This year promises to be a successful one for online retailers. New research published by Deloitte indicates that shoppers visiting both brick-and-mortar and online stores are likely to spend 75% more this holiday season than consumers who shop only in stores. In dollars and cents, that difference translates to a planned spend of $1,829 for omnichannel shoppers compared to $1,040 for brick-and-mortar only customers.
To capture these sales, it’s not enough to offer promotions and discounts (though many customers report being influenced by them), nor is it enough to offer the hottest holiday items. This year, consumers are conducting much of their holiday shopping later in December while still expecting that retailers will be able to deliver their items on time for holiday gatherings. Additionally, the stakes are high: recent Voxware research found that 86% of shoppers have higher expectations for on-time delivery during the holiday season.
Companies that want to drive online sales need supply chains that can execute the shipping policies consumers demand. What does an ideal shipping policy look like to most consumers? If compelled to choose between free shipping and fast shipping, Deloitte found that 87% of shoppers indicated a preference for free shipping while only 13% indicated a preference for fast shipping. While it would be easy to interpret this figure as evidence for offering free shipping even if it’s slow, additional data suggests more complicated consumer preferences. Deloitte’s research also found that that 60% of customers expect to receive free shipping for orders placed up to December 17, which is too close to Christmas for slow shipping. Also, 35%of consumers indicated that they would not be willing to pay a surcharge for 2 day shipping, which suggests a strong demand for fast and free shipping.
To capitalize on demand, smart companies will want to pull out all the stops to offer customers shipping that is both fast and free—while minimizing the associated shipping and logistics costs the retailer must absorb. One way to achieve this goal is to implement technology like Voxware’s Cloud Voice Management Suite (VMS) to increase fulfillment speed in the distribution center. Many companies that deploy voice technology report efficiency improvements of 30%, which can go a long way toward increasing throughput during the busy holiday season. Another way for retailers to reduce shipping charges is by leveraging a predictive analytics platform like Intellestra to manage and route orders to distribution centers close the customer’s address. In doing so, companies can reduce the total shipping distance and therefore reduce the cost of offering fast and free shipping.
Thanks to technology, companies no longer need to face the tradeoff between fast and free shipping during the holiday season or any other time of year. As consumer-spending levels continue to rebound to their highest levels since the recession, companies that invest in their supply chains will see benefits during the holidays and beyond.