As e-commerce businesses compete to provide the best experience to their online shoppers, consumers are continuously raising the bar as their expectations rise due to the ever-changing e-commerce landscape. Do your online customers get their purchases delivered to them the same day? What used to be an innovative way to impress online consumers, is quickly becoming the new reality for omni-channel retailers.
Same day delivery is when a consumer can place an online order before early afternoon, and receive the item that same evening. From a logistics perspective, this shipping option used to be limited by the size and weight of the item being ordered, however, with new and improved logistics capabilities, these limitations are becoming a thing of the past.
With Amazon’s ability to deliver online purchases the same day, retailers are left scrambling to adjust their delivery offerings or be left in the dust. While some shoppers are still willing to wait several days or more for their online purchases to be delivered as long as shipping is free, these preferences are now shifting. The “Amazon Effect” has already demonstrated itself in Canada: more and more consumers are choosing quicker delivery times with a higher price point for shipping. Same day delivery becoming mainstream is yet another example of retailers having to adapt in order remain competitive. As more compelling online shipping options become available, consumers’ delivery expectations and purchasing criteria are changing. Consumers are now more likely to buy from an alternative source if the delivery option they are looking for is not being offered by an online retailer.
Delivery speed has become an integral part of the overall customer experience, and a major decision factor for online shoppers. This is especially true during the peak Holiday season: there is a significant correlation between delivery times and cart abandonment. Consumers take their business elsewhere if there is no guarantee that the purchased items will be delivered on time or the same day in some cases.
Another reason to add same day delivery as a shipping option is the opportunity to tap into the Canadian online “hyper-shoppers” that have been driving online growth over the last 5 years. Canadian “hyper-shoppers” are consumers who purchase online 25+ times a year. These shoppers seek out the best customer experience and clearly understand the difference between a good and bad online shopping experience. One of the key factors these shoppers take into that consideration is shipping speed. Being able to offer same day delivery is a clear competitive advantage with these types of shoppers, and can lead to a direct increase in overall sales and revenue.
And this preference isn’t just limited to hyper shoppers. The average online shopper’s habits and preferences are also impacted by delivery times and shipping options. As same day delivery becomes the “new normal” for e-commerce, shoppers often choose the convenience of getting the product they’ve ordered the same day over a lower price that another retailer is offering. Most customers are inherently impatient, so in many cases, the consumer is willing to pay a higher price, creating a business opportunity for the retailer to increase margins, which is especially important on low margin SKUs.
One of the biggest challenges retailers face when trying to implement these faster delivery times is dealing with limitations within their supply chain infrastructure. In order for same day delivery to be successfully integrated into the e-commerce logistics channel, it’s crucial to have a distribution centre in the city which you aim to provide the service to. For most online retailers it makes sense to start with Toronto as the largest Canadian market, then Vancouver or Montreal. Having a reliable 3PL partner can help reduce the gap with delivery times as they are able to facilitate same day delivery within city centers. Selecting a 3PL supply chain partner really is a make-or-break distribution decision, as the partner’s ability to set up a DC right in the metro area, quickly and accurately fulfill your e-commerce orders, and then ship them the same day will either enable or restrict your competitive capability.
Retailers have a short window of opportunity to step up to the plate when it comes to same day delivery. As more and more consumers are getting used to receiving their online purchases the same day, retailers who have not enabled this service will fall behind their competitors. Investing in your supply chain so that it supports this shipping option is vital to increasing your share in the e-commerce market. Logistics investments like this impact the entire organization, not just the profitability of the shipping department.
The most effective way to get to this point is by partnering with a 3PL provider who can help expand your delivery options, enabling same day delivery, and offer other solutions to make your current supply chain more efficient.
If you’re interested in learning more, book a no-obligation call with one of SCI’s e-commerce and retail experts. Discover how same day delivery can benefit your business and improve online customer and brand experience.