Date-certain shipping is the new holiday imperative for retailers
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?