Date-certain shipping is the new holiday imperative for retailers

Discussion
Photo: Fedex
Nov 06, 2017
Manish Chowdhary

FedEx, UPS and the U.S. Postal Service all give merchants access to a range of shipping service types — next day, two-day, three-day, ground and more. Amazon.com, to its advantage, presents order delivery options in a different fashion, offering date-certain shipping. Instead of guaranteeing the type of shipping (e.g., next day air), Amazon guarantees the delivery date.

With over 90 million active Prime memberships in the U.S. and with Amazon capturing close to half of all ecommerce revenue, most American shoppers are accustomed to having delivery date choices. Executed effectively, the approach increases conversions and reduces shipping costs — excellent reasons to offer date-certain shipping.

Following is an Amazon Prime checkout example:

Guaranteed delivery date: Sept. 21, 2017 if you order in the next one hour and 12 minutes:

  • Tomorrow, Sept. 20: $5.99 – One Day Shipping
  • Thursday, Sept. 21: FREE – Two-Day Shipping
  • Tuesday, Sept. 26: FREE Standard Shipping
  • Thursday, Sept. 28 FREE: No-Rush Shipping – Get a $10 reward to use at Amazon Restaurants

By creating a sense of urgency, conversions will increase. The countdown clock appeals to emotion and increases the desire to buy now. Conversion rates also increase because, with all the shipping choices, more shoppers will be likely to find a convenient delivery date.

Date-certain shipping reduces shipping expenses, too. The two later date options (Sept. 26 and Sept. 28 in the example above), one of which offers an incentive, attract shoppers who are willing to wait to earn the extra reward. Also, with no specific service type promised by name (e.g., UPS 2nd Day Air), some short distance orders can use less expensive ground shipping and still meet the delivery deadline.

Also, accessorial charges decline since more customers are likely to be available to accept the delivery on a pre-selected date, thereby reducing re-delivery attempts and parcel storage charges. The next-day option funded by the customer helps convert shoppers who need the item urgently.

Retailers that offer date-certain shipping will have a more cheerful holiday season with higher conversions and lower shipping expenses. It’s an important strategy to consider for those that don’t will risk losing more ground to Amazon.

DISCUSSION QUESTIONS: Do you agree that date-certainty is the best approach for online retailers? Are consumers looking for information on which carrier will be used when choosing a delivery option? Which shipping options will become more popular in 2018, and which ones will lose prominence?

Braintrust
"I think delivery is going to become a bigger issue than a 15 cent discount on an item. I want it when I want it."
"I’m still waiting to see how these instant delivery services play out in urban areas and if they take off or are just to expensive to operate."
"I think we will continue to see a shift towards “date-certainty” with the ability for retailers to more effectively deliver on that promise."

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12 Comments on "Date-certain shipping is the new holiday imperative for retailers"

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Shep Hyken
BrainTrust

“Date-certainty” can create confidence. The key to creating this confidence is to keep the consumer informed with the ability to track their shipment.

The most popular option will be the one that that gets the merchandise to the consumer when they want/need it.

Paula Rosenblum
BrainTrust

I don’t always buy from Amazon. And sometimes it’s completely okay if it’s a three-day rather than a two-day delivery. But I do expect to be given that “date-certain.” For many reasons.

I think delivery is going to become a bigger issue than a 15 cent discount on an item. I want it when I want it. Sometimes that’s today … other times that can be next week. I think it’d be great to be accommodated.

Neil Saunders
BrainTrust

The best approach to shipping is to offer a variety of options, with the more flexible ones attracting greater fees. Consumers can then pick what works best for them, without feeling overcharged. It also helps retailers prioritize what to deliver when.

All that said, even the chargeable options rarely cover the true costs of fulfillment. So this remains a margin depleting area of retail.

Max Goldberg
BrainTrust

Date-certain shipping is the way to go for most retailers, provided that the delivery services can hit the targeted dates. Date-certain allows retailers to choose the most cost-effective means of shipping, and the opportunity to incent consumers to use the least expensive way to ship. As usual, Amazon leads the way and all other retailers are trying to catch up.

Bob Amster
BrainTrust

“Date-certainty” is a dangerous game to play. Anything can be done at a price (e.g. using couriers), but that option is not cheap. The consumer should make the determination as to how much it is willing to pay for what level of service. If the cost of delivery is not built into the price of the product, plus the delivery charge, it will eventually hurt the retailers significantly. How long can any company afford to reduce the margins necessary to remain profitable?

Steve Montgomery
BrainTrust

I believe consumers are more interested in the date the item will arrive than if it will be delivered by USPS, UPS or FedEx. However, I can foresee times when that information would be of value. For example, we know USPS will deliver by 1 p.m. most days while with FedEx and UPS it will be in the 5 p.m. to 7 p.m. range. Depending on the item it may be important to be there or not.

I believe Shep said it best: The shipping option that meets the consumer’s need is the best one.

Seth Nagle
BrainTrust

From talking with my peers I think the date notification shipping is ideal as it lets you plan accordingly and order items before event dates and have the confidence they will show up.

I have noticed on Amazon that I’ll order two-day shipping but the package won’t be ready to ship for a few weeks. This allows me to cancel the item quickly and avoid a customer service call a few days later.

I’m still waiting to see how these instant delivery services play out in urban areas and if they take off or are just to expensive to operate.

Ralph Jacobson
BrainTrust

Yes, this is important. Pretty much the most important aspect of shipping goods of any kind. Kinda funny that I am actually awaiting the delivery of a “guaranteed two-day shipping” item that is delayed at least two more days as we speak … and it ain’t even CLOSE to holiday crunch time. All merchants better be taking these delivery promises seriously.

Jackie Breen
BrainTrust
“Date-certainty” is the best option for online retailers because it effectively aims to manage consumers’ expectations. A customer that knows exactly what to expect is less likely to call customer care with questions and is more likely to have a pleasant buying experience (and in turn, become a repeat purchaser). In regards to carrier, while a majority of customers may not have a preference, customers that live in rural areas may opt for delivery directly to their door, rather than having to pick up at the post office, for example. As we move into 2018 and new delivery options come… Read more »
Larry Negrich
BrainTrust

Yes, an option that allows the consumer to receive merchandise when they would like to receive it is the best option. The last-mile is still a challenge in many areas of the country.

Robert DiPietro
BrainTrust

Date certain shipping is the best approach for online retailers. Consumers don’t care whether the delivery option is Fedex/UPS/USPS, they care about when and how much. They also want to track the shipment!

Craig Sundstrom
Guest

I’m not clear that I see a difference between offering, say, “two day shipping” and saying “if you order this now and choose ‘two day,’ you’ll have it by … well, two days from now.” If the point is that one is simply a passive remark while the other is a “guarantee,” then my response would be that therein lies the problem: what happens when “guaranteed” 2 days becomes three (or more)? Execution is always the devil in the details with online shipping.

wpDiscuz
Braintrust
"I think delivery is going to become a bigger issue than a 15 cent discount on an item. I want it when I want it."
"I’m still waiting to see how these instant delivery services play out in urban areas and if they take off or are just to expensive to operate."
"I think we will continue to see a shift towards “date-certainty” with the ability for retailers to more effectively deliver on that promise."

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