Survey shows growing gap between consumers and retailers on fast shipping

The gap continues to grow between consumer expectations for fast shipping and fulfillment services and retailers' capability to provide them, according to the results of an industry survey released today.

The American retail landscape has evolved quickly in the last twelve months, as Amazon.com Inc.'s Prime has become the benchmark that consumers expect for low-cost convenience and immediacy in e-commerce fulfillment, shipping software provider Temando said.

In order to meet those expectations and stay profitable in a challenging marketplace, retailers must offer multiple shipping options, according to Temando's "2017 State of Shipping in Commerce" report. The survey polled 270 small and medium and enterprise (SME) retailers and nearly 1300 consumers about a range of shipping-related challenges they face.

Offering multiple shipping options is a crucial ingredient for crafting a positive customer experience (CX), since consumers want more options to control their deliveries, allowing shoppers to dictate how, when, and where their products are shipped, San Francisco-based Temando said.

The survey showed that 41 percent of consumers want hyperlocal delivery and 38 percent would pay for it, but only 24 percent of retailers now offer that service. The gap may be starting to close, since another 18 percent of retailers said they would like to offer it in the next 12 months.

Likewise, 40 percent of consumers expect to access Amazon-prime style memberships in the next one to three years, but only 25 percent of retailers plan to introduce these services in the same period. And almost 100 percent of shoppers would like delivery date estimate, but more than half of retailers don't offer that feature.

"The State of Shipping in Commerce report shows the increasing significance of shipping and fulfillment, and highlights the continued gap between retailer capability and consumer expectation," Temando co-founder and CEO Carl Hartmann said in a release. "The missing piece for many retailers is a solution that balances CX-friendly shipping experiences with automation and efficiency."

Another disconnect between retailers and consumers occurs in the area of shipping expectations, the survey revealed. Retailers understand that consumers want free shipping, but they grapple with the tough reality of the rising costs of shipping online orders, Temando found.

The survey showed that 59 percent of shoppers said they would buy an item from a brick-and-mortar store instead of online if they perceive that the e-commerce delivery fee is too high. Despite that danger, 51 percent of retailers listed the rising cost of carrier services as a key challenge.

In fact, retailers complain they are hemorrhaging costs from trying to provide the quick shipping that shoppers demand. In an effort to preserve customer loyalty, retailers are experimenting with premium delivery services, but they often discover that operational barriers hold them back. As a result, retailers' adoption of that option has slowed down, even as customers demand it more than ever.

The impact is significant: 53 percent of the retailers surveyed in Temando's 2016 survey offered same-day delivery, but that figure slumped to 29 percent this year. Likewise, 34 percent of retailers in the 2016 survey offered weekend/afterhours delivery, compared to only 25 percent this year.

"Competition in e-commerce is not going to subside—in fact, the scale and speed of it is accelerating with the continued growth of Amazon and international shopping," Hartmann said. "It's not only U.S. consumers shopping abroad more, the number of cross-border shoppers globally is increasing. The retailers who can cross borders and use this changing landscape to evolve will be successful at e-commerce."