While the industry was just debating the shift from physical shopping to online a couple of years ago, we’ve progressed to the stage that we are talking about mobile vs. desktop instead of physical vs. online. Yes, times are changing and the change is happening quickly. Another transformation in the shopping scene is the shortening of the delivery times. The demand is high and the market is reacting in an “express way” with under-one-hour delivery options.
In today’s mobile-driven world, almost everyone owns a smartphone. According to Pew Research Center’s report from 2019, 81% of U.S. citizens own a smartphone, and the numbers are rising rapidly. On the e-commerce front, 79% of smartphone users have stated that they have made a purchase online using their mobile devices in the last six months. The mobile shopping industry already has a title of its own: “m-commerce.” According to Worldpay, 59% of all e-commerce sales come from mobile devices, and Statista’s report claims that the number is expected to reach 72.9% by next year. That is a massive growth that no business has faced before.
Of course, the retail industry has always been aware that the future of e-commerce was mobile, but the predictions never envisioned that the shift would be so swift. As expected, the main force behind the transformation is the new generation of shoppers. For millennials, executing a task the mobile way is preferred and, judging by their shopping patterns, the younger generation live in an all-mobile world. GfK’s chart offers a clearer picture of how the younger generations are more mobile-driven:
Yes, the new generations prefer mobile shopping but when you look at the background, the inevitable rise of m-commerce makes a lot of sense. Unlike the conventional e-commerce models, the mobile world offers a more unified experience thanks to social media sites and their easy-shopping integrations. For the regular consumer, it is almost impossible to run away from the motive to click. That’s the main reason we see low conversion rates in mobile devices; 1,56% in smartphones and 3,71% in tablets. But in the end, mobile is still the best way to approach wider consumer profiles and it is only getting better.
In an environment where people are so used to acceleration instead of speed, it was only natural for delivery times to be affected. Although there had previously been relatively faster delivery services that cost customers extra like Amazon Prime, it cannot meet the demands of the new customer who wants whatever they buy on their doorstep as soon as possible. A brand-new delivery type called ‘fast order delivery’ or ‘on-demand delivery’ is finally more widely available for both shoppers and retailers. Thanks to tailor-made tools like ours, it is now easier than ever to join the market with minimal effort.
Looking at the numbers, fast order delivery is predicted to be the new normal in a couple of years. Although the demand for express delivery has always been there, what made the retailers take action was, of course, the COVID-19 pandemic. Especially in the FMCG front, there has been a massive rise in demand for same-day delivery. Industry giants like Walmart began offering an express delivery option for $10 and, even with a relatively high price tag, the service was widely successful. The main reason was the immense need. According to OptimoRoute, the food delivery market has grown by 151% between March and April 2020, and the more encouraging thing is that it hasn’t slowed in the following months.
According to market research by Gartner, 68% of online shoppers want brands to offer on-demand delivery options and 37% of these customers tend to shop with express alternatives.
Although it is a relatively new area in the industry, because of its rapid growth researchers have already begun publishing useful insight into how fast order delivery models can be more profitable than conventional ones. One of the latest investigations by Gartner states that fast order delivery improves customer satisfaction by 18%, and that it also has a massive effect on customer loyalty. According to research, express delivery options increase customer loyalty by 5.6%. In short, with fast order delivery, companies can gain points in two of the most essential areas of modern-day retailing.
Another interesting statistic is on the revenue front. Gartner’s report shows that companies that focus on fast order delivery earn an average of 11 U.S. dollars more than the companies who follow conventional delivery models. Although the reasons may vary between regions, it is safe to say that minimum basket limits, delivery fees, and slightly higher pricing on products are the main elements in increasing revenue in express e-commerce models. In the end, it is mainly about analyzing customer behaviours and creating special deals that satisfy both companies and customers.
Thanks to the advanced technologies of today, almost every single task is becoming easier to perform. The same rule applies to building a massive operation like an express delivery model. For our part, we have tailor-made a platform to help businesses while creating a seamlessly-working practice. Our express e-commerce module handles everything on the digital front so companies can concentrate on the physical arena.
To learn more about Ubimecs Express E-Commerce Platform, visit our page.