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Guest Article in Parcel: How Retailers Can Win Back Customers with Faster E-Commerce Delivery in the Instant Gratification Economy

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By Josh Dinneen, Chief Commercial Officer of OnTrac. Originally published in PARCEL.

Consumers today want whatever they want whenever they want it. The demand for instant gratification has seeped into every corner of our lives, especially e-commerce, with 97% of shoppers calling faster delivery critical to their purchasing decisions.

When the COVID-19 pandemic accelerated the shift from in-store to online shopping, factors like speed and the convenience of home delivery became consumers’ top priorities. As shoppers began to seek out retailers that could meet these demands, almost 40%—mainly Gen Z and Millennials—fully deserted brands they previously trusted for new ones, leading to a broad disruption in brand loyalty.

Even as we move into the post-pandemic era, many of the impacts are proving to be long-lasting—and that includes the growing demand for faster delivery and the lack of brand loyalty among shoppers. Only 61% of consumers are still loyal to businesses they used prior to the pandemic, and even those that still shop with brands they used pre-COVID will check other retailers for lower prices (39%) and faster delivery (32%).

Brand Loyalty Compared to Before COVID-19 | OnTrac Last-Mile Delivery | How Retailers Can Win Back Customers with Faster E-Commerce Delivery

How can retailers rebuild brand loyalty in today’s brand-agnostic climate? OnTrac surveyed more than 5,000 consumers over the last three years to understand their shopping preferences and purchasing behaviors. Here are some of the key trends we uncovered, as well as how retailers can bridge the gap between the delivery experience they’re providing and what consumers are expecting.

1. 63% of Consumers Expect Two-Day Delivery
Consumers have made their demands for faster delivery clear, but just how quickly do they expect to receive their items? Eighty-six percent of consumers define fast delivery as two days or less and 63% expect to receive their items within this timeframe. This turnaround time remains the expectation for orders with free shipping, with more than one-third (39%) of consumers that place an order without shipping fees claiming they will only accept deliveries that arrive in two days or sooner.

86% of consumers define fast delivery as two days or less and 63% expect to receive their items within this timeframe.

2. Slow Delivery Loses Customers
While faster delivery is helping retailers attract more customers, slow delivery is driving them away. Seventy percent of consumers consider slow delivery to be three or more days after placing their order. Retailers that fail to meet the timeframe that consumers have come to expect are losing business. In 2023 so far, slow delivery has caused 63% of consumers to switch retailers, 60% to not purchase again from a retailer, and 43% to abandon their carts or stop shopping with that retailer. Shoppers also chose one retailer over another due to the availability of next-day (71%) and same-day (67%) delivery.

Slow delivery has caused 63% of consumers to switch retailers, 60% to not purchase again from a retailer, and 43% to abandon their carts or stop shopping with that retailer. Shoppers also chose one retailer over another due to next-day (71%) and same-day (67%) delivery.

3. 69% of Consumers Are Paying More for Next-Day Delivery
Shoppers are increasingly gravitating to retailers that provide faster delivery, and they are willing to pay for it. Nearly 60% of consumers have paid extra for faster delivery in 2023 so far, with the majority having paid more for next-day (69%) and same-day delivery (61%). Compared to just 38% of shoppers that paid for expedited delivery in 2020, that’s a massive 53% increase in just a few years.

Most consumers who paid extra for faster delivery did so for next-day (69%) and same-day delivery (61%). Nearly 60% of consumers have paid extra for faster delivery in 2023.

When it comes to how much shoppers are willing to pay for faster delivery, 71% of consumers would spend at least $3 for next-day delivery, while 55% would spend $5 or more for same-day delivery.

How Much Consumers Will Spend on Faster Delivery | How Demand for Faster E-Commerce Delivery Is Driving Retailers’ Shipping Strategies | OnTrac Parcel Carrier

Leverage Faster Delivery to Rebuild Brand Loyalty
Consumers are clearly prioritizing faster delivery and retailers need to level up their shipping strategies to meet this demand. As more consumers shop online and Gen Z expands their purchasing power, faster delivery will only continue to grow as a purchase driver. In order to rebuild brand loyalty and win customers, retailers should partner with a proven alternative carrier that can provide the best combination of faster delivery, cost-savings, geographic coverage, and on-time performance.

Data shown in charts reflects findings from OnTrac’s 2023 survey conducted with Hanover Research.