March 6, 2013

‘Same Day Delivery’ not a major Factor for Ecommerce Customers – Boston Consulting Group Study

Posted by eCommerce Best Practices in Selling
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order management 300x254 ‘Same Day Delivery’ not a major Factor for Ecommerce Customers – Boston Consulting Group StudyAccording to a survey done by the Boston Consulting Group (BCG), less than 10% of the customers will be enticed by the promise of same day delivery, when the purchase anything online.

BCG did this survey among a small sample size of 1500 US customers. All though the sample size is very small, 3/4th of the customers prefer free shipping when they purchase online.

And, unsurprisingly, lower prices would also be an attractive proposition for half of those surveyed.

If they have to pay for same-day delivery for an item bought online, the analysis found that consumers were willing to meet an average charge of $7.50 on a $50 purchase, a figure that is lower than the current fees being charged.

“The demand for this service and the willingness to pay do not match the cost of providing it,” said Rob Souza, a partner at The Boston Consulting Group.

The circumstances in which consumers would use the service tend to be exceptional, such as the need to buy a last-minute gift or an inability to get to a physical store.

The one group that is most interested in same-day delivery, affluent millennials earning more than $150,000 a year, constitutes less than 2% of the market, according to the report.

Retailers could consider offering same-day delivery on a limited number of products, the study suggests, typically ones that are small, light and carry high margins. Examples include electronics, office supplies or clothing, although even here consumers are reluctant to pay extra to have these items delivered promptly.

“We’re pretty skeptical about the ability of a stand-alone business to make money from this,” said Vladimir Lukic, who worked on the survey for the Boston Consulting Group.

The conclusion is that same-day delivery will remain a niche service, offered as a loyalty-building option by some retailers.

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