Shipping and Delivery Trends of the Top 50 Retailers · Shipping and Delivery Trends of the Top 50...
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Shipping and Delivery Trends of the Top 50 Retailers Between consumers’ rising expectations and the shift towards unified commerce, retailers face many significant challenges when it comes to profitably fulfilling eCommerce orders. From capacity problems at distribution centers and increased shipping costs to the demand for faster delivery and issues with optimizing the supply chain, many retailers are struggling to fulfill the promises they make to their customers. With so many challenges to overcome across all areas of their business, we wanted to know how retailers are responding to their customers’ rising shipping and delivery expectations. To find out, SmartHub, an autonomous division of Radial that studies retailers and shopper behavior, conducted a study of 50 of the leading eCommerce retailers that shape consumers’ online shopping expectations. Our findings show how the Top 50 retailers are approaching the complex, ever-evolving omnichannel strategies designed to improve shipping and delivery. Check out the infographic below for key insights. Shipping and Delivery Trends of the Top 50 Retailers Shipping And Delivery Most consumers prioritize free shipping over fast shipping, but only 66% of the Top 50 retailers offer free shipping as a standard policy. Free Shipping Customer expectations make it difficult for retailers to remove free shipping once it is offered. Some retailers, however, change their free shipping minimum throughout the year as part of a larger promotional strategy. Ground 52% Next Day 1% 2 Day 4% 3 Day 6% Other 5% Consolidated 32% Looking at retailers’ shipping locations, despite the benefits of using regional distribution centers to more efficiently fulfill orders to their customers, only 23% of retailers have a regional distribution model. Despite the growing popularity of retailers splitting their inventory between an east coast and a west coast distribution center or omnichannel shipping, a high number of the Top 50 retailers depend on one facility to fulfill eCommerce orders. East Coast Central U.S. West Coast East Coast West Coast 73% 20% 7% 50% 18% 32% The low rate of Split Shipments that we’ve observed in 2016 is being driven by demand from carriers to ship efficiently. The standard corrugated box accounts for more than 50% of orders, even though multiple packaging options exist. Regional fulfillment centers can help retailers to alleviate this issue. Days in Transit Delivered within 24 Hours of Ordering Next Day 2 Days 3 Days 4 Days 5 Days 6 or More Days East Coast West Coast 0% 18% 45% 22% 10% 3% 2% 3% 12% 22% 12% 12% 6% 33% 7% 7% 25% 5% 5% 51% 3-fold Corrugate Mylar/Tyvek Bag Padded Mailer Paper Mailer Bag Standard Corrugate Box Other East Coast vs. West Coast Retailers’ Packaging Preferences Depending on inventory availability at stores, many omnichannel retailers split customers’ orders into two or more packages from different store locations or distribution centers. Single Shipment using 1 box 82% 18% Split Shipment using 2 or more boxes Rising shipping costs along with using multiple packages for a single order are key reasons why many retailers still struggle to make omnichannel fulfillment profitable. A NOTE ON THE STUDY We conducted our shipping and delivery study of the Top 50 retailers in the spring of 2016. All of the participants come from a mix of omnichannel and online-only retailers, and have online revenues that exceed $400 million. All of them are listed in the Internet Retailer Top 500 largest eCommerce sites in North America, and are selected from the following six categories: apparel, electronics, health and beauty, housewares/home improvement, mass merchant, and specialty. www.radial.com [email protected] 1-877-255-2857 © 2016 Radial, Inc. or its subsidiaries. All rights reserved. Radial and its logo are trademarks of Radial, Inc. Ground vs. Consolidated Shipping The Top 50 retailers use ground service to deliver over half of their orders. While the majority of retailers still prefer ground service, low-cost consolidated shipping services such as SmartPost and SurePost are gaining in popularity. Split Shipment Shipping Time Origin Delivery Destination All orders 16% On orders less than $24.99 2% On orders between $25.00 and $49.99 16% On orders between $50.00 and $74.99 12% On orders between $75.00 and $99.99 14% On orders over $125 6% No free shipping 34%
Transcript of Shipping and Delivery Trends of the Top 50 Retailers · Shipping and Delivery Trends of the Top 50...
