Finding Your Delivery Sweet Spot: Knowing What Services to Offer When

Large item delivery is a challenging business. The goods are valuable, timing is critical and communication is key. Coordinating all of these elements with a positive outcome takes serious care and attention to detail. Easier said than done.

How do you normalize and communicate various white glove services across all of your carriers? How often do customers end up disappointed or confused with the service level they purchased? Do you charge for shipping or is it free, and at what level? How do you communicate the differences and encourage shoppers to choose the right one?

The answers to these questions force retailers to build out complex carrier networks that are as capable of delivering a sofa to a five-story walk up as getting a crib to a home in the suburbs. This means additional carrier negotiations and RFPs, as well as additional challenges in managing that network and analyzing the data it produces.

Additionally, the pressure to compete with Amazon has led many retailers to believe that offering “free delivery” is a competitive necessity. Large item shipping costs can vary greatly depending on service level, location and weight and size of the product. In response, many retailers have opted to limit customer choice in favor of greater pricing predictability.

We surveyed the top 100 retail sites with active home delivery programs to identify the “standard” for delivery options and pricing. Here’s what we found:

By far, the most common set of options include providing only curbside or only white glove delivery. This limited range of choices only sets retailers up for missed expectations. In either scenario, forcing shoppers into a low cost option or an automatic upgrade can put the sale at risk: two-thirds of shoppers will choose a retailer based on the availability of multiple delivery options.

We’ve all seen what chasing Amazon has done to margins industry-wide. When it comes to large item delivery, long term success will require a smarter approach. Today’s tech platforms provide rich data and analytics that inform more intelligent decisions re conversion, satisfaction, and margin. The challenge? Connecting the dots across traditionally disparate data silos.

As you work to identify the approach that makes sense for your business the key is to not assume that what is right for one person is right for everyone or that what is right for one product is right for every product or even that what is right with one carrier is right with all carriers. Here are a few criteria to consider:

Does the product (and the profile of the person buying it) have unique shipping requirements?

Customer satisfaction and carrier performance are often measured at the company level, but how often do you look deeper for insights into specific products or product categories. Are customers regularly complaining because the packaging for that mirror is insufficient and it keeps arriving damaged? Mine for insights and create shipping strategies that are personalized to your products.

One example of a product category that is ripe for a personalized strategy is cribs. A crib is most likely being shipped to an expectant mother who may or may not have the ability to help unload a truck. While a free curbside delivery may be the most financially attractive option for the customer, without sufficient warning about what exactly curbside means, the experience could be a disaster. Additionally, a positive experience for this customer increases the probability of additional orders (i.e. toys, rockers). When communicated in the right way, a strategic upgrading to a value added service like room of choice or assembly, could reap long term rewards.

What’s the customer’s history with your brand?

The experience shoppers expect, and their tolerance for issues, has a lot to do with their past experiences. 70% of shoppers are unlikely to return if they’ve had a bad experience previously, but for the 30% that do return it’s even more imperative that you get the experience right on the next go around. Additionally, 43% of shoppers expect that the delivery experience be personalized to their order and purchase history – including their membership in loyalty programs. Offering a free upgrade can be an easy way to instill loyalty and drive repeat purchases for repeat customers or for those who had a subpar experience in the past.

Do you have a common definition for service levels across all of your carriers?

Being able to offer more options to customers requires that you the services sold are equal no matter where in the country and which carrier delivers that package to its final destination. This can be a challenge given that nearly every carrier defines their services and accessorials differently. Start by making a list of all of the options including what your definitions of those options are. Map your network to those definitions including service areas. If you identify service areas where gaps exist you may want to consider expanding your network to accommodate it.

In an ideal world, these complex decisions can be made at checkout using dynamic pricing and decisioning that considers service level, product selection, and lifetime customer value. In the absence of that capability, a post-purchase service upgrade could be a viable alternative to ensure the experience doesn’t suffer. Examples of this could include promoting a carrier service upgrade on order confirmation pages, in follow up emails, or via well-timed, opt in messaging. One thing is for sure though, as large item categories continue to grow online, the customer’s desire for delivery options will be a significant contributing factor to whether retailers win or lose in years to come.