Asked to identify the top-3 improvements to their online shopping experiences that would motivate them to shop more, 74% of consumers surveyed by the Boston Consulting Group (BCG) cited free delivery, according to a new BCG study. The study, which was designed to measure the market opportunity of same-day delivery, found just 9% of respondents indicating the ability to receive purchases the same day as a top-3 online shopping motivator, suggesting that this is of far less appeal to consumers than other factors such as lower prices (50%) and free returns (35%).
The high level of importance placed on free shipping and prices mirrors recent study results from Baynote, which found those two factors to be the most influential to holiday shoppers’ final online shopping decisions. An earlier study from comScore and UPS similarly found that shipping costs not only affect online customer behavior, but also customer loyalty.
The BCG survey results are a strong indication that cost is more important to consumers when shopping online than other factors: each of the top 3 responses indicated were cost-related (free shipping; lower prices; and free returns). Options related to delivery timing – such as faster delivery options, guaranteed delivery timing, same-day delivery, and flexibility of delivery time and place – all appeared at the bottom end of the scale.
Indeed, when shopping online, more consumers reported using whatever delivery option is low-cost or free than specified a delivery period, such as 2 days, or 5-7 days. And when considering their next online shopping experience, respondents were far more likely to look at basic delivery factors such as price and ease of returns process than services such as alerts when the delivery is nearby, or same-day delivery.
Given those results, it’s not surprising that willingness to pay for same-day delivery is strongly correlated to the value of the products being purchased. That is, for commoditized (and presumably lower-cost) items such as books and music and office supplies, few consumers would be willing to spend more than $10 on a same-day option. By contrast, for large appliances and furniture, the proportion willing to spend that amount grows substantially, to around half or more.
The study does find a potential market for same-day delivery among affluent millennials, defined as 18-34-year-olds with annual household income over $150,000. The researchers suggest that 28% of this group would be likely to adopt same-day delivery instead of purchasing in-store, versus 18% of average US consumers.
About the Data: The BCG study describes its methodology as follows:
“In November 2012, The Boston Consulting Group conducted an online survey of 1,500 U.S. consumers to understand their e-commerce purchase habits and preferences, delivery service needs, and potential demand for same-day delivery. The 1,500 consumers were representative of the U.S. population in terms of gender, ethnicity, age, and household income. Members of BCG’s Transportation and Logistics practice, Retail practice, and Center for Consumer and Customer Insight analyzed the data.”