Should you consider free next day delivery?

With customer demands rising, faster, and cheaper is the current expectation. In a survey of 1,000 UK consumers, conducted with IMRG, we found out that the demand for rapid delivery increased hugely between 2020 and 2021. In the short space of one year, the number of people who expected same day standard delivery increased seven-fold, and those who expected next-day almost tripled. Customers want their goods faster than ever, as the covid-19 lockdowns bought about a craze for rapid consumer reward, where they don’t need to wait, and they get instant gratification. The pandemic therefore, has accelerated the already existing trend of speedy delivery, alongside customers expecting not to pay for it (for example, Amazon Prime). Therefore, should retailers be considering offering free next day delivery?

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Think about when you place an online order. What is your expectation for how long standard delivery options should take to arrive?

(Source: Maru, nShift and IMRG Home Delivery Report) 

IMRG asked 110 retailers about the delivery options they were offering, and whether free next day delivery was one of these. Interestingly, 53% of retailers said they would consider it, meaning it may become more mainstream in the near future. Furthermore, 13% said they were already offering it, which is a surprisingly high percentage to already be in on the trend. 34%, said that they wouldn’t consider it.

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Would you ever consider free next day delivery an option?

(Source: IMRG’s survey of 110 retailers)  

IMRG then asked why those retailers that said no, wouldn’t consider free next day delivery. Answers always seemed to come back to how it would affect margins, or not be a profitable or viable system. 70% of comments were related to cost/margin impact, with answers such as, ‘Can’t see how we would be able to support I profitably’ and ‘The cost of doing this isn’t worth it.’ However, some answers were to do with problem solving this issue, such as ‘Needs to have a threshold’ or ‘We’d do it, but with a threshold.’

Whilst profit margins seem to be the thing getting in the way of many retailers considering free next day delivery in the future, this doesn’t mean it won’t be a future trend. 66% of retailers would consider it or already offer it, and with consumer sentiment aimed towards rapid and cheap delivery fulfilment, it seems like it could be the next big thing.

 

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