Deloitte: Holiday shoppers not willing to pay extra for faster delivery
Consumers are putting the squeeze on retailers when it comes to delivery costs and speed this holiday season.
Holiday shoppers are reluctant to pay more for expedited shipping, as nearly two-thirds (64%) said they are not willing pay extra for two-day shipping. Respondents indicated they would pay, on average, just under four dollars ($3.80) to guarantee next-day delivery.
This was according to “Deloitte’s 32nd Annual Holiday Survey.” The report reveals holiday shoppers’ spending intentions and trends.
Retailers are still trying to define which is more important: free or fast shipping. Nearly 9 in 10 (88%) of respondents said, “free shipping” is more important compared with just 12% who prefer “fast shipping.”
When defining what constitutes “fast shipping,” more than half (54%) of holiday shoppers said two days or less. Just 35% consider 3-4 day shipping “fast,” down from 42% last year and 63% in 2015.
Most holiday shoppers (72%) plan to take advantage of free shipping offers this season. Meanwhile, nearly two-thirds (65%) of shoppers think they should be allowed to order after Dec. 17 and still get free shipping.
Some shoppers are cutting through the clutter and opting to pick up online orders right in-store. Roughly 4 in 10 (43%) of consumers plan to buy items online and pick them up in-store this holiday season – again motivated primarily by “fast” and “free.” These shoppers cited saving on shipping charges (62%) as the No.1 reason to buy online and pick up in-store, followed by 48% who said they do so to get the item faster.
Home appliances (45%), electronics (43%) and clothing (43%) top the list of categories shoppers plan to buy online but pick up in the physical store, the report said.
After fast deliveries, consumers want “many happy returns” — especially secure and flexible, and generous return policies. The option to return to any store location (67%) tops the list, followed by refund options other than store credit (63%).
Around one-half (51%) of respondents said they want a longer return window around the holidays, ranging from 30 to 90 days. Meanwhile, 41% want the option to return without a receipt.
Convenience and selection put online channels at the top of everyone’s “nice” list. As the majority of holiday spending among survey respondents is expected to head online, shoppers are putting more than half (51%) of their budgets toward online purchases versus in-store (42%).
Online shopping significantly outpaces in-store in areas such as ease of searching (79% versus 64%) and product quality and trust (76% versus 64%).
Online shopping destinations are the top preferred venue among all age groups and income levels, followed by mass merchants. Differences only emerge when rounding out the top three shopping destinations. Among seniors and households earning less than $50,000, supermarkets earn the No.3 spot; Gen Z opts for fast fashion apparel retailers, while millennials choose off-price and Gen X and Boomers head to traditional department stores.
“It only took a few holiday seasons for people to change their expectations of retailers throughout the entire shopping journey — from search and inspiration to product variety, availability and price, to delivery and even returns,” said Rod Sides, vice chairman, Deloitte LLP and U.S. retail, wholesale and distribution leader.
“The online experience has also redefined people’s expectations of the physical store,” he said. “In the survey, online channels outperform stores when it comes to finding unique items and products that are high-quality and ones they trust. At one time, online excelled primarily on price followed by convenience, but now, it’s outpacing the store experience across all attributes during the holiday season.”
Online giant discounts third-party sellers’ merchandise as the holidays approach
Amazon introduced a new third-party discounting plan.
In a move to lure customers away from its competitors, the online giant is cutting prices of products sold by third-party sellers on its website. The move is designed to aggressively compete against low-priced rivals like Walmart, according to Reuters.
Amazon has already began slashing prices of certain merchandise — discounts that are as high as 9% in some cases. However, these discounts seem to apply to third-party sellers who ship their products through Amazon’s distribution centers, according to Fortune.
Amon the merchandise impacted by the discount are board games and technological gadgets. The e-retailer will sell the items at lower prices, and absorb the the discount amount — which still entitles sellers to receive full price from Amazon, Reuters reported.
An Amazon spokeswoman said in the report, “When Amazon provides a discount, customers get the products they want at a price they’ll love, and small businesses receive increased sales at their listed asking price.”
While some third party companies on the Amazon Services Sellers Forums are bullish on the program — especially if they are entitled to their full fee, not all sellers are happy with the decision. Some merchants have even complained that the decision “devalues” their products.
One seller hopes the move doesn’t devalue the merchandise, an issue that could find goods “relegated to bargain bins by playing the low price game. Discounting is a short term fix. Doesn’t fit into our long term plan,” the seller said on the forum.
“This new discounting decision is one of the strongest reminders that selling on Amazon is a privilege, like driving, and not guaranteed,” said Bardia Dejban, CTO of SMB e-commerce platform Volusion.
“This is bad news for third party sellers with their own e-commerce website because they are now competing on price against Amazon and other marketplaces,” Dejuan said. “The good news is,Amazon is covering the cost difference for third party sellers this time. But it makes me wonder if they’ll use the data collected to change their terms of service and pricing policies next year or sooner.”
Businesses can opt out of the program at any time, Amazon’s spokeswoman told Reuters.
Retail vet joins REI
REI has named the former CIO and executive VP of Coach as its chief information officer.
The outdoor fitness apparel and gear retailer appointed Christine Putur as CIO and executive VP, Geekwire.com reported. Putur spent four years at Coach, from February 2013 to May 2017. Prior to that, she served as the CIO and senior VP of Staples Corp. Before Staples, she was with Compaq Computer Corporation.
Putur succeeds Julie Averill at REI. Averill left REI in May to join Lululemon as CTO.