Amazon sets the delivery standard with which all others will be compared. Fast delivery has indeed become table stakes and Amazon continues to push the boundaries of what’s possible. No doubt other major players who have the financial wherewithal to play the profit killing next-day delivery game will match Amazon – most other retailers can simply watch and wonder.

Yes they do. And it is unfair to other retailers and makes the playing field very uneven. Consumers are ridiculous sometimes as well. If you ordered something that is critical – and must arrive quickly, OK, that should be expected and may cost a few bucks to have it arrive overnight. But gifts for the holiday season? Why is this critical? Order them, have them arrive in let’s say two or three days and then even if they got the order wrong, there is still time to get it right. I think that sometimes we have become so needy that if we don’t get immediate satisfaction, we become cranky. How are most retailers expected to compete with Amazon and still make money?

Amazon’s execution plays a huge role in setting expectations for how everyone else executes online orders. It’s their primary competitive weapon and they leverage it at every opportunity. Amazon makes an announcement and everyone else reaches for the aspirin and antacid.

The Amazon experience (free fast shipping, easy returns) has set the bar, athough in reality Amazon has buried the cost of “free and fast” in a Prime membership fee, which is barely remembered when that “buy now” button is pressed for each transaction. Other retailers have to bury these costs more in plain sight, likely in the product’s retail price, or spreading it through a minimum basket value. It’s not a level playing field, but it is table stakes today.

We did a study on home delivery way back in 2015, and even then consumers weren’t keen to pay for shipping and felt no need to pay to get things faster.

Still, we don’t always need everything right away, so it’s not always a punishment if a retailer can’t deliver in two days.

Brands who seek to make people’s lives easier, help them do things faster, and/or save them money will be rewarded. However, once expectations are set, they continue to rise, mostly driven by an expectation of convenience. Amazon has set the bar with fast, free delivery and this is now the standard…until it can be done faster.

Of course they want fast and free shipping. And if you asked them whether they’d want products to be free they’d say yes to that, too. The challenge for retailers going forward is to balance customer expectations with the necessity of remaining profitable, which is no easy feat when the competition is subsidized by its cloud business every year.

If it’s readily available, who wouldn’t want any perk they can get including fast and free shipping? The reality is (as many have said here over the years) free shipping is an illusion that’s rolled into the price of goods. Elevating shipping to faster and faster intervals increases the cost of logistics/inventory management/shipping that consumers will be paying for as well.

All that really happens is smaller businesses without scale get made more uncompetitive and eventually fade away. In time, that allows the remaining “at scale” players to creep selling prices upwards and hide the cost of fast/free shipping right under consumers’ noses.

Shoppers: be careful what you wish for.

Delivery is a service that forms part of the online transaction so in the minds of consumers it is an integral part of their purchase. However, that service is not free: it comes with a variety of costs attached such as handling, packaging, and shipping. These costs are increasingly being subsidized or paid for by retailers, with a resultant impact on their bottom lines. This survey underlines the challenge of reversing that position. Essentially, customers are being given something for nothing. That can’t now be taken away without considerable consequence.

The short answer is yes. Amazon has been setting the bar for delivery standards for some time. Each time it raises the bar it forces others to try to match it if they can. The development of its own delivery ecosystem makes it harder and harder for others to play catch up, but they know if they don’t they will lose sales and customers.

Ship fast, ship free. These have certainly occupied our conversations as of late. It’s kind of like this: When a customer experiences a wonderful service, they become conditioned to always expect it. When the battle ground for the customer becomes free and fast delivery, that transitions the delivery question from a “wonderful experience” to “expected” and “demanded.” Table stakes? Yes, indeed.

Yes and yes. Like the cat who tasted fresh tuna there is no going back to canned tuna.

Just a thought…

In some situations doing the opposite of what everyone else does pays off big time. What if someone flaunted the idea that reasonably-timed delivery (a week perhaps) is actually more economical, just as convenient and goods will arrive more carefully packaged rather than thrown in a box five times bigger than needed? For example, when I see a sign for a “Quick Shoe Shine” and see they use an electric polisher, I won’t stop. If I saw “Shines done totally by hand, 10 minutes for a quality shine” I’d stop if I was wearing sneakers.

Likewise, do I want dinner served to me 60 seconds after I order it? Whisky or wine bottled yesterday? “Fast and free” is a totally overrated gimmick!

Do they want fries with that? Look, this is what is known in the complex world of sophisticated high wire statistical analysis as “Conformation of the Obvious” — or the ability to prove through survey that which is already known by experience, observation, and fact. The answer to almost any question involving improving shopping is, “cheaper — free being the best option — and faster.” Not a huge surprise. Even less of a surprise when, as I’ve been observing here for what seems like forever, retailers sacrifice margins in a fruitless attempt to build “loyalty” by giving away as much as the next company. Did Amazon start it? Sure … but who cares? The “Free” Delivery Genie is out of the bottle — and margins will never be safe again.

It’s now all about removing “friction” both in-store and when delivered. Delivery friction includes cost, timing, and anxiety created by either delivery delays or perceived possibility of problems with delivery. I’m going to sound like a broken record here, but really can’t say it better than was quoted above, “‘For brands that like to think they aren’t competing with Amazon, the data clearly suggests that shoppers think they are,’ said Kirsten Newbold-Knipp, chief growth officer at Convey…” Amazon continues to set the pace in frictionless commerce.

No one needed a study to know this.

Ah, what tangled webs we weave for ourselves. Amazon establishes economically unsustainable expectations among consumers because their investors are willing to allow it to happen. Then the rest of retail has to follow suit.

I’m reminded of the early US cell phone wars where the phone was free. It set expectations among consumers which couldn’t last. It also set up tremendous dissatisfaction with cell companies (because it forced long term contracts).

Truth is, Amazon is beginning to suffer from it’s ability to offer these things — I’m hearing more Amazon shipping dissatisfaction — when they miss, when there’s confusion over what IS overnight shipped, when they blow an order, and when they box one simple product in a massive complex of wasted packaging.

Some retailer will build tremendous brand value by explaining shipping costs and making it all become rational for consumers. But it will take courage to make it happen.