Method of delivery is apparently the new black in retail marketers’ holiday ’13 arsenal. And, it’s on the minds of the commerce masses.
This week, after stumbling back from a Q3 earnings call that painted a somewhat stormy picture of its holiday ecommerce expectations (“deceleration” was the word used), eBay made a move to acquire UK-based online delivery startup Shutl to fuel its aggressive eBay Now expansion plans.
In an interview prior to the eBay buy, John Kelly, Shutl’s EVP of retail, formerly a VP of sales for both TellApart and Criteo, told AdExchanger that “same-day delivery and predefined delivery windows is where this industry is going. Amazon’s made an investment. eBay and Google have made investments. The question is not whether this will occur, it’s when.”
In Q3, free shipping was applied in more than 50% of eBay's US transactions. The notion of “same-day,” or even, “in less than a few hours,” delivery, as is the case with the eBay Now service, was also an object of fervor on Amazon’s Q3 earnings call yesterday.
“Over the past 10-plus years … we’ve added a lot of selection and fulfillment centers – the result of that being [inventory] by default that’s closer and closer to customers,” remarked Tom Szkutak, Amazon’s CFO, during the call. “As a result, our speed of delivery has improved. … We will continue to look for ways to satisfy consumer demand.”
How the consumer wants to buy – or, in this case, receive – a product will continue to drive investments and M&A from the larger commerce players.
“No one builds more fulfillment centers than Amazon because Bezos is absolutely committed to same-day,” commented Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment-banking firm based in New York. “He is focused on this 24-hour, free delivery like a laser beam because that’s what the customer wants: instant gratification. And they don’t want to pay. This is how he operates and I believe he will do it.”
According to Shop.org’s eHoliday 2013 Pre-Holiday study, the top three promotions retailers will put into practice this holiday season include: percentage-off coupons, at 45% of retailers saying they would use them; dollar-off coupons, 29%; and free, standard shipping with conditions, at 29%. There was more delivery-focused data – 47% of retailers expect to increase free shipping offers this holiday season compared to just 33% last year.
But, where’s the value for the marketer? Judging from Shutl’s model, the data collected throughout the order process could hold key insights for retailers. Like location-based car-service app Uber, one of the key components of the algorithm is the consumer feedback loop (which can translate into localized offers or drivers who are never cycled back through your service path if you feed them a low-star rating).
Similarly, a Shutl user has the ability to not only see the full delivery experience in real time on the Web, but is able to provide feedback through the location-based connection to the courier and delivery process that Shutl provides.
By evaluating consumer feedback at the moment of decision, or when a consumer is about to purchase and select their delivery method, retailers begin to get a sense of, “Did the consumer abandon a cart because they didn’t like the selection?” or “Are they potentially going to buy in-store?” By having access to purchase history and tying that to delivery-related data, a marketer can begin to see how a “free, same-day delivery” offer or promotion served at the moment of decision could hold crucial impact on the sale.