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Fast delivery has become a major driver of customer satisfaction in today's on-demand world. A 2024 UPS Capital report shows that over half of merchants anticipate a 30% increase in shipping volume this year. This surge underscores the breakneck pace of the e-commerce industry, as consumers increasingly favor shopping with retailers that deliver within two days or less.
Merchants face a delicate balancing act in meeting these consumer demands: providing expedited delivery while managing rising operational costs. The 2024 Need for Speed report, commissioned by UPS Capital, explores strategies for navigating this challenge, drawing insights from 500 e-commerce merchants and 1,000 U.S. consumers.
Key Takeaways:
- The demand for even faster delivery is also growing. Next-day shipping has increased by 58%, and same-day shipping has surged by an impressive 164% in five years.
- Nearly three in fie-commerce giant has set a high bar, forcing smaller retailers to adapt or risk losing customers.
- More than half (54%) of consumers surveyed are willing to pay extra for expedited shipping. They’re especially eager to receive health and wellness products, electronics, and apparel within two days. In contrast, items like games/toys and furniture/home goods are less likely to prompt such urgency, likely because they’re seen as less critical to day-to-day needs or important events.
- In response to this competitive pressure, 42% of respondents have adopted faster and more affordable shipping options to match the quick delivery promises and lower costs that attract customers to international retailers.
- Meeting the demand for faster delivery comes at a cost. Over four in five (84%) merchants surveyed report that these expectations have increased their operational expenses. Notably, 37% now spend more than $100,000 annually on expedited shipping (excluding staffing costs).
