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Faster Delivery and Shorter Delivery Time for E-Commerce
Delivery time, which is directly related to the logistics performance of e-commerce, is very important for e-commerce customers, and the e-commerce customer uses and benefits from the product only when the ordered product arrives.
Use Benefit
In its simplest form, the conventional retail (Brick and Mortar) business model consists of the supplier or factory-national and/or regional distribution center-store-customer arriving at the store and the customer bringing the return to the store, while the current e-commerce business model consists of the supplier or factory-e-commerce fulfillment warehouse-cargo transfer center-distribution of the product (order) to the customer and collection of the return from the customer.
Whereas in conventional retail trade (Brick and Mortar) the customer buys a good by going to the store and seeing, trying, touching, perhaps negotiating, in e-commerce he buys a good only by seeing it on the screen (as far as it is shown to him). In both cases, the important benefit of logistics is the “use” benefit of the good. This utility can be a need or a want or a desire. A good that is otherwise unusable has no utility for the consumer. While in conventional retail trade this benefit starts from the store, in e-commerce it starts with the delivery of the goods. The longer the delivery time, the longer it is delayed, or if the goods are damaged, incorrect or incomplete, the later the customer uses the goods and the later the benefit.
Customers’ Preference (Request) for “Short Time” Delivery
Today, customers are asking and demanding “how soon can I get it?”. While “9 days” delivery time was “accepted” in the 1990s, today the expectations regarding the delivery time have started to increase. The fact that “same day” delivery has become the standard expectation in developed e-commerce markets such as China, the US and Western Europe will soon affect emerging e-commerce markets such as Turkey. Especially young people, urban dwellers and those with time constraints may pay extra for “same day” delivery time.
Shorter Duration
As Amazon’s delivery time has decreased from “9 or more” days to “2 or less” days since it first launched in 1994, the size of the US e-commerce market has increased nearly 20-fold. Did shorter delivery times improve and grow e-commerce? or has delivery time gotten shorter as e-commerce has developed and grown? I think the development and growth of e-commerce may have forced even Amazon to develop more competitive delivery times.
Amazon’s introduction of “free two-day” and “low-cost one-day and next-day” delivery alternatives in 2005 actually triggered new customer expectations regarding the delivery time of e-commerce products, and many people may have even said, “No way, Lebron” when Amazon introduced the “two-day delivery” model for the first time in 2005. Since then, customer expectations for “shorter delivery times” have become one of the most important challenges for e-commerce companies to meet.
According to The Fabric’s “The 3 Biggest Last-Mile Challenges the Retail Industry is Facing Today” Report, 61% of customers define “fast” click to delivery as “next day or less” and 33% define “guaranteed 2 days or 2-3 days” for e-commerce companies, According to this report, 10% of customers define “next day or less” delivery as “2 hours”, 27% as “same day” and 24% as “next day”, while for e-commerce companies these rates are 1%, 4% and 18%, respectively.
The difference between customer demands for delivery “speed” and the approach of e-commerce companies stems from the inadequacy and lack of “can-do” competence (infrastructure, capacity, way of doing business) required by e-commerce companies to meet these demands.
There is a difference between what customers, especially Generation Z, expect “today” and what e-commerce companies implement “today”, and e-commerce companies also make a significant mistake by planning to do “in the future” what customers want “today”. Because customers want their requests to be met “today”, not 2-3 years later. Customers want e-commerce companies to respond just as quickly.
Faster and Shorter Checkout Time
E-commerce shoppers now prefer and will prefer products that are delivered correctly in less time.
According to “The 3 Biggest Last-Mile Challenges the Retail Industry is Facing Today” Report by The Fabric
- 92% of customers say that they would prefer e-commerce companies that offer “free guaranteed 2-day delivery”, 23% of them say “if they don’t, I won’t buy from them”, 35% say “I will only buy from them if there is no other alternative” and 24% say “it is not a must but it would be good if they do”. 60% of e-commerce companies are able to offer “free guaranteed 2 day delivery”.
- While 68% of e-commerce companies say that “free guaranteed 2-day delivery” is not really a competitive advantage, this contrasts with the 58%%23+%) of customers who say that “free guaranteed 2-day delivery” is a “must have”.
- 81% of customers stated that they would make more e-commerce purchases if “same day” delivery was provided.
- Only 25% of e-tailers are able to offer ‘same day’ delivery, despite 67% of customers saying they would pay extra for ‘same day’ delivery (37% ‘$1-4’, 23% ‘$5-10’, 7% ‘$11-20’ and 2% ‘$20 or more’).
- While 36% of e-commerce companies see “same day” delivery as a competitive advantage “today”, 73% of these companies believe that being able to respond to “fast” delivery expectations (requests) that customers want “today” and are willing to pay a price for will be an absolute necessity for competition “in the future (2-3 years)”.
When it comes to customer satisfaction and loyalty, many companies are looking for ways to speed up e-commerce order fulfillment and logistics operations.
Can Existing Logistics Solutions Deliver in Less Time?
For example, is “same day” or even “delivery within 2 hours” possible with current logistics practices?
Current logistics practices and logistics structures are not sufficient to address existing concerns about delivery times, to prevent problems, to avoid complaints and also to respond to customers’ desire for “shorter delivery times”. Different, radical and technology-oriented solutions need to be developed and implemented. This solution could be the “Last Mile Storage” model created by DepOrtak.
Last Mile Storage with DepOrtak
Last Mile Warehousing is the creation and distribution of micro-ecommerce warehouses close to the consumer that enable delivery within a maximum of 2 hours of order placement.
E-commerce customers’ desire for “shorter delivery times” can be realized with Last Mile Warehousing. With micro e-commerce warehouses in close proximity to consumers, e-commerce customers’ desire for “shorter delivery times” can be realized (delivery time can be reduced to 2 hours and even pick up by the customer if necessary); flexibility benefits for order changes (delivery location, delivery time, quantity, size, color, etc.) and resolution of errors (missing, damaged, wrong product, etc.); returns can be easily received (the consumer can bring it to the micro e-commerce warehouses within walking distance); returns can be easily received (the consumer can bring it to the micro e-commerce warehouses themselves).); returns can be easily collected (the consumer can bring them to the micro e-commerce warehouses within walking distance) and repeated deliveries can be avoided, for example, because the consumer is not at home (the consumer can collect them from the micro e-commerce warehouses within walking distance or flexible delivery time slots can be set that best suit the consumer).
NOTE: A customer is the person or organization that purchases the good by making a payment, while a consumer is the person or organization that uses the good. A customer need not be a consumer, while a consumer can also be a customer.
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