How often do you use on-demand delivery services such as Postmates or Instacart? For more than 22.4 million consumers who’ve spent $57.6 billion in these apps, they have become an industry standard for real-time delivery of almost anything you can imagine. “There’s an app for that” has segued into “you can have that delivered — today.”
At project44 we surveyed over 750 customers and 500 marketing executives to learn consumer expectations for the rapidly growing Delivery Economy — the pervasive sentiment in which customers expect low-cost, fast and highly transparent delivery of goods — and the implications for brands that fail to meet these evolving expectations.
Delivery Rivals Price in Purchase Decisions
One of the most important factors in purchase decisions has traditionally been the price or even the quality of the product. However, delivery has changed the way consumers evaluate purchases, with more than half of consumers (52 percent) citing free or inexpensive shipping as one of the most important factors — a consideration now equal to the price of the product.
Here is where we see a gap forming between what consumers expect and how marketers are meeting demands. We found that 58 percent of consumers expect to be offered free or discounted shipping, but only 31 percent of marketers say their company currently offers or plans to offer free shipping on all purchases.
Timely Delivery Drives Company Reputation
Speed is also a top priority for consumers, and marketers seem to understand this expectation, with a majority of marketers and consumers stating both paid and free standard shipping should only take 3-5 business days.
The disparity between the two groups grows when it comes to other options for faster delivery. Services like Amazon Prime are driving greater demand for options such as subscription-based one-day delivery, with more than 34 percent of consumers stating delivery subscriptions have made them want products shipped faster.
Consumers Expect Real Insights in Real-Time
Another way that the growth of on-demand and same-day delivery is affecting buyers is the growing expectation for transparent, real-time tracking. On-demand delivery apps allow consumers to track their food, for example, down to the mile and minute.
Nearly three-quarters (71 percent) of consumers stated on-demand delivery apps have changed how they want their purchases delivered. In particular, 31 percent of consumers said they want real-time tracking of deliveries. Currently, most companies only offer an accurate delivery date estimate and few marketers have plans to start offering real-time tracking.
This disparity can lead to long-term consequences for a company. A majority of consumers say if a product isn’t delivered on time, it hurts their impression of the company. Additionally, when a package isn’t delivered when or as expected, nearly half of the consumers stated they hold the retailer or e-commerce site responsible. As the effect of on-demand delivery apps proliferates, customer experience is directly tied to the delivery experience.
Delivery is Now Front and Center
These expectations are not only impacting consumer brands but B2B brands as well. Our survey found that 94 percent of business buyers say they have the same expectations around delivery when making business purchases as they do when making personal purchases.
But marketers alone cannot affect the change needed for both B2C and B2B brands to truly embrace the Delivery Economy. They will increasingly have to work with operational groups responsible for driving delivery experience, such as logistics, transportation, and supply chain management, for a more efficient industry focus on this rapid evolution. Marketers also noted delivery companies (56%) and shipping departments (47%) were some of the key stakeholders — inside or outside the company — needed to deliver the best customer experience.
On-demand delivery apps and subscription delivery services are changing the game, and as technology continues to evolve, consumer expectations will as well. A focus on inexpensive, fast, transparent delivery and a strategy that brings in key organizational groups will help brands deliver on the new Delivery Economy.