Survey: Lack of speed kills consumer expectations
How fast a retailer offers delivery of online purchases plays a big role in sales conversion and loyalty.
According to a new survey of 650 U.S. consumers from same-day delivery provider Dropoff, 60% of respondents reported they have decided not to purchase from a retailer due to slow delivery speed. Almost all consumers (97%) said speed is at least somewhat important in determining whether or not they will purchase a product. Forty percent said it is very important.
Consumer expectations of delivery performance are also increasing. While only 1% of respondents said they expect to receive retail items the same day they ordered, 40% said they want to. Forty-six percent said they expect companies to deliver faster than they did a year ago.
One positive finding is that retailers who do provide fast shipments can build customer loyalty the same way they can with free shipments. Seventy-seven percent of respondents said receiving free shipping made them more likely to purchase from that retailer again. One in three said it made them irritated when a different company would charge for shipping, and 40% said it made them expect free shipping from others. Those experiencing fast shipping report similar loyalties.
Other notable findings include:
• 95% of respondents say ability to track their package is important.
• 58% cite friendliness of delivery personnel as being important.
• 70% say delivery personnel arriving in uniform is important.
“Retailers who don’t understand how and why consumers are expecting things faster will struggle to compete,” said Sean Spector, CEO of Dropoff. “Much like we saw with free shipping and free returns, those who offered it first set the tone for the industry and reaped the rewards of more loyal customers and higher sales conversions. Smart retailers need to be out ahead of this trend and deliver on the expectations consumers describe in the study.”
Momentum 2016: The supply chain goes digital
The Momentum 2016 conference held by Manhattan Associates May 15-17 in Orlando, Florida offered attendees plenty of insightful sessions and interesting information about how omnichannel commerce is affecting the supply chain.
First, let’s review some data points shared by Brendan Witcher, principal analyst, e-business and channel strategy, Forrester Research:
• By 2020, purchases made by mobile phone and tablet will represent 48% of all online sales.
• During 2016, 49% of U.S. retail purchases, or $1.68 trillion of $3.4 trillion, will be influenced by or made online.
• Seventy-five percent of consumers are more likely to visit a store if inventory is visible online.
• Twenty-six percent of consumers, and 33% of millennial consumers, are less likely to visit a store if inventory is not visible online.
• Fifty-three percent of consumers expect in-store online pickups to be ready in two hours or less.
• Only 19% of consumers think store associates are the best source of product information.
There were also many notable quotes from numerous speakers throughout the conference. Here are some highlights.
“Bed Bath & Beyond has more than 1,000 stores. That means we have 1,000 warehouses and 1,000 returns centers.”
Alex Zelikovsky, VP, omnichannel solutions and supply chain technology, Bed Bath & Beyond
“Sales and conversion don’t reflect the value of most online and mobile touchpoints.”
Brendan Witcher, principal analyst, e-business and channel strategy, Forrester Research
“Supply chain is at the heart of retail. Merchants think they’re king, but they’re not.”
Rachel Mushahwar, head of global retail, hospitality and CPG enabling team for Internet of Things, Intel Corp.
“If I had to do an omnichannel rollout all over again, I would start with store fulfillment and do click and collect first.”
Joe Marotta, VP of supply chain and corporate systems, Michael Kors
“Transformation is more cultural than anything.”
Raj Govindarajan, senior manager, supply chain initiatives, Ulta Beauty
“A sale is a sale is a sale”
Uma Bhemisetty, VP, retail systems The Men’s Wearhouse
“The POS terminal business is terminal”
Eddie Capel, president and CEO, Manhattan Associates
Lowe’s produces high Q1 profits
In a quarter of strong home improvement demand, Mooresville, North Carolina-based Lowe’s reported net earnings of $884 million for the quarter ended April 29, a 31.4% increase over the same quarter lat year.
Sales for the quarter increased 7.8% to $15.2 billion. Comp-store sales increased 7.3% overall, and increased 7.5% for the U.S. business.
"We executed well in the quarter, growing both transaction and average ticket to achieve comparable sales growth that exceeded our expectations," said Robert A. Niblock, Lowe's chairman, president and CEO. "We continued to focus on providing better omnichannel customer experiences, and saw strength in indoor as well as outdoor categories.”
At the end of the quarter, Lowe’s operated 1,860 home improvement and hardware stores in the U.S., Canada and Mexico.
Earlier this year, Lowe’s announced a deal to acquire Canadian home improvement giant RONA for $2.3 billion.
Lowe’s first-quarter results include an unrealized gain on a foreign currency hedge entered into in advance of the company's pending RONA acquisition, which increased pre-tax earnings for the first quarter by $160 million and diluted earnings per share by $0.11.
Lowe’s report follows by one day the earnings report of rival Home Depot. Lowe’s won by a slim margin the head-to-head comp-store comparison, as Home Depot’s comps were positive 6.5% overall, and positive 7.4% in the U.S.