Consumer buying decisions have become increasingly complex – and in a world where Amazon and Alibaba have access to more data than the rest – the playing field is certainly not level. These behemoths – and the brands that mimic them – have used machine learning and AI for the last 5 years to power product recommendations, stoke consumer confidence and do basic forms of personalization, mostly focused on product and price.
More recently, these giants have turned their attention to factors that impact the purchase decision beyond product and price. And while speed is important, it’s not the determining factor that drives the purchase. These retailers are targeting convenience, speed, and ‘total cost’ including delivery as comparison points and conversion drivers. They’re not just focusing on “how fast” they can get items to retailers, but also how cheap, yet reliable, the delivery will be.
Amazon’s Tactics Are Winning Over Your Customers
Every brand needs to up its game when it comes to giving consumers control and visibility. They want more knowledge into how fast (and for how much money) they can get their coveted items. For example, in a survey of 100 random consumers, 62% said they prefer an explicit earliest delivery date at the time of check out in order to make the purchase.
But it doesn’t take a consumer survey to find out that the majority of consumers check Amazon for a similar product with ‘Free Prime’ delivery before they decide where to buy, just ask your neighbors. eCommerce leaders need to partner with their supply chain teams to leverage technology that can help them win on delivery as early as at checkout.
Accurately Promise Fast, Convenient Delivery
Estimated Delivery Date (EDD) is one of the new differentiators when making a purchase. All else equal, if your delivery takes 1-2 days longer than your competition, you’re going to lose that sale. Worse, if you predict a wrong arrival date, or and then fail a customer in need, you might not ever get them back. In fact, 83% of consumers say they won’t return to a brand after a single failed delivery.
Enter predictive analytics and supply chain AI weapons. While behemoths like Amazon and Walmart are no stranger to these, they can also be an effective tool for retailers of moderate size, especially when they leverage large, shared data sets. Instead of using generic delivery windows, say 3-5 days for parcel and 3-4 weeks for freight delivery, retailers should use predictive algorithms to provide tighter windows of greater accuracy. The difference between 2 versus 3-day shipping could mean a significant shift in conversion rate. Ballparking delivery timeframes simply isn’t good enough anymore, especially when the technology exists to do it better.
Predict Delivery Issues Before You Break a Promise
Of course, once you’ve taken the leap to tighten up those delivery promises and increased conversion as a result, unexpected delays can still happen.. A hurricane or a postal strike could result in a broken delivery promise. This doesn’t have to be the moment that costs you a repeat customer. Instead, similar data models can track your deliveries and identify when they stall or likely to miss their promised delivery window. Armed with that prediction, your team can do any number of things from upgrade a carrier service option, to expedite a new order or at the very least, communicate with your customer about the issue.
Supply chain innovation isn’t the place where eCommerce leaders turn first when they plot their course to growth and competitive advantage. But it’s important to note that brands like Glossier, Casper, Grove Collaborative and Rent the Runway all have business models that lean heavily into supply chain innovation and outstanding customer delivery as tenets of their success. Whether it’s delighting with a beauty box subscription, making the mattress purchase process easier, or pioneering sustainable and ethical consumerism, all of these companies powered their new approaches to meet consumer demand by increasing control of the delivery experience.
Leveraging the power of AI and predictive insights to drive supply chain innovations that yield better conversion is something all eCommerce teams should be thinking about now, not in 2025.
This post was originally published in the Retail TouchPoints 2020 eCommerce Tech Preview, and it was written by Kirsten Newbold-Knipp. Download the full report here.