Shipping and Delivery Trends of the Top
50 Retailers Between consumers’ rising expectations and the shift towards unified commerce, retailers face many significant challenges when it comes to profitably fulfilling eCommerce orders. From capacity problems at distribution centers and increased shipping costs to the demand for faster delivery and issues with optimizing the supply chain, many retailers are struggling to fulfill the promises they make to their customers.
With so many challenges to overcome across all areas of their business, we wanted to know how retailers are responding to their customers’ rising shipping and delivery expectations. To find out, SmartHub, an autonomous division of Radial that studies retailers and shopper behavior, conducted a study of 50 of the leading eCommerce retailers that shape consumers’ online shopping expectations.
Our findings show how the Top 50 retailers are approaching the complex, ever-evolving omnichannel strategies designed to improve shipping and delivery. Check out the infographic below for key insights.
Shipping and Delivery Trends of the Top
50 Retailers
Shipping And Delivery
Most consumers prioritize free shipping over fast shipping, but only 66% of the Top 50 retailers offer free shipping as a standard policy.
Free Shipping
Customer expectations make it difficult for retailers to remove free shipping once it is offered. Some retailers, however, change their free shipping minimum throughout
the year as part of a larger promotional strategy.
Ground52%
Next Day1%2 Day4%3 Day6%Other5%
Consolidated32%
Looking at retailers’ shipping locations, despite the benefits of using regional distribution centers to more efficiently fulfill orders to their customers, only 23% of retailers have a regional distribution model.
Despite the growing popularity of retailers splitting their inventory between an east coast and a west coast distribution center or omnichannel shipping, a high number of the Top 50 retailers depend on one facility to fulfill eCommerce orders.
East Coast
Central U.S.
West Coast
East Coast West Coast
73%
20%
7%
50%
18%
32%
The low rate of Split Shipments that we’ve observed in 2016 is being driven by demand from carriers to ship efficiently.
Split Shipment
The standard corrugated box accounts for more than 50% of orders, even though multiple packaging options exist.
Regional fulfillment centers can help retailers to alleviate this issue.
Days in Transit
Delivered within 24 Hours of Ordering
Next Day
2 Days
3 Days
4 Days
5 Days
6 or More Days
East Coast West Coast
0%
18%
45%
22%
10%
3%
2%
3%
12%
22%
12%
12%
6%
33%
7%
7%
25%
5%
5%
51%
3-fold Corrugate
Mylar/Tyvek Bag
Padded Mailer
Paper Mailer Bag
Standard Corrugate Box
Other
East Coast vs. West Coast
Retailers’ Packaging Preferences
Depending on inventory availability at stores, many omnichannel retailers split customers’ orders into two or more packages from different store locations or distribution centers.
Single Shipment using 1 box 82%
18%Split Shipment
using 2 or more boxes
Rising shipping costs along with using multiple packages for a single order are key reasons why many retailers still struggle to make omnichannel fulfillment profitable.
A NOTE ON THE STUDYWe conducted our shipping and delivery study of the Top 50 retailers in the spring of 2016. All of the participants come from a mix of omnichannel and online-only retailers, and have online revenues that exceed $400 million. All of them are listed in the Internet Retailer Top 500 largest eCommerce sites in North America, and are selected from the following six categories: apparel, electronics, health and beauty, housewares/home improvement, mass merchant, and specialty.
© 2016 Radial, Inc. or its subsidiaries. All rights reserved. Radial and its logo are trademarks of Radial, Inc.
Ground vs. Consolidated Shipping
The Top 50 retailers use ground service to deliver over half of their orders.
While the majority of retailers still prefer ground service, low-cost consolidated shipping services such as SmartPost and SurePost are gaining in popularity.
Split Shipment
Shipping Time
Origin Delivery Destination
All orders
16%
On orders
less than $24.99
2%
On orders between
$25.00 and $49.99
16%
On orders between
$50.00 and $74.99
12%
On orders between
$75.00 and $99.99
14%
On orders
over $125
6%
No free shipping
34%
