Warehousing & Fulfillment

Fast Shipping: 2022 Consumer Expectations

Warehousing & Fulfillment
February 2, 2022
8 min read

Learn how fast shipping promises drive top of funnel purchase decisions and how merchants of all sizes can make fulfillment a competitive advantage.

A Look Back

When Amazon Prime launched in 2005, 2-day shipping was a novelty and what Jeff Bezos himself said felt like “an indulgent luxury”. This novelty, however, soon redefined Amazon customers’ understanding of fast shipping, and the convenience of 2-day delivery forever changed consumer shopping habits. It opened up the world of online sales to entire new product categories from home goods to toilet paper and even groceries.

Many major retailers, seeing Amazon’s expanded offerings cutting into their top line revenue, quickly followed suit. Now, the largest brick and mortar retailers are even launching competing subscription services and turning their focus to growing their ecommerce divisions. Today’s customer expectations for fast shipping don’t differentiate between large retailers and small to mid-sized merchants, and businesses of all sizes must offer speedy delivery promises in order to compete.

When Ware2Go’s merchant partner ECR4Kids decided to take their products into the direct to consumer marketplace, they were surprised to find how fast shipping expectations shaped consumers’ choices.

In an effort to understand the state of this growing consumer expectation, Ware2Go’s recent merchant survey gathered responses from merchants of various sizes to understand how businesses are responding to meet this growing demand.

Fast Shipping in 2022

It’s no secret that ecommerce growth skyrocketed during the pandemic. The global supply chain was not prepared for the abrupt switch in transportation and fulfillment needs or the staggering increase in consumer demand. With supply chain disruptions regularly making front page news, consumers might have been expected to temper their expectations in terms of shipping speed or price. However, our 2021 consumer survey data revealed that since the onset of the pandemic:

  • 33% of consumers have higher expectations for fast shipping
  • 40% of shoppers have higher expectations for free shipping
  • 42% of shoppers expect a 2-day shipping option for every online purchase they make.

Headed into 2022, the demand for next-day and same day delivery continues to grow, with may consumers expecting to receive products in less than 2 hours. Ware2Go CEO Steve Denton predicted that same-day delivery would be merchants’ greatest opportunity for 2022 in an interview with eSeller365.

“Merchants’ greatest opportunities in the coming year will be leveraging micro-fulfillment opportunities to take advantage of services like Roadie in densely populated areas. The best way to leverage same-day delivery without eroding margins is to take a highly targeted approach to SKU management and inventory distribution.”

Steve Denton, 2022 eCommerce Predictions – 26 eCommerce Experts Predict The Biggest Opportunities For Your Business

A targeted approve to SKU management means taking a look at the demand for same-day delivery by SKU and geography and deciding which SKUs should be stocked in densely populated regions to offer same-day and next-day delivery.

Fast Shipping As a Competitive Advantage

Thanks to exponential growth in the fulfillment industry, with a particular focus on serving small to mid-sized merchants, businesses of all sizes are now equipped to compete with fast shipping promises. For one thing, the rising model of on-demand warehousing allows small to mid-sized merchants to aggregate their inventory with other merchants’ in order to negotiate lower warehousing space and labor costs. These partnerships allow merchants of all sizes to disperse their inventory across strategic warehouse locations to achieve affordable 1 to 2-day ground shipping to their customers anywhere in the country.

And according to consumers, fast shipping promises sell. In a 2021 survey, 69% of consumers said they were more likely to click a display ad that mentioned fast/free shipping, and 77% said they were more likely to purchase an item if it could be delivered to them in 2 days or less.

Google Shopping’s consumer behavior research prompted their Free and Fast annotation program that prioritizes listings offering free 1 to 2-day delivery in the browser’s zip code. In early testing Google saw a 9% increase in overall conversion rates for listings that displayed a fast shipping annotation. For SMB’s, then, fast shipping is an opportunity to convert shoppers at the top of the sales funnel, driving up top-line revenue.

Chalkboard for sale through Google Shopping with Free and Fast Shipping annotation

Shipping Fast, Sustainably

An unintended consequence of the ecommerce boom was an increase in carbon emissions. Between increased final mile carrier vehicles on the road and container ships idling off the coast of California, shipping emissions rose nearly 5% during 2021.

Consumers are aware of and concerned about the impact of their shopping habits on the environment. According to a 2021 consumer survey, 88% of consumers say sustainability is an important factor in their purchasing decisions, and 66% say sustainability has become more important as a result of the pandemic. On the other hand, a study by Harvard Business Review points out a cognitive dissonance among consumers. According to their study, 65% of shoppers want to support more sustainable business practices, but only 25% actually do.

Consumers have a tough choice when shopping in a 1-click-purchase retail environment. Today’s shoppers are busy and have grown accustomed to the convenience of 1- to 2-day home delivery for virtually every purchase they make online. When they have to make a split second decision between convenience and sustainability, most consumers are choosing convenience, even when they seem to understand the impacts of their choices.

Ultimately, fast shipping and sustainability do not have to be mutually exclusive. The solution for more sustainable ecommerce shipping is two-fold:

  • Distribute inventory closer to end customers to decrease time in transit (TNT) on final mile deliveries. The less time a package spends in transit to the end customer, the less carbon is emitted. Distributing inventory also decreases reliance on next-day air shipments, which typically emit six times as much carbon as ground shipments.
  • Offset carbon emissions by purchasing carbon credits through a reliable carbon offset marketplace that supports a variety of reforestation and forest preservation projects to sequester carbon. At Ware2Go, our carbon offset shipping network offsets carbon for every shipment within our network. Merchants are not required to sign up for the program or pay extra for carbon offsets. Click here to learn more about our carbon offset shipping network.

A Look Ahead: The Future of Fast Shipping

As smaller merchants step up to compete with Amazon and big box retailers’ 2-day delivery standards, large retailers are continuing to push the envelope to offer faster and faster delivery. In addition to distributed fulfillment centers for next-day delivery, big box retailers have increasingly come to rely on BOPIS (Buy Online Pickup In Store) models that easily allow for same-day fulfillment.

Forward-thinking SMB’s are already looking to the future and anticipating the next phase of customer expectations for delivery speed. To stay ahead of the curve, these businesses should prioritize partnerships with fulfillment providers that innovate on the enterprise level and make best-in-class technology accessible and scalable for businesses of all sizes.

To learn more about how Ware2Go is leveling the playing field for businesses of all sizes through its nationwide warehouse network and cutting edge fulfillment technology, reach out to one of our logistics experts.

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