Online shoppers are becoming increasingly demanding, expecting brands to offer fast and free delivery as a standard, and expecting to see an estimated delivery timeline at checkout itself. The Covid-19 pandemic has not only accelerated demand in eCommerce causing a strain on shipping capacities but compelled many direct-to-consumer (DTC) brands to scale up to free shipping and quick delivery.
While big businesses like Amazon can fulfill orders from multiple warehouse locations to increase the shipping speed, the high shipping expenses for faster delivery are impacting small DTC businesses that need to keep up with Amazon but do not have the clout to negotiate on shipping prices. So it isn’t too surprising to see many small DTC brands ending up as Amazon sellers or medium-sized brands diluting their direct-to-consumer digital nativity and partly selling on Amazon to leverage its fulfillment capabilities.
Between 2020 and 2021, the number of shoppers opting for same-day delivery increased to 26% from 14%. This was a significant increase partly due to the pandemic which led to a surge in online orders.
Our data also suggests that faster shipping speeds bring in relatively more customers, especially in the small and mid-market segments. There is a significant difference in median monthly visitors between brands that offer next-day delivery and ones that don’t (58%). The difference narrows as the speed of delivery reduces to three days.
More mid-market companies offer same-day delivery compared with enterprise businesses or small businesses. A lot of mid-market DTC brands offer same-day delivery more often and they often align with on-demand shipping platforms like Instacart or DoorDash.
In 2019, PipeCandy up to 26% of small and medium businesses offered next-day delivery.
And now, with the pandemic accelerating ecommerce, businesses are scaling up to match industry leaders in shipping speeds.
At least 41% of small and medium DTC businesses offer next-day delivery.
Only 37% of all DTC businesses offer slower speeds of three days or more. Offering two options in addition to next-day delivery has become a norm to match Amazon’s Prime delivery standard. Besides, customers may prefer quick delivery but not over the high delivery. It is going to be interesting to see how the free and fast shipping trend will shape up in 2022.
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