Free delivery and returns for consumers vs. exploding costs and declining margins for parcel service providers: What is important for consumers when they receive their online purchases and how are their expectations matched by the services provided by delivery companies? How can both suppliers and consumers have an optimized parcel delivery on the last mile?
“One size fits all” – this concept does not work when it comes to parcel delivery services. Amazon is trying to solve the balancing act of customer satisfaction and cost minimization with the Amazon Day. Since the end of 2018, Amazon Prime members in selected areas of the United States can pick a weekly delivery day, when all their Amazon purchases will be delivered. The e-commerce giant is attempting to give customers more control over their parcels while increasing productivity and profitability by driving more packages per delivery stop.
Numerous studies have been carried out on consumers’ expectations of receiving their online orders. However, to take appropriate measures from the knowledge gained seems like a mammoth project! There is no such thing as the “egg-laying wool milk sow” for parcel delivery. Postal service providers and start-ups need to define their service promises, continuously check that they are being kept and discover delivery niches.
Service quality counts – at whatever cost
Faster, more transparent and more flexible delivery at no cost? Although it may seem that consumers have these expectations, it turns out that there is also an awareness of differences in service quality and a willingness to pay extra for flexible, reliable, fast and environmentally friendly services (see Parcel Study 2018 by PwC).
These findings correspond with the results from our most recent E-Commerce Monitor. A good third of respondents up to the age of 65 would be prepared to pay an extra charge of 2 to 5 Euros for a parcel delivery after 8 pm. The willingness to pay a surcharge for delivery services on Sundays and public holidays is even greater.
There is still room in these niches
In addition to more flexible delivery times, there are further gaps in the service portfolio from the recipients’ point of view. According to the Spectos E-Commerce Monitor, in Germany two thirds of consumers would appreciate to have shipments and returns picked up at their doorstep at an agreed time.
The parcel carrier in its classic form could soon be replaced by crowd delivery. For a fee, consumers could become parcel deliverers themselves. The idea is reminiscent of the concept of the US company Uber: private individuals signal that they are currently available and then accept incoming orders.
It doesn’t make sense to look for an “egg-laying wool milk sow” for the last mile. Instead, postal service providers, start-ups and online retailers have to question whether their services meet the needs of their target groups and whether service promises are actually kept. An unsuccessful parcel delivery will add a negative touch to the entire online shopping experience, to the detriment of the online retailer. Transit time measurements can help to monitor the quality of delivery and to regularly check the quality of service provided by postal service providers.
Interested in finding out what recipients expect from parcel delivery?
In December 2018, we conducted a study with our market research panel, the Spectos Mailagenten. Almost 1,500 study participants answered our questions about parcel delivery. We are happy to share the study with you free of charge. Please send an e-mail with the subject “E-Commerce Monitor” to email@example.com or fill out our contact form.