When Amazon Prime first started offering free 2-day shipping in 2004, it set a new competitive benchmark for the ecommerce sector. Fast forward to 2021, and 2-day shipping has gone from being a value-added extra to a consumer expectation - much to the dismay of independent online sellers.
This is often referred to by industry insiders as the ‘Prime Effect’ (for obvious reasons). It’s created a huge amount of pressure for digitally-native brands to compete with vast online marketplaces - or else risk becoming irrelevant.
So, what does this mean in a landscape where instant gratification has become the norm? Believe it or not, it’s entirely possible to offer 2-day shipping as a small to medium-sized ecommerce business. Continue reading to find out how!
2-day shipping is exactly what it sounds like; it’s a delivery offering where consumers receive their online order within two days of placing it via a website or mobile app. For this to be possible, your business will need to ship orders the same business day they’re received, though this will depend on the sophistication of your warehousing and order fulfillment strategy.
So, why has 2-day shipping become a must-have offering? As well as being driven by the likes of Amazon Prime, it’s also the result of customer experience (CX) becoming one of the biggest brand differentiators.
As the ecommerce marketplace becomes more saturated, it’s more and more difficult for merchants to stand out based on their products alone. This especially affects branded retailers who purchase inventory from wholesale sellers, and so are constrained by the pricing and promotional tactics of competing vendors.
In this climate, a positive customer experience is what will separate your brand from the rest of the pack.
Let’s look at a few stats:
The verdict is clear; in 2021, your shipping strategy is virtually inseparable from your overall customer experience. So, if you’re going to be competitive in the marketplace, you need to up your shipping game.
Besides meeting customer expectations, 2-day shipping offers digitally-native brands a variety of other benefits, such as:
As we mentioned above, the simple truth is that consumers now expect retailers to offer the same (or better) service than the big ecommerce players. The standard for what constitutes ‘fast’ delivery is rapidly changing, with 1-day or even same-day delivery increasingly becoming the norm.
For this reason, anything less than a two-day shipping option is likely to be considered inefficient by consumers - and may push them to shop elsewhere.
In ecommerce, positive delivery experiences have become central to customer retention. According to Convey, a whopping 98% of customers say that delivery has an impact on their loyalty towards a brand. Faced with increased competition and growing customer acquisition costs, having a strong base of repeat customers has never been more important for merchants.
In short, if a customer’s delivery experience is disappointing, you’re probably not going to see them again. But if you get it right, they’ll be far more inclined to stick with your brand than to experiment with an unknown competitor.
Shopping cart abandonment is a major issue in ecommerce, and adds up to a lot of lost revenue. While there are many reasons for this, high shipping costs is one of the biggest factors. According to Annex Cloud, 61% of consumers cite ‘extra costs’ as being the main reason for abandoning an online order. In sum, offering fast and free shipping to your customers is an easy strategy for reducing cart abandonment.
There’s a widespread misconception that it simply isn’t possible for small or medium-sized ecommerce businesses to offer 2-day shipping without drastically reducing their profit margins. Because of concerns over the price of shipping, many merchants write it off as an option - and struggle to stay competitive.
It’s important to consider the ways that fast shipping can help to reinforce your bottom line. For all the reasons outlined above, it will help you to increase both your order volumes and average order values, allowing many merchants can offset this cost relatively easily.
Partnering with an experienced ecommerce fulfillment provider like Whiplash is a major advantage for businesses who are looking for an efficient and cost-effective 2-day shipping strategy:
Naturally, it’s the upfront shipping costs which hold back a lot of merchants from adopting a two-day shipping model. However, 3PLs have a major advantage in this area over standalone businesses. Due to their high shipping volumes, they have the ability to negotiate much lower carrier rates than are usually available on the market - thus saving their clients considerable expense.
When it comes to fast shipping, it’s the so-called ‘last mile’ that makes all the difference to whether a parcel is delivered on-time. This is where the majority of logistical issues take place, as one-size-fits-all transportation policies are difficult to action for individual home delivery - hence the industry expression ‘the last-mile problem’.
With their superior infrastructure, well-resourced 3PLs can alleviate a lot of last-mile headaches by deploying a multi-node fulfillment strategy. This puts goods as close to the end customer as possible, saving both money and valuable time in the delivery process.
Even with an extremely efficient shipping strategy, you still need a well-coordinated fulfillment process if your customers are going to receive their orders within a two-day window.
Unlike self-fulfillment operations, 3PLs are able to invest regularly in the latest technologies to facilitate even faster turnarounds. Innovations such as AI and automation within the picking and packing process can be used to further streamline the order fulfillment process - allowing you to meet (and even exceed) customer expectations.
The rise of 2-day shipping (and faster forms of delivery besides) certainly pushes merchants to keep streamlining their shipping and order fulfillment strategies - but there’s a lot to be gained by meeting consumer expectations in an intensely competitive sector. It’s no secret that satisfied customers means more sales - which means more revenue for your business.
If you’re interested in how a 3PL may be able to help you achieve that 2-day shipping target, talk to us today!