For customers today, fast and free shipping is becoming the expectation, not a luxury. The conundrum: As shipping times decrease, and customer expectations increase, how do you deliver packages to shoppers inexpensively, effectively, and efficiently?
The retail industry sees shipping as a competitive differentiator: After Amazon announced its plans to invest hundreds of millions of dollars in its same-day shipping offering this June, competitors Walmart and Target followed suit, announcing faster shipping as well.
In my latest research, “Free, Fast Delivery Is An Oxymoron — Here Are Six Disruptions To Test Instead,” I explore the most promising solutions to this challenge with retailers, carriers, and customers in mind. Here are some of our key findings:
- Last-mile delivery requirements are complex. Transporting goods over long distances, maintaining temperature control for food items, securing delivery for food and high-value items, and delivering within a promised time frame are all factors that make last-mile delivery complicated and expensive.
- To date, delivery innovation has been about convenience . . . The prevailing strategy for many upstart carriers has been faster delivery — but with little attention paid to costs. This service has led shoppers to expect fast delivery while leaving others (mainly the retailer or brand) to absorb the requisite expenses.
- . . . but future innovation will be about cost and efficiency. Noteworthy opportunities for retailers to pursue in last-mile delivery include clustered pickup points, carrier-customer interfaces such as FedEx’s Delivery Manager, and just about any curbside pickup program. All of these tackle inefficiencies in package delivery. We believe these solutions will scale over time and also be the prevailing ways in which shoppers receive packages in the future.
Find out more about the challenges and disruptions to fast and free delivery in the full report.
This is the second report in a multipart series on last-mile delivery in the US. Make sure to also review the first report, “The US Last-Mile Landscape Today,” to learn about the current state of eCommerce delivery.