delivery.

Particularly for Gen Z and Millennials, faster delivery is a top consideration when shopping online, reflecting the growing influence of next-day and same-day delivery on their shopping choices.

Interestingly, 58% of consumers have paid more for fast delivery in 2023, with two-thirds of those having paid more for next-day delivery (69%) and same-day delivery (61%).

This reflects a significant evolution in consumers’ shopping behaviors, as 62% of those surveyed in June 2020 had never paid for expedited delivery.

Home Delivery: The Preferred Choice

Despite the rise of buy online, pick up in-store (BOPIS) and other forms of click and collect during the pandemic, consumers still overwhelmingly prefer to have their items delivered to their home, with 85% favoring home delivery over BOPIS.

This preference is expected to grow, with 95% of consumers planning to maintain or increase their use of home delivery, and 81% planning to make it their primary shopping method.

Free Shipping: A Critical Factor Amidst Inflation and (Re)Building Brand Loyalty

Free shipping continues to be a critical factor for consumers, with 59% reporting that they would stop shopping with a retailer that does not offer this service.

Slow delivery and high shipping costs have led consumers to abandon their carts, while high shipping fees have driven 63% to choose a different retailer, 57% to stop shopping with that retailer, and 56% to shop in-store.

In the context of brand loyalty, the report notes that Covid-19 has introduced an unprecedented level of brand loyalty disruption.

Retailers seeking to re-establish brand loyalty can start by addressing their customers’ top pain points: slow delivery and high shipping costs.

In addition to delivery speed, free shipping remains crucial to acquiring and retaining customers, with 80% of consumers willing to shop at a new retailer due to free shipping.

Conclusion: Adapting to the New Normal of Retail

The report concludes by discussing the growing demand for home delivery and the importance of diversifying carrier bases by moving away from single-carrier strategies, which no longer suffice in the current retail environment.

Retailers that can leverage free and fast delivery will best enhance the customer experience and keep consumers coming back.

However, more consumers are also now willing to pay for expedited delivery, offering an opportunity for retailers to offset costs on fast delivery options.

Navigating successfully through the latest and ever-changing ecommerce trends will be crucial to success for online retailers and marketplace sellers. This report commissioned by OnTrac offers valuable and actionable insights for online businesses. Read the full OnTrac report here.