E-commerce is a fast paced environment and improving conversion rates is a vital part of success for any online retailer and Delivery Options and Delivery Charges should be part of an E-commerce strategy.
E-Com Delivery Facts :
- About 70 percent of all online retailers offer next day shipping.
- One-fifth of all e-commerce sites offer free standard delivery.
- About 40 percent of all online retailers now offer international delivery options to countries in the rest of Europe and other parts of the world. Prices for shipping to the United States are at an all time low.
E-commerce Delivery Options and E-commerce Marketing Strategy
Almost 80 percent of all online retailers give consumers more than one choice in delivery options. In 2006, only about 20 percent of retailers gave their customers more than one choice. The most common shipping options offered by e-commerce businesses are standard shipping, which typically means three to five days for delivery, next day delivery and Saturday delivery. The majority of retailers offer just two delivery options; however, 23 percent of all online retailers offer three shipping options, which is more than double the number of companies that provided three choices in 2006. Compared with previous years, less retailers are offering more than seven options in 2013, which may mean that giving consumers too many choices is counterproductive. 81 percent of retailers who made the IMRG-Hitwise Hot-Shop List in 2013, a list composed of the top hundred retailers, offer three delivery options. These retailers include Amazon, Marks and Spencer and Zara.
While this may signal that the best number of shipping options is three, this number may be affected by the industry a particular retailer works in. For example, businesses in the grocery, wine and electronic sector may want to consider more flexibility. One-third of companies in the grocery and wine industry offer four delivery options including standard, next day, nominal and Saturday delivery.
E-commerce sites that sell electronics offer more options than any other sector with about 38 percent offering five or more delivery choices.
Next Day and Nominated Delivery Options
68 percent of all retailers offered next day delivery in 2013, which is 7 percent more than in 2012. However, nearly all retailers who sell business to business products offer next day delivery options. Nominated delivery is when customers have the choice of choosing their date of delivery of a product or service. 23 percent of retailers offered nominated day delivery in 2013; however, this is a four percent increase from 2012. Large e-commerce sites are far more likely to support this option. In fact, about 43 percent of companies in the IMRG Hitwise Hot-Shop List provided customers with this option, which is the same as in 2012. Businesses in the grocery and wine sector are more likely to offer nominal delivery with about 44 percent of grocers allowing customers to pick a time and day of their delivery. This type of option is also gaining some popularly with retailers in the sport sector with about 13 percent offering this choice compared to nearly 0 percent in 2012.
Almost no business to business e-commerce sites and entertainment retailers offer nominated delivery.
Saturday Delivery Options
Saturday delivery options are common with e-commerce retailers, and about one-third of all retailers offer consumers this option. However, this number hasn’t grown since 2012. Large retailers are more likely to offer Saturday delivery choices. About 46 percent offer this choice compared with 33 percent of all retailers. Additionally, most grocery retailers offer this choice. It’s also popular in the children’s sector with 57 percent of businesses in this industry offering Saturday delivery.
Same Day Delivery Options
Same day delivery options are on the rise; however, just 6 percent of online retailers offer this choice. 6 percent of large retailers on the IMRG list offered same day delivery compared with 6.4 percent of all retailers in 2013; consequently, small retailers are slightly more likely to give customers this choice. Many businesses that offer this shipping service are in the fashion industry.
Businesses with the resources to provide consumers with same day delivery are beginning to incorporate this choice.
BFPO (British Forces Post Office)
A handful of retailers allow delivery options to BFPO addresses. About 24 percent of all retailers give consumers this delivery option. Large retailers are more likely to provide this choice. There was a 12 percent increase in 2013 of BFPO supported deliveries compared to 2012.
The gift sector is leading the way with this option, and more than 20 percent of gift retailers offer BFPO address delivery choices.
E-Commerce Delivery Charges
Retailers vary on delivery charges depending on when products and services need to be delivered and where. Shipping costs have a large impact on whether a customer will by a service or product. Consequently, it’s crucial that e-commerce sites are mindful to these prices in order to remain competitive in their sector.
Standard Delivery Charges
About 30 percent of all retailers charge £3 to £3.99 for standard shipping. There has been an increase in the number of e-commerce companies giving consumers free delivery options. Typically, free delivery is provided for standard shipping. Large retailers from the IMRG list are far more likely to offer customers free delivery on products with about 25 percent giving consumers this option compared to 20 percent of all retailers.
While most industries saw an increase in free delivery options for standard shipping, those in the entertainment, home and electronics sector saw a decline in free delivery in 2013. The entertainment industry alone had free delivery decrease from 66 percent in 2012 to 29 percent in 2013.
The most dramatic increase in this option occurred in the health sector with about 35 percent offering consumers free shipping on standard delivery, which is 25 percent more than in 2011.
Next Day Delivery Charges
Online retailers vary in their prices for next day delivery; however, about a quarter of retailers charge between £5 to £5.99 for this service. Those in the fashion industry charge from £0 to £15 for next day shipping. Some businesses also offered free next day shipping, although this number decreased from from 7 percent last year to 2 percent this year.
The most popular industries for free next day shipping were those selling groceries and electronics.
Nominated Delivery Charges
Charges for a specific date and time have increased since last year by 15 percent. Many retailers are recognizing the value of this service and may even increase profits by providing customers with this option. Prices varied; however, nominated delivery choices increased in all industries except for electrical retailers, which saw a decline in this option. Grocery retailers charged the least for this service compared with other sectors, and more than 80 percent charged less than £5 for nominated delivery in 2013.
Business to business retailers charged the most for this service with about 33 percent charge from £1 to £15.99 for small and medium deliveries in 2013.
Saturday Delivery Charges
Saturday delivery is one of the three most popular delivery options. About a quarter of all e-commerce retailers charge £8 to £9.99 for this service. On average, large retailers charged less for Saturday delivery than small retailers in 2013. Moreover, about 18 percent of large retailers charged just £5 and over 80 percent charged less than £9.99 in 2013.
Europe & International Delivery Charges
Shipping costs to countries in Europe typically depend on the size and weight of a particular order and where the items are being delivered to. Most packages sent to countries in Europe cost from £5 to £8.99 for shipping. About seven percent of retailers offered free standard delivery to Europe, which was a slight increase from last year. Many e-commerce businesses calculate delivery prices on the European continent based on regions. It’s worth noting that about 29 percent of businesses in the health sector offered free delivery to Europe. The cost of shipping to the United States typically ranged from £11 to £24.99 in 2013.
About 78 percent of all retailers charged £14.99 or less for shipping to America. Only about two percent of large retailers offered free shipping to the United States in 2013.
Flexibility in E-commerce Delivery Options
Staying competitive in e-commerce often involves providing customers with flexible options. Below are some of the trends involving flexibility with regards to delivery options.
The majority of retailers chose 12pm to 2:30pm as the cutoff time for placing orders. Larger retailers were more likely to have later order placing deadlines with about 20 percent accepting orders until 6pm for processing on the same day in 2013. About 80 percent of business to business e-commerce companies have a cutoff time at 4pm.
Many retailers require that first orders be delivered to a billing address. Only one major retailer requires orders to be delivered to the same address compared with 13 percent of large retailers in 2008. Most of the retailers that use this rule sold items in the electrical sector. Additionally, only about ten percent of online retailers permit customers to place a single order for delivery to a variety of addresses. The number of retailers allowing split deliveries has decreased among large retailers, and most businesses that offer this service are in the grocery and gifts sector. Furthermore, the retailers most likely to allow customers to collect items from a store were grocery retailers with about 70 percent offering this service.
This is a 50 percent increase from 2012. Only about 18 percent of those in the clothing industry provided this service.
About 20 percent of e-commerce businesses don’t deliver outside the UK, which has decreased by about 17 percent from 2012. Delivery to the United States has increased with about 38 percent of all online retailers offering this delivery option. Large retailers are less likely to deliver outside the USA, although this number has been declining. Finally, almost all companies in the gift sector deliver overseas.
Only about a quarter of retailers give customers the chance to provide special instructions to e-commerce retailers. Larger retailers are more likely to provide this option with about 38 percent doing so. Nearly all grocery online retailers provide customers with this choice. In addition, only about 18 percent of retailers offer a gift wrapping option, which is down form 26 percent in 2012 suggesting that gift wrapping might not be too important for consumers.
On-Site Delivery Information
About half of all online retailers are providing details on delivery costs and time at the bottom of their site. Almost 60 percent of larger retailers had links to this information both at the top and bottom of their homepage. About 70 percent of retailers showed delivery charges on the product page, which is up 43 percent from 2012.
Only about ten percent of companies require consumers to log in or create an account before delivery charges are displayed, which has decreased by 20 percent from 2009. There was no significant change regarding order tracking from 2012 to 2013, and a vast majority of retailers offer customers this option. About 20 percent of all packages from online retailers requires a signature upon delivery, and about three-fourths of these orders informed customers on their website that this was required.
Mobile communication has become an important part of e-commerce. About 15 percent of online retailers send customers text messages alerting of delivery, which is up 4 percent from 2012. About 19 percent of large retailers provide this service, and 38 percent of electrical retailers use SMS messaging to inform customers regarding orders. Customer service has been declining in this industry. Only about 5 percent of e-commerce businesses respond to email queries within the same day compared to 47 percent in 2012. Additionally, 37 percent of emails are never responded to. About 71 percent of calls are answered, up from 67 percent in 2012. Finally, many companies have been using Twitter as a means to communicate with customers.
About 47 percent of retailers respond to queries regarding orders via a direct tweet compared with just 12 percent in 2012.
There hasn’t been any significant changes with regards to delivery times in the e-commerce industry from 2012 to 2013. About 39 percent of all orders arrive within two days. Larger retailers tended to have faster delivery times than smaller retailers by 5 percent in 2013. Business to business operations perform well, and about 46 percent of these retailers deliver products and services by the next business day.
￼￼Online businesses may want to make changes to their e-commerce delivery options although some alterations are not necessary. For instance, while it helps to provide customers with more than one delivery option for products and services, providing customers with more than three or four options can be overwhelming and counterproductive. At the same time, many changes in delivery strategies will be affected by the industry a particular company sells products for. Many grocery e-commerce sites provide seven or more delivery options, and this has worked well in that sector.
Staying on top of user experience and understanding customer needs are the keys to staying competitive in e-commerce.