Retailers and delivery companies alike see speed of shipping as a key factor in their ability to get customers across the line in the final, frantic quarter of the calendar year. That is the takeaway from a recent Australia Post study of the country’s top e-commerce companies.
While the finding is not altogether surprising – online retailers have always attempted to push back the cut-off date when orders can be guaranteed to arrive before Christmas – it carries new weight this year, as a growing number of retailers can actually execute on the promise of same-day delivery.
Of the 250 e-commerce companies analysed by the Pacific Consulting Group on behalf of Australia Post, 60 per cent offered an express shipping option and 15 per cent offered a same-day day shipping option. Fifty per cent offered free shipping above a certain value of goods.
These figures are likely to increase in the weeks leading up to Christmas, as retailers roll out improved delivery offerings in an effort to capture sales from time-poor shoppers. One such retailer is Hunting for George.
The online homewares retailer typically offers a range of paid delivery options, including standard, express and same-day metropolitan shipping. But in the final week before December 25, Hunting for George plans to offer free same-day metropolitan shipping in Melbourne, where the company is based, to avoid the pre-Christmas slowdown that typically plagues e-commerce companies.
Making free shipping a priority
In 2016, the first year that Hunting for George offered free same-day shipping before Christmas, the company saw sales increase 38 per cent on the previous week and 160 per cent on the same week the previous year.
Last year, the retailer had a pop-up store at Highpoint shopping centre in Melbourne, where customers could make last-minute purchases. This year, the retailer again plans to offer free same-day shipping in Melbourne in the final week before Christmas.
“We are just finalising our dates and everything in the lead up to Christmas now,” Hunting for George head of marketing, Jonno Rodd, told IRW.
Online health and beauty retailer Nourished Life is also expecting its free shipping offer to drive sales this Christmas.
“It’s so important for shipping to be free and fast at this time of year in the online retail space…it’s really often just the free shipping that gets people over the line, so we’ve made it a priority,” Nourished Life CEO and founder Irene Falcone told IRW.
The retailer has offered free shipping as part of its loyalty program since 2016, but typically sees an influx of sign-ups to the program around Christmas. Falcone said she is expecting to see a particularly significant increase in the number of sign-ups this year, after speeding up the processing of orders through the warehouse.
$300 million in parcel processing
Australia Post recently announced a $300 million investment in its processing capabilities to ensure that express and next-day delivery parcels move through the network on time. The investment comes amid rising parcel volumes, with online shopping surging by close to 20 per cent in the past 12 months.
Bob Black, group chief operating officer at Australia Post, believes that express delivery will become default in e-commerce in the next five years.
“Speed of shipping is a big driver for sales through e-commerce merchants,” he said in a statement about the study.
Of the 250 e-commerce companies analysed, the median price charged for standard shipping was $7.95, $10.99 for express and $14.90 for same-day delivery; however, the study found a great deal of variation in the way retailers defined ‘express’ shipping’.
“Our surveys of customer sentiment shows that unless you are offering your customers one- to two-day shipping, it doesn’t count as ‘express’,” Christopher Kernahan, senior partner at Pacific Consulting Group, said.
Other findings from the study include the fact that 25 per cent of websites have a free returns option for customers, and 51 per cent of websites offer Afterpay as a payment option.