Rarely, if ever, have consumer habits and expectations changed more drastically than they have in the last few years. eCommerce has become essential, after so long being a ‘nice to have’. According to Australia Post, we spent $63 billion online in 2023, with one in seven households shopping online every week. However, as we shop online more, what we expect and demand from the delivery experience increases. At the same time our tolerance for a negative delivery decreases.
It’s a fine balance, and one that is being made more urgent by Amazon’s growing influence in Australia. According to Shippit and Jarden research, one in three Australian consumers said that Amazon – along with Temu and Shein – had lifted their post-purchase expectations. What’s more, almost two in three said they would be less likely to shop with a brand again if their delivery experience was poor.
With networks under significant strain to handle increasing volumes and delivery expectations increasing, the post-purchase experience becomes a key competitive differentiator. Customer-centric delivery can separate the leading retailers from the competition.
What do consumers want?
In what is an incredibly competitive market – and with economic pressures impacting consumer behaviours – the retailers who win are those who identify what their shoppers want, then cater to those expectations. With eCommerce exploding in the last five years, millions of Australians receive a delivery every month; for many, it’s far more regularly than that. That post-purchase delivery experience is essential. Simply receiving their order is no longer good enough.
Ultimately, consumers today want reliable delivery. If they receive something fast and reliably, constantly, they’ll stop thinking about any other brand or channel. That is how Amazon is winning such a significant market share. Perhaps the biggest takeaway from our research with Jarden is the correlation between delivery experience and repeat purchases and lifetime value. Indeed, 35% of consumers rate the post purchase experience as ‘extremely important’ while 96% say it is at least somewhat important.
In fact, only price has a greater impact on their choice of where to shop than the post-purchase delivery experience. This is where drop density and route optimisation come into play. By harnessing the power of insights and reporting, Shippit enables retailers to optimise drop density, strategically place inventory based on demand. Rather than randomly fulfilling and delivering orders, tools like Smart Routing and NowGo allow retailers and carriers to orchestrate deliveries with precision, further reducing waste, lowering costs, and enhancing the overall customer experience. With threats looming, it’s imperative.
Collaboration, partnerships and data
Last year, Amazon shipped 4.8 billion parcels in the US; more so than industry giants FedEX and USPS. It surpassed them by investing billions of dollars in to its infrastructure. As it invests in more state of the art distribution centres in Australia and expands its fleet of planes, trucks and drones, it is setting its sights on a similar monopoly here. On a like-for-like basis, no retailer or carrier can come remotely close to matching its investment or resources. That’s not to say there aren’t opportunities, though.
Against that competition, collaboration and partnership are not an option, they’re a necessity. Collaboration trumps monopoly, and it does so for the entire supply chain, from retailer to carrier to customer. Building networks and prioritising partnerships unlocks new opportunities for growth. If every carrier identified an area to exploit, and invested its CAPEX into being the best courier in, for example, regional New South Wales, it builds drop density. It’s an approach that other industries use to good effect.
Take Qantas, for example, which is very strategic in its approach to its partner network. It services the routes where it can fill its planes, and leverages partner networks on the legs where it cannot. Data, meanwhile, ties everything together – providing the insights that show them how to improve drop density, route optimisation and unlock partnerships and contingency plans.
Shippit exists to help retailers and carriers not only fulfil deliveries, but to improve their route optimisation and density – and therefore, their unit economics and carbon emissions – in the process. Our platform, and our vision is built upon a foundation of collaboration, partnerships and data. We allow the entire supply chain to tap into the data – based on the hundreds of millions of deliveries we fulfil for thousands of retailers – and open agnostic networks they need to drive efficiency, boost their bottom line and turn an acquired customer into a loyal, retained customer.
With cost-of-living pressures impacting millions of Australians, it’s unsurprising that price is the biggest factor impacting their purchasing decisions. But the fact that delivery is so close behind must be a big focus and priority for retailers. For those who treat that as an opportunity not a challenge, there are major gains to be made. Competition and consumer expectations have never been higher – and they’ll only grow as Amazon’s investment in the market does. Most retailers and carriers don’t have the resources to scale like Amazon, but collaboration, partnerships, data and route optimisation are sustainable and cost-effective ways to provide the customer-centric delivery that will power the future of eCommerce.