When it comes to keeping your online business competitive, it’s easy to believe that you need to match the aggressive speed of Amazon – or more accurately, its logistics arm, Fulfillment By Amazon.
After all, fast delivery is what every online buyer wants most, right?
Well, not always.
Although many Americans have been conditioned to expect two-day fulfillment service, evidence suggests that a short runway is not always the “must-have” that companies think it is. This is especially true if:
Your product is unique or carries the cachet of a great brand. Consumer demand for fast delivery is less of an imperative for one-of-a-kind or hard-to-attain items. Consider, for example, the case of the e-commerce vendor that sells a wide array of sports jerseys with team logos under a proprietary licensing agreement. Although Amazon sells similar fan jerseys, this vendor offers the only authentic and authorized versions. As a result, it really doesn’t have to offer ultra-aggressive delivery timelines in order to be successful, because it’s one of the only games in town. Today, the company is fulfilling orders from the Southeast, getting items to customers nationwide within 2–7 business days, and still growing strong.
- Buyers can save money. According to a 2016 AlixPartners study, 83% of consumers are willing to wait three days or more for their orders. And 60% are willing to wait five days or more – as long as it earns them free shipping. In other words, the promise of delivery savings is often more compelling than the option of rapid delivery. (As a corollary, 37 percent of Amazon’s customers still aren’t Prime members. That’s approximately 48 million people who don’t think that “free” two-day shipping is worth the nominal annual fee.)
- Fast delivery doesn’t seem to be a hot button for your particular customer base. Even in today’s instant gratification culture, there are some consumers who simply want the exact product they want from a brand they trust. If it takes an extra day or two to arrive, so be it – as long as the right product arrives as promised. If your customers aren’t complaining, if cart abandonment is not rising, and if sales continue to grow, chances are your current approach is working.
So what does this mean for growing businesses like yours?
First, while efficient shipping times should definitely factor into your company’s competitive equation, the kind of product you sell also plays a major role in shaping consumers’ buying decisions. And if the product is distinctive or revered enough, it could buy you some extra delivery leeway. So could offering compelling value propositions like free or economical parcel shipping.
Second, eCommerce success isn’t always about competing to please every potential customer. Sometimes it’s about dominating a niche and developing a loyal following that is less sensitive to issues of price and delivery speed.
It’s also important to note that, just because your company can’t replicate Amazon’s extensive fulfillment network or near-instantaneous delivery capability, it can still come pretty darned close by either choosing a highly central single fulfillment location or by adding one or two additional DC locations in select markets. Fulfillment companies with a nationwide warehouse network can give you an immediate 1–3 day delivery capability to anywhere in the United States.
To learn more about this topic, download our latest eBook, How Many Fulfillment Warehouses Do You Really Need?
Visit this blog next week when we’ll tackle the question of how to find your company’s optimal warehousing number.
