A new generation of 'want it now' shoppers are being left disappointed according to new research that reveals Australian retailers fail to meet the expectations of today's convenience driven consumers.
The 2016 State of Shipping in Commerce report launched by Temando surveyed over 200 Australian micro, small, mid-sized and enterprise retailers and 1,000 consumers to explore shoppers' demands.
The detailed report indicated there is a disconnect between the shipping experiences retailers are providing and the service levels expected by consumers.
While 80 per cent of shoppers prefer a specified time slot for delivery and 75 per cent want guaranteed weekend or afterhours shipping to fit in with their lifestyle, only 31 per cent and 18 per cent of retailers respectively are offering these services, yet 33 per cent of consumers are willing to pay a premium.
In addition, 43 per cent of Australians are prepared to fork out more for same day shipping, yet just half of retailers provide this option and only 54 per cent are giving their customers choice at the checkout.
The majority (85 per cent) of shoppers expect to see multiple shipping options in the cart such as standard (5-7 days), express (1-3 days), same day, hyper-local same day (1-3 hours) and click & collect.
Most retailers (84 per cent) believe by offering multiple shipping options, they are better served to meet customer expectations. Those who are doing so have seen an increase in sales (79 per cent) and a reduction in cart abandonment (62 per cent).
Seven in ten (70 per cent) Australians are abandoning their purchases because the cost of shipping is too high and 34 per cent due to free shipping not being offered. Not surprisingly, retailers are concerned with the cost of shipping too and three quarters (76 per cent) of micro and 74 per cent of small retailers are passing on these costs to their customers, compared to 75 per cent of enterprise businesses who are absorbing the expense.
Carl Hartmann, CEO and co-founder of Temando, said the results confirmed that choice at the checkout is a necessity not a feature.
"The gap between consumer expectation and retailer capability is growing. The future belongs to retailers who capitalise on this opportunity and use shipping and fulfilment as a retail weapon. Only half of retailers are offering the full range of services customers expect, when opens up a potentially huge competitive advantage," he said.
Additional survey findings include:
- Delivery by drones -Nearly one third (31 per cent) of all retailers reported a willingness to use drones to deliver their packages while just under half (44 per cent) of consumers are willing to accept a drone delivery
- Delivery speed -Australian retailers are well placed to enable hyper-local delivery as the majority (66 per cent) can ship an online order within four hours, but if retailers are not shipping from the closest location or store to the customer they're not going to achieve the desired delivery time.
- Lack of total automation – A relatively small number of retailers reported having a totally automated process for booking couriers (21 per cent), 34 per cent of micro-retailers have no automated backend tracking process, 31 per cent of all retailers are still manually booking carriers and half of enterprise retailers (50 per cent) are still manually processing returns.
"Convenience for the customer is key and businesses have the opportunity to re-imagine their supply chain and create meaningful, cost effective customer experiences. Agile fulfilment remains a crucial challenge to overcome but with smart investments in technology, especially the automation of multiple shipping options, to help personalise the customer experience, many small and enterprise retailers can transform their business," Mr Hartmann said.