In the dynamic world of eCommerce, retailers have to deal with rising customer expectations in terms of faster deliveries and convenience. Online shoppers are increasingly demanding “same-day deliveries” of their online orders. The latest statistics reveal it all:
- Over 40% of customers are willing to pay extra for the convenience of same-day delivery.
- 24% of shoppers are willing to pay more to receive their orders within one to two hours.
- 45% of retailers have succeeded at making same-day deliveries to their customers a part of their value proposition.
Of course, on-time deliveries play a crucial role in the purchase decisions of online shoppers. Same-day (or even one-day) deliveries can easily improve the customer’s perception of the brand. Let’s look at some of the “downsides” of not implementing “same-day deliveries” for eCommerce brands, and the obstacles to achieving the same.
No “same-day deliveries” – Here are the downsides
Same-day deliveries offer benefits like shopping convenience to shoppers. For eCommerce brands, this delivery model also offers benefits like lower inventory costs due to smarter inventory planning. Same-day delivery also improves customer satisfaction and their brand experience. Satisfied customers are more likely to:
- Make repeat purchases.
- Convert into loyal customers.
- Recommend your online store to family and friends.
On the flip side, brands that do not deliver on the same day face the downside of dissatisfied customers. First-time shoppers are also more likely to abandon their shopping carts if they see a delivery window of over 2 days.
A high shopping cart abandonment rate is among the major challenges for eCommerce companies struggling to make same-day deliveries a reality. High cart abandonment can directly impact the company’s sales and revenues. According to 2024 figures, abandoned carts result in a revenue loss of $18 billion each year. In the U.S. alone, the value of items in abandoned shopping carts added up to around $705 billion.
For eCommerce stores, same-day delivery can give them a competitive advantage. This is why major retail brands like Amazon and Walmart are investing heavily in automation systems and renewed warehousing strategies than can help them ensure fast deliveries. To gain a competitive advantage, Amazon is also investing in drone-powered deliveries and autonomous vehicles. These emerging trends will significantly reshape the “same-day delivery” model in the future.
Without same-day deliveries, eCommerce companies can lose brand reputation due to low customer expectations. For example, “impulsive” buyers are more likely to purchase from brands that offer faster deliveries. Shoppers are more likely to expedite their online purchases (instead of postponing them), thus boosting their brand reputation.
Achieving “Same-day deliveries” – Here are the obstacles
Despite the benefits, most eCommerce brands are unable to offer the facility of same-day delivery to their customers. Here are some of their main obstacles:
- Limited delivery partners
Most of the largest eCommerce brands depend on third-party delivery partners to make the last-mile delivery from their nearest warehouse to the customer’s place. To keep pace with their growing business, eCommerce companies need more local order fulfillment centers to make same-day deliveries. This is not cost-feasible for most eCommerce companies.
Additionally, last-mile delivery partners face challenges like high-cost pressures and driver shortages to fulfill customer orders on time.
- Lack of micro-fulfillment automation
To make same-day deliveries, retailers must have a warehouse in proximity to the consumer’s shipping address. The more the distance, the more the shipping time, thus making same-day delivery more challenging.
To meet this customer demand, online retailers have set up micro fulfillment centers (MFCs). Essentially, MFCs are smaller warehouses that are situated in proximity to consumers.
In addition to having a network of MFCs, retailers must also automate them to meet challenges like:
- Unpredictable customer demands
- Lack of space optimization in the MFCs
- Lack of integration with other systems like order management
- Lack of operational visibility
More customers want to track their same-day delivery status on their eCommerce apps. However, retailers working with delivery partners often lack operational visibility into their last-mile order location and status. This problem worsens whenever delivery partners make a missed delivery attempt. Besides impacting the customer experience, lack of visibility can add to the company’s operational costs.
Additionally, companies lack real-time visibility into their inventory levels across warehouses in multiple locations. This makes it challenging for them to meet same-day deliveries.
- High delivery costs
Without automating order fulfillment, companies cannot manage same-day deliveries with cost efficiency. By using outdated dispatch applications or manual processes, retailers cannot address questions such as:
- Which delivery partner (or driver) is closest to the delivery address?
- Which is the most cost-effective and efficient navigation route to deliver orders to customers on the same day?
eCommerce retailers also have to bear higher delivery costs when price-conscious consumers are not willing to pay for shipping and expect free deliveries.
- Lack of scalability
With the gradual increase in online orders, many eCommerce shops are unable to scale up their order fulfillment operations to meet the higher demand. To fulfill same-day deliveries, they must be ready to scale their operations based on the daily demand. This involves implementing scalable fulfillment processes and replicating them across delivery centers.
Conclusion
Without the convenience of same-day deliveries, eCommerce brands are unable to elevate their customer experience, thus leading to a loss of competitive advantage. By deploying the right order fulfillment solution, retailers can facilitate faster same-day deliveries and execute real-time visibility into their operations.
At Cartesian Kinetics, we understand the importance of micro-fulfillment centers and how they can facilitate same-day deliveries for our customers. Our in-house solution Carte+ is designed to make MFCs more efficient and cost-effective.
Are you striving to achieve same-day deliveries? We can help you. Reach out to us today!