The amount of time customers can differentiate between clicking their mouse and hearing a knock at their door is diminishing — and fast. It may have once seemed unimaginable, but at least 56% of customers between the ages of 18-34 now expect the option of same day delivery when making a purchase online.
Consequently, more and more businesses are integrating same day and next day delivery into their services. This points to a strong opportunity for businesses, and could help new businesses break out by closing the gap between the demand and supply of this delivery option.
But when setting up a business, is it absolutely essential to offer same day delivery? Adapting to rapidly shifting consumer behaviour may be vital for any budding business to retain its growing customer base, but many companies are yet to make the switch. Here, we break down the key differences between the two premium delivery options, and help you decide what is best for your business.
Table of Contents
Same day delivery
Customers tend to be willing to pay more to get their items on the same day, which has encouraged courier services to offer a range of quicker options. While this is the fastest available option, whether the product will actually arrive on the exact day varies depending on the time of purchase.
Generally speaking, if an order is placed before noon, delivery will be within a few hours. At the very latest, it will be delivered no later than one day after it has been collected by the courier service. However, customers cannot expect to receive an item before the end of the day if they place an order at 9pm. Same day delivery tends to have a range of cut-off times, usually earlier rather than later, so that couriers have enough time to deliver the products within the same day slot.
The pros
Customer satisfaction
According to Supply Chain Gamechanger, 88% of consumers are willing to pay extra for same day delivery or faster shipping options. Given this desirability, if your immediate competitors offer same day delivery, so must you. You need to be considered alongside the other options your target consumer is considering.
Presenting your business as having speedy service may enrich your brand image as a reliable, trusted company that is up to speed with consumer trends. Your customers will be able to get a strong impression of how their time and convenience matters to you, which may encourage them to spread the word. For a business just starting out, this kind of loyalty is especially important, since customer acquisition often costs around five times that of retention.
Security
Courier service CitySprint maintains that same day delivery is ideal for businesses that are dependent on time-critical service that is both easily traceable and secure. This is especially true of industries like the medical profession, manufacturers, lawyers and the media, which often need fragile and confidential items as quickly as possible.
The cons
Logistics
A feature in Retail Gazette explores the dilemma of keeping up with premium delivery trends and maximising a company’s rate of return. Small-scale retailers adopting a same day delivery strategy would need to increase the size of their workforce for an efficient and faster processing of orders, quicker packaging, and a targeted delivery. This is a demanding workload, and maybe a bridge too far for a business that is in the embryonic stages of its growth.
The cost
Although same day delivery is direct, the expense can increase for multiple shipments over longer distances, as mileage largely constitutes additional charges. For most consumer goods, the customer does not expect to pay more for delivery than the original cost of the product. Though many like having the option, if your product is not particularly expensive it is unlikely that you will see frequent purchases for delivery that same day. In these circumstances, next day delivery can be a cost-effective and reliable alternative.
Next day delivery
Next day delivery also needs rapid processing, but this can happen after business has closed for the day. This option also can be scheduled based on the proximity to delivery locations, where orders can be shipped simultaneously, deploying the same courier personnel for each drop-off. Next day deliveries will reach customers within 24 hours of being intercepted by the courier who will be delivering the goods, often via an overnight service.
The pros
Logistics
Next day delivery gives businesses a small but significant time gap between the order and expected receipt, which is vital for optimising your deliveries. As consultancy firm CACI argues, this additional time is not only for ensuring that extra care is taken, for example, over fragile goods, but for reducing the time pressure of organising deliveries against the clock, resulting in more predictable arrival times and fewer delays. The customer also has greater flexibility to cancel the order with this bigger window, giving them less stress if their circumstances change.
Sustainability
Brand image is also a vital part of building your business. While consistent customer satisfaction will be integral to this, the ‘eco-wakening’ is a significant new happening that diverges away from this convenience-based model.
For retail in particular, sustainability has become an influential factor for consumers, with 66% of respondents (and 75% of millennials asked) reporting it as a consideration when making a purchase. Compared to same day delivery, next day is arguably the most efficient compromise between convenience and sustainability.
The cons
Competition
As we have explored, same day delivery is a competitive differentiator that is worth the initial loss and inefficiency. This may be especially true for a small retailer whose target consumer is young and accustomed to expecting same day delivery from big ecommerce retailers.
The biggest indicator of this fact is the holiday season, where frantic shoppers have grown increasingly used to deferring their purchases, safe in the knowledge that when the chips are down, some retailers will provide same day delivery. Given that Christmas shopping sees around £500 spent per person on average, this is likely to be the most profitable time of the year for your business. Same day delivery might mean the difference between keeping your head above water, or clearing up big time.
