Despite retail spending holding steady in recent months, the approaching peak season cannot come soon enough for Australian retailers. We’re expecting another bumper period for ecommerce, with millions of orders, worth billions of dollars, flowing from retailers to shoppers in the months ahead. The eCommerce boom presents opportunities, but challenges too.
Today, delivery is one of the biggest drivers of loyalty. A consistent, reliable delivery experience can turn one-off shoppers into loyal long-term customers. A poor delivery experience, meanwhile, could see you lose them for good. Those outcomes are heightened during peak season, when delivery matters the most. Shippit’s State of Shipping Report sought to understand the key delivery trends, and their impact on both you and your customers.
But what did it find? And how can you deliver when it matters most?
Costs up, but delivery times improving
Perhaps the key takeaway from the report – which surveyed thousands of consumers and retailers, and analysed over 200 million orders on Shippit – is related to cost and delivery times. The average standard delivery cost rose from $9 in 2018 to $10.26 in 2024, while retailer-advertised delivery estimates increased from 2 days to 5.6 days during the same period. There were similar trends for express, too.
Interestingly, actual delivery times are improving, down from 2.6 days in 2023 to 2.2 today. It’s also considerably less than the 5.6-day delivery estimates. One possible explanation for this discrepancy is a fear of over-promising and under-delivering. Instead, retailers are under-promising so they can over-deliver. If delivery estimates are too inflated, though, it will impact conversion potential – and that has a huge impact on your bottom line.
Think of the millions of last minute orders made just prior to Christmas; if your estimates are too long, you’ll lose sales, irrespective of your actual delivery times. Instead, you should be using real-time data and actual delivery times to inform accurate estimates. This gives you the best chance of a sale while also ensuring you meet your delivery promises at checkout.
Free shipping on the out?
In 2018, 81% of retailers provided free shipping, but today just 70% do. What’s more, the average threshold to qualify for free shipping has increased by 20% over the last six years. This reflects a strategic shift by retailers to manage rising operational costs while still incentivising larger purchases. This change highlights a critical balancing act between managing profit margins and meeting consumer expectations.
But what can you take from that? With cash-strapped shoppers eager for savings, promote your free shipping – and any thresholds – clearly, prior to checkout, to incentivise them to add to their cart. Transparency, always, is crucial. If your thresholds to qualify have increased, ensure your customers know prior to receiving a shock at the checkout. Proactive, clear and transparent communication can be the difference between churn or conversion.
Same day shipping gap
There is a considerable gap in the supply and demand of same-day shipping, with 60% of customers willing to pay for it, but only 9% of retailers offering it. This gap underscores the logistical challenges involved in providing same-day delivery and the growing demand for rapid delivery. Considering how important it is to meet customer expectations, you must address this gap to remain competitive. When shipping is viewed as an investment rather than a cost centre, there are gains to be made.
Reliability rules supreme
Despite their need for speed, the report revealed that reliability is the top priority for shoppers. According to a Shippit and Jarden whitepaper, which fed into our report, half of shoppers won’t return to a brand after a poor delivery experience. One in three say their expectations are increasing as a direct result of Amazon, which is threatening a monopoly – like in the US – through its quick, reliable delivery.
Consumers value consistent and reliable service over rapid delivery, so it’s crucial you fulfil your delivery promises and maintain transparency throughout a delivery. A parcel that arrives after two days, when they weren’t expecting it for 5.6, might be more of an inconvenience than a pleasant surprise if they’re not home to accept it.
To navigate the evolving delivery landscape, you must understand your shoppers’ expectations. That is always important, but particularly so during peak season when the volume – and stakes – are so much higher. With a commerce platform like Shippit, you can meet your customers’ needs for reliable, convenient and transparent delivery. Ultimately, that’s what will drive repeat purchases, loyalty and revenue before, during and long after peak season.
Rob Hango-Zada is co-founder and co-CEO of Shippit.