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Monday, April 12, 2021

Web retailers push delivery boundaries

Drew Harwell (c) 2014, The Washington Post. To compete during what could become the busiest online buying season in history, Web retailers are offering shoppers speedy shipping, one-day upgrades and even promises to deliver last-minute orders by Christmas Day.

The offers are great sales boosters, logistical horror shows for shipping crews and, increasingly, a way of life for modern gift-givers. But are the offers of super-fast fulfillment also leading shoppers to expect the impossible? In other words: What, exactly, does the promise of instant gratification do to our brains?

That shoppers can expect such quick turnarounds is a result of retailers promising ever-faster delivery speeds. Toys R Us and dozens of other online retailers last year offered Christmas Day delivery for packages ordered as late as 11 p.m. on Dec. 23. This year, even more stores are saying they’ll ship as fast as humanly possible. In a survey of more than 100 online retailers by consulting firm Kurt Salmon, 26 percent said they planned to guarantee Christmas deliveries for packages ordered one to three days before the holiday, up from 17 percent last year.

Macy’s, Target and others are offering overnight, same-day and otherwise rapid delivery options through the holidays, and companies such as Best Buy and Wal-Mart are shipping directly from their stores, because they’re often closer than their warehouses to peoples’ homes. Amazon.com has gone the whatever-works route, with plans to speed packages along via taxis and bike messengers.

“The next generation wants it now,” Best Buy chief executive Hubert Joly told the Star Tribune. “Even from an Internet player, two-day delivery is not now. Now is now.”

There are a few psychological cues that explain why we’ve become so demanding, including one that shopping-psychology researchers call the “endowment effect.” Studies suggest that once we buy something, we start to feel a keen sense of ownership, and we find ourselves giving extra value to it and visualizing all the ways it will make our life easier and more enjoyable.

For brick-and-mortar buys, gratification is instant. But for online purchases, there is a gray length of doubt and desire, and that can lead us into behavior that doesn’t make much sense.

“Even if you’ve waited six months to decide on a smartphone to buy, when you buy it, you still might want next-day shipping and pay $35 extra,” said Narayan Janakiraman, an assistant marketing professor at the University of Texas at Arlington. “Once you know you’ve made the decision, that changes the game. You start liking the product more, you start wanting the product more. . . . Not having it seems like a loss.”

It’s more than just our impatience that dictates the speed with which we want a consumer good to appear. The most popular breed of fast shipping — the $99-a-year two-day shipping of Amazon Prime — tapped into what author Brad Stone, in his biography of chief executive Jeffrey Bezos, “The Everything Store,” called the “faintly irrational human impulse to maximize the benefits of a membership club one has already joined.” Bezos also owns The Washington Post.

But wanting lightning-speed delivery, or waiting to buy, are not always irrational demands. During the holidays, there are some good reasons to wait. Last year, retailers offered some of their best deals late, and in some cases making the weekend before Christmas a better bargain than Black Friday.

“If I know the longer I can wait, the more deals I’ll see