How Can Retailers Avoid Disappointing Increasingly Demanding Shoppers on Delivery?

If recent reports are to be believed, retailers face an uphill battle when it comes to completely fulfilling the ever-increasing expectations shoppers are carving out on delivery standards.

According to a Nov. 10 report issued by ShipBae based on the polling of 2,000 U.S. consumers, free shipping is now an absolute demand coming from shoppers – 93% said they’d walk away from a purchase at least occasionally due to a lack of free shipping – and an even greater cohort (96%) stated that “their shipping experience directly impacts their trust and confidence in a retail brand.”

“The findings underscore how closely shipping ties to the customer relationship at a time when rising shipping costs are squeezing retailers' profit margins. For holiday shoppers, shipping factors into both their decision to buy and whether they'll shop with that brand again. From shipping fees and delivery speed to tracking and problem resolution, consumers have clear expectations that extend well beyond checkout,” a press release tied to the report read.

Other prominent findings detailed by ShipBae’s survey:

• It’s not all bad news for retailers: Opportunity exists to capitalize on the desire for free shipping, with 60% stating they’d pile more items into a cart in order to reach a free shipping minimum, and a vast majority (84%) would take an existing $35 basket to $50 in order to qualify for free shipping.

• Frictionless returns are also expected: Nearly all (88%) of respondents said they are less likely to buy from a retailer if return shipping isn’t free, rising to 92% of high-income consumers.

• Shipping visibility presents a problem for social platform marketing: Dubious shipping visibility standards on purchases made on Facebook, Instagram, TikTok, and Whatnot are dissuading buyers – 92% suggest they’re not privy to as much shipping information on purchases made through social platforms. Further, roughly 60% of those polled are hesitant to purchase through these platforms due to the above.

• Failed deliveries are serious business: If a package is lost or delayed, more than two-thirds (67%) hold the retailer, rather than the carrier, responsible. Additionally, 29% of those polled stated that they’d stop buying from that seller after a single failure to deliver.

Fast Shipping, Free Shipping, and the Cost Burden

ShipBae’s report dovetails neatly with a Nov. 10 Locus survey on some fronts – agreeing on the fact that today’s shopper has set a very high bar on shipping standards – and diverges on others. For example, the ShipBae data indicates that nearly two-thirds (63%) of shoppers place greater emphasis of fast shipping versus free shipping, while Locus data (admittedly zeroed in on holiday shipping/shopping) suggests cost and certainty outweigh speed for consumers.

“When choosing where to purchase a holiday gift online, 43% prioritize the lowest total cost, 40% prioritize certainty that it will arrive by the promised date and just 8% prioritize the fastest delivery,” Locus’s report stated.

"Shoppers are telling retailers that price matters, but so does knowing their gifts will arrive on time," said Locus founder and CETO Nishith Rastogi. "For retailers, the opportunity starts at checkout, where delivery options need to reflect what their networks can realistically fulfill. Connecting checkout with real-time logistics data helps retailers offer dates shoppers can rely on and puts them in a stronger position to win business this peak season."

And for ShipBae, the takeaway was centered around keeping customers happy – even when facing a potential loss of short-term profit.

“There's no question higher carrier rates and holiday surcharges will eat into merchant margins this year. Recouping those costs at checkout may make sense on paper, but in practice it risks losing both the sale and the customer," said Jude Kim, co-founder and COO of ShipBae.

"The priority will now be securing the most competitive rates and making smarter carrier decisions, while using free shipping thresholds, free return labels, and accurate tracking to keep shoppers coming back. Retailers that get this right will be better positioned to protect both their profit margins and preserve brand loyalty this season,” Kim added.

Questions for further discussion:

• Do you believe that retailers can (or even should) climb down from the mountain of expectations, and the associated costs, surrounding current shoppers’ delivery expectations? If so, what existing promises or differentiators might be the wisest to curtail?

• What can be said about the data suggesting that the majority of shoppers would hold the retailer, not the carrier, responsible for shipping failures – and that nearly a third would stop buying from a seller entirely after just one incident of a failed delivery? Is this to be expected, or is there something else to be gleaned?

• Should retailers simply accept that free shipping and free returns are here to stay, or is there another path forward that protects margins while keeping customers happy? Do you believe shoppers would accept a gradual shift in retail shipping and delivery practices?