The competition for same-day delivery has intensified as industry giants such as Amazon, Target, and Walmart invest in enhancing their rapid delivery capabilities. Small- and medium-sized businesses (SMBs) have also joined the race, exploring non-traditional carriers and new tech services to meet the demand for quick-turn deliveries. However, the pursuit of speed has sparked concerns. According to UPS Capital’s recent survey, 60% of surveyed businesses suffered more damage and losses from non-traditional last-mile and same-day carriers than from traditional carriers. In light of the pandemic, it’s worth asking if consumers still prioritize lightning-fast delivery, or if their preferences have changed.
To dive further into this and other emerging shipping trends, I spoke with Mark Robinson, President of UPS Capital which offers InsureShield™ Protection and DeliveryDefense — a comprehensive coverage solution that that leverages enriched delivery data to protect goods in transit across multiple carriers, effectively addressing challenges encountered in the last mile.
Gary Drenik: Thanks for taking the time to discuss this important and growing issue for SMBs. First, I’d like to understand how consumer expectations around shipping and delivery have changed since the pandemic.
Mark Robinson: Consumer expectations have significantly evolved since 2019, primarily driven by the pandemic’s impact on online shopping. The surge in eCommerce sales, rising from 9.9% in 2019 to 13% in 2021 has fueled the desire for convenient online purchasing.
As people stayed home and preferred online shopping, SMBs faced mounting pressure to offer same-day and next-day delivery options, particularly for essential items like pharmacy and convenience store products. While offering same-day and next-day options has helped boost profitability for retailers in recent years, we’re now seeing a trend that shoppers seek only specific types of items for quick-turn deliveries. It’s become product-specific post-pandemic. The reality is, on most eCommerce items, speed is no longer king. Safe, assured delivery is.
Increased online shopping and a volatile supply chain since 2019 have heightened consumers’ concerns regarding lost and damaged packages. Consumers today are increasingly looking for enhanced control and options throughout the post-purchase experience, placing a high priority on features like improved visibility and tracking. In fact, a survey revealed that 47% of shoppers prioritize the assurance that their product arrives safely or can be promptly replaced over the convenience of two-day shipping. This sentiment is reinforced by a study by a recent Prosper Insights & Analytics survey which found that only 27% of consumers consider same-day delivery to be “very important” to them.
Drenik: Interesting. Does that mean more risks are emerging during transit and delivery with an uptick in same- and next-day shipping?
Robinson: Same- and next-day delivery amplifies risks in transit and delivery. Managing expanded carrier networks poses challenges for merchants, as non-traditional carriers may not follow the same processes.
Shipping risks persist even for non-quick-turn shipments. Porch piracy, the theft of packages from doorsteps, is a significant factor contributing to increased losses in the last mile. According to SafeWise, an estimated 260 million packages were stolen from doorsteps in 2022, highlighting the widespread nature of this problem regardless of delivery speed.
Another potential risk is brand reputation — a crucial asset for SMBs that is often on the line when shipping mishaps occur. Over the past year, 72% of SMBs reported that shipping incidents negatively impacted their customer reviews. Such feedback can have a ripple effect, deterring prospective customers and leading to a decline in sales and revenue.
The good news is that consumers are increasingly clear on what they want to stay happy and loyal. Their concern for shipping mishaps outweighs their desire for speed — their primary focus is receiving their order in prime condition. SMBs can enhance their practice by crafting personalized shipping experiences tailored to individual customers.
Drenik: This seems like great news for SMBs that simply can’t compete with larger retailers in terms of delivery speed. What else can merchants do to meet evolving consumer expectations while still providing a great customer experience?
Robinson: SMBs can offer services and solutions that provide the benefits shoppers are seeking, including personalized shipping experiences. A significant 87% of surveyed consumers expressed their inclination to shop with an SMB if they could personalize their shipping experience with services such as the ability to track packages in real time, pick exact package arrival dates, and access multiple cost-affordable delivery options.
By offering personalized shipping options, SMBs cater to shoppers’ desire for control and enhanced customer service. A recent Prosper Insights & Analytics survey emphasizes the importance of delivering exceptional customer experiences, with 56% of shoppers valuing access to a “live” customer service representative as “Very Important/Important”.
Rather than focusing on speed, SMBs can leverage existing solutions to provide shipping perks aligned with consumer preferences, giving customers control and assurance.
Drenik: Shipping seems to be a significant factor in shaping consumers’ perception of a business. What can SMBs do to safeguard their reputation and financial performance against mishaps in the shipping and delivery process?
Robinson: SMBs can seek various strategies to safeguard their reputation and financial performance in shipping and delivery. One effective approach is offering personalized insurance that exceeds standard liability coverage, instilling customer confidence and mitigating negative reviews through expedited reshipment coverage.
Furthermore, businesses can empower consumers by providing the option to add shipping insurance at checkout, as desired by 65% of surveyed customers. SMBs can also improve the customer experience by proactively identifying risky deliveries and addressing potential mishaps even before creating shipping labels, utilizing the valuable insights provided by DeliveryDefense™ data.
Despite challenges like supply chain disruptions and porch piracy incidents, consumer expectations for online purchases remain high. By offering effective solutions, SMBs provide peace of mind to both themselves and their customers, ensuring a positive shopping experience.
Drenik: Certainly, something to keep in mind as the expectations from consumers continue to change. Mark, thanks so much for taking the time to discuss this with me. Any final thoughts?
Robinson: The past few years have presented significant challenges for SMBs, particularly with the disruptions caused by an unpredictable supply chain. The concept of personalization in the last-mile has expanded beyond real-time package tracking to encompass customer-selected delivery timelines, comprehensive insurance protection, and other related services.
By addressing these evolving consumer preferences, SMBs can not only gain a competitive edge but also improve their financial performance and reputation.
Drenik: Great advice. Thanks for taking the time to share these important insights. I look forward to future conversations.
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