Consumers are not the only cost-conscious party in the eCommerce and retail world these days; retailers are having to spend budget wisely and contain and lower costs wherever possible. For consumers, saving money often looks like focusing on the best price and overall best deal (price + shipping cost/speed + return policy) from a brand. Some shoppers are buying less or choosing generic labels. Overall, shoppers can pick and choose when and where they spend budget. Not so for retailers.
Retailers must be judicial in how and where they adjust spending so that the customer experience and brand reputation is not damaged. This often means cutting backend processes or introducing automation to quietly lower costs without shoppers feeling an impact. But retailers have had to take some bolder actions since the pandemic and are examining how they can cut costs in shipping. Many have weighed the risk of shifting customers away from everything free and fast and are making dramatic changes. Surprisingly, shoppers have been mostly okay with it. But there are some customer expectations that underlie why and when they’re okay with it – and when they’re not.
Let’s take a look at how much consumers value shipping options. In a recent survey, Radial found that 3 out of 4 online consumers say that brands’ shipping options (cost and timing) are extremely or very important in determining whether they will shop with a brand.
- 75% of shoppers say shipping options are extremely or very important in determining where they shop
So, making changes to these policies definitely comes with a high risk of losing customers to brands with more amicable policies. That said, retailers are taking the plunge.
Our study found that in the last 12 months, 85% of retailers have adjusted their shipping policy to boost profitability.
What have they done to do so?
- 43% raised the dollar threshold for free shipping
- 32% eliminated free shipping
- 26% lengthened the shipping window for free shipping
Those are significant numbers, which may reflect an industry-wide trend that will establish and bolster a new set of expectations for customers. But how have customers reacted?
Only 5% of retailers say they have lost customers due to changing the shipping policy.
Consumers have not abandoned their desire for free shipping – in fact, they continue to pursue those options. Retailers report that 73% of shoppers choose longer shipping windows to get free shipping and 57% will increase spend to qualify for free shipping.
While they may choose longer shipping windows, 60% of consumers report that 3 to 5 days is the longest delivery timeframe that is reasonable. Retailers need to understand this threshold as it is likely a point of attrition for customers that cannot be guaranteed delivery within it.
Consumers are willing to accept modified shipping policies if brands offer multiple eCommerce fulfillment options:
- 43% expect the ability to pick up in-store or curbside
- 41% expect a dollar threshold to qualify for free shipping
- 39% expect the ability to join a loyalty program to get free shipping
- 39% expect free returns
It’s critical that retailers understand that these expectations underpin why consumers are willing to accept altered shipping policies.
If free shipping is not available at all, 50% of consumers are willing to pay for it and expect an economy shipping option.
For eCommerce retailers that may struggle with managing new shipping policies and how to meet customer expectations within those new policies, a fulfillment partner like Radial, can provide the expert guidance, streamlined omnichannel order fulfillment process, and proven ability to meet customer’s expectations for a great shipping and delivery experience.
Learn what Radial can do for your shipping.