2-Day Fulfillment is the New Standard

Customer expectations are the demarcation between a poor shopping experience and an amazing one. Fall short of the line, your customer satisfaction and brand equity will fall. Go beyond the line, and you have an opportunity to convert that customer into a brand evangelist. When you make business decisions or pore through analytics, you should always ask yourself: Are we meeting the demands of our customers? If so, how do we exceed them?

When your customer is shopping online, he wants a store that’s descriptive and easy to navigate, no hidden fees revealed during checkout (shipping, handling, etc), and orders to arrive as soon as possible.

You can look through your site engagement metrics and pricing models to find answers to the first two, but for fulfillment, we have studies that confirm our natural assumptions – customers want their packages as fast and as affordable as possible.

Since the advent of Amazon Prime, we’ve seen a shift in customer expectation when it comes to receiving their orders. First, we can look at how many people have signed up for Amazon Prime since its inception – its main claim being unlimited 2-Day fulfillment with no extra fees at checkout, just an annual membership fee:

bii-sai-cotd-amazon-prime-subscribers-1 (1)

According to Business Insider, Amazon was about to tally around 57 million Prime subscribers at the advent of 2015. The lure of unlimited 2-day shipping began spiking in 2013, and now customer expectations are beginning to shift to what Amazon can provide instead of what the market at large is providing. Backing this claim is the gradual penetration of Prime users on other eCommerce platforms according to research done by Millward Brown Digital:

Percent-of-Prime-Member-Penetration-at-Retailers

 

In the graph above, you can see that almost 1 out of 10 shoppers on Walmart.com, ToysRUs.com, and HomeDepot.com are also Amazon Prime members. This statistic becomes even more stark when you see the rate of cross-shopping between all Prime members and these same stores:

Cross-Shop-Rate-from-Amazon-to-Retailers2

0.9% of all Prime members are willing to cross-shop between these same retailers on the same session. So even when Prime members make up 10% of shoppers on certain retailer’s sites, it seems Prime members shop almost exclusively with Amazon. The ease of use and convenience of Prime is a pretty compelling reason. Customers are now accustomed to receiving their packages in two days or less without paying extra at checkout.

Like it or not, this the new standard of fulfillment, because today’s customer will carry most of that expectation when shopping on other brands. It’s why many online stores are offering more expedited shipping options at reasonable rates, so that they can compete on equal ground.

Of course, it’s a vast undertaking to cobble together the logistics and scale to balance expedited and free shipping without eating into your profits. You can’t get one without sacrificing the other, not unless you invest truckloads of capital into developing your own nationwide fulfillment network (on top of that, that network has to integrate seamlessly with your store and inventory pieces).

When you’re a growing brand, it’s a daunting task to build the logistics on your own. Unless you’re backed by a ton of capital from investors, you’ll most likely have to find a provider or a partner that already has these logistics in place. So when looking for a partner, you should look for these key traits to see if they’ll do the job for you:

  1. The smarter network that’s truly “nationwide.”

Your logistics partner shouldn’t just have warehouses all over the country, they also need the analytics and tools necessary to ensure the fastest deliveries at the cheapest rates. If you want to offer 2-day shipping at an affordable rate to all of your customers, you need a partner capable of such things as inventory load balancing and delivery analyses to know which warehouses to stock in order to achieve affordable 2-day shipping to your customers. A vast network matters, but a smart network is even more important.

  1. Pricing matters

It’s an obvious thing to look out for, but it is an important factor. Whatever your fulfillment partner is charging you, you have to decide to pass on those costs to the customer or absorb them in order to offer discounted or free shipping. Also keep in mind, free shipping (the kind that stays free and doesn’t show up later in the subtotal) is a very powerful driver for successful checkouts. Reports say that 20% of consumers believe “free shipping” is the most compelling reason to shop with a specific retailer.

  1. Consider your brand

With some 3PL or Fulfillment-as-a-Service solutions, you won’t be able to maintain branding of your packaging. They either won’t support customized packaging, or they might insist on applying their own branding in lieu of yours. Remember the value of expressing your brand at the fulfillment stage of the customer experience. This is another important touchpoint you have with your customer, and it can be the tipping point that can convert customers from regular shoppers to brand loyalists.

Your customer’s loyalty and desire for your products is the lifeblood of your business, which makes it even more important to think of innovative and scalable ways to exceed their expectations. You shouldn’t have to sacrifice your revenues to keep your customers happy, which is why choosing the right partner and making the right fulfillment decisions can be a make-or-break moment for your brand.

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