When Amazon began offering free, guaranteed, 2-day delivery for its Prime members 15 years ago, it was a genius move that paved the way for Amazon’s Prime Membership Program to become what it is today. This revolutionary step offered in 2005 is now all but required to have success online - and not only for books and other easy-to-ship, low priced items, but for just about everything. Early last year, Amazon raised the stakes again by announcing that many of its items will be delivered in one day, but it will take some time for the rest of the market to catch up, so let’s begin with a focus on achieving 2-day delivery.
According to recent surveys, 63 percent of consumers expect items to be delivered within three days and 83 percent want a guaranteed delivery date. Additionally, 76 percent will go elsewhere if more shipping options are offered, while 87 percent say they will abandon a cart if the checkout process is complicated.
Consumers expect speedy delivery of their products and will quickly turn to another retailer (or brand) if that need can’t be met. And it’s no longer for everyday items, it’s for luxury and high-value items as well.
To further illustrate the point, a case study showed that conversion rates on Amazon and Walmart for four brands in each of the following categories increased significantly when delivered in two days:
Games - 203% conversion rate increase in six months after implementing 2-day delivery
Art Supplies - 246% increase in five months
Cosmetics - 190% increase in six months
Hair Care - 500% increase in three months
As it relates to the home furnishings industry, Wayfair suggests a 20%-30% conversion rate lift when their suppliers can find a path to 2-day delivery. Clearly, 2-day delivery is important, but for larger or more complex items in the home furnishings category, it’s easier said than done. So how do you pull it off? We offer some tips below.
If you are fortunate enough to have your own warehouse, the first thing to do is to ensure you have the operational efficiencies to ship within 12-24 hours. Shipping in this time frame will allow items to be delivered in two days in certain regions/zip codes in close proximity to that location. Ideally your warehouse is strategically located near high volume areas.
To expand 2-day delivery outside of your region (if you’re doing it yourself), it gets a bit more complex and more costly. One expensive, but great option if your volume is large enough, is to open a second facility (again strategically located) so that you can achieve 2-day delivery in additional zip codes. This may sound obvious, but most brands don’t realize that high value in offering sharper delivery times.
Certainly, going beyond 2 facilities will increase your geographical range, but most companies are not at the volume level where this investment is justified. Further, if you have 2 facilities strategically placed, you’ll likely be delivering in 2-days to the majority of the areas you’re targeting.
Another less expensive option (though it would still apply whether you have one or two facilities), is to use expedited shipping/air freight for certain furniture categories that are not as cost prohibitive. Various carriers are already set up to expediently ship and deliver products that fall within a certain size and weight requirement.
If your volume allows you to achieve two-day delivery on your own, it’s certainly a plus because it allows you to maintain the highest degree of control - both in terms of delivery time - as well as quality.
If you only have one facility (or none at all), there are still ways to achieve nationwide 2-day delivery - but you will need a partner to achieve it. Here are some ways this can work:
Partner with internet retailers who will buy the inventory from you and stock it. The truth is that this opportunity is fleeting, but it still exists.
Seek out internet retailers that will split an expedited freight cost with you. Often times these conversations aren’t explored, but they should be.
Find a traditional third-party logistics (3PL) company. Many already have the assets and network in place to deliver products anywhere in a timely manner. But beware - not all can achieve an expedited delivery promise so make sure to vet them well.
Partner with internet retailers that already have a sophisticated operational network, who can work with you on consignment (you send stock to their facilities and you invoice as customers place orders). This doesn’t have to be just to that internet retailer’s customers – it can also benefit a multi-channel program that fills orders for your other channels of distribution. A few examples of internet retailers that have this capability.
Wayfair Castlegate
Overstock.com SOFS
Amazon FBA
Whether you are able to guarantee 2-day delivery on your own or if you use a 3rd party, it’s critical to work with internet retailers that have the technology in place that allows them to message a 2-day delivery. Many retailers are only able to show how long it takes to ship a product, which is much different, and less effective, than showing when it can/will be delivered to the consumer.
If you would like more information about 2-day delivery strategies that fit your needs, feel free to contact us today.