Do shoppers really want last mile delivery?

With the launch of Amazon Prime and eBay Guaranteed Delivery, retailers are aware that the expectations of the Australian consumer are higher than ever before.

However, according to a report by Power Retail,’ Last mile delivery―a race against time, Australian shoppers view three to six days as the typical or standard delivery time offered by online retailers, which contradicts the conventional wisdom that it must be one to two days.

“There has been a massive land grab over the last five years for retailers to be the fastest at getting products into consumers’ hands, but at what cost to the bottom line?” says managing director, Grant Arnott.

“This report highlights the truth about last mile delivery consumer expectations, with insights on how retailers can hit the sweet spot in the trade-off between meeting delivery expectations and maintaining profitability. Speed matters, but it’s not what you think.”

Virtually all online shoppers feel that retailers need to offer some form of financial restitution for late delivery with half preferring a refund of shipping costs.

Also, drones are emerging as a serious option for Australian online retailers, particularly for targeting either younger shoppers, or for delivering low value items.

While the longer the advertised delivery period offered, the more likely it is for a consumer to look elsewhere, short delivery periods alone, however, will not reduce the likelihood of shoppers checking out competitors.

Overall, 30 per cent of online retailers rate optimising delivery as a top priority. However, pureplay retailers rate it as much more important compared to multichannel retailers.

The majority of consumers find the concept of convenient, free or very-low cost parcel lockers appealing.

“Our data shows that retailers who have invested heavily in superspeed delivery at the expense of profits may not reap the benefits they desire. Honouring the delivery promise is more important to consumers than all-out speed, so investing in reliable, sustainable and efficient last mile delivery is more effective than joining the space race to offer the fastest delivery option possible,” adds Arnott.