For Shoppers, Fulfillment Cost Is More Important Than Speed

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For Shoppers, Fulfillment Cost Is More Important Than Speed

By Tim Denman - 11/08/2017

As retailers continue to invest to modernize and supercharge their supply chains they need to remember costs are far more important to consumers than speed. Most shoppers are willing to wait a little longer for free shipping than pay to quicker delivery.

Deloitte’s 32nd Annual Holiday Survey explores this trend and other hot issues including why shoppers chose click-and-collect, returns trends and overall shopping preferences.

“It only took a few holiday seasons for people to change their expectations of retailers throughout the entire shopping journey — from search and inspiration to product variety, availability and price, to delivery and even returns,” said Rod Sides, vice chairman, DeloitteLLP and U.S. retail, wholesale and distribution leader. “The online experience has also redefined people’s expectations of the physical store. At one time, online excelled primarily on price followed by convenience, but now, it’s outpacing the store experience across all attributes during the holiday season.”

More than 5,000 consumers participated in the survey ― conducted online by an independent research company in September 2017. The full survey results is available here ―a quick look at the most intriguing results from the study is below:

Free shipping is key:

  • 88% of consumers report free shipping is vital, compared with just 12% who prefer fast shipping.
  • 54% of holiday shoppers define fast shipping as two days or less. 35% consider three to four day shipping fast, down from 42% last year and 63% in 2015.
  • 64% say they would not be willing to pay extra for two-day shipping. Respondents indicated they would pay, on average, just under four dollars ($3.80) to guarantee next-day delivery.

Buy online, pick up in-store:

  • 43% of consumers plan to buy items online and pick them up in-store this holiday season. These shoppers cited saving on shipping charges (62%) as the number one reason to buy online and pick up in-store, followed by 48% who said they do so to get the item faster.
  • Home appliances (45%), electronics (43%) and clothing (43%) top the list of categories shoppers plan to buy online but pick up in the physical store.

 Returns:

  • People also want the security and flexibility of generous return policies. The option to return to any store location (67%) tops the list, followed by refund options other than store credit (63%).
  • 51% want a longer return window around the holidays, ranging from 30 to 90 days, and 41% want the option to return without a receipt.

 Convenience and selection:

  • 51% of shoppers’ budgets is going toward online purchases, versus in-store, 42%.
  • Online shopping significantly outpaces in-store in areas such as ease of searching (79% vs. 64%) and product quality and trust (76% vs. 64%).
  • Online shopping destinations are the number one preferred venue among all age groups and income levels, followed by mass merchants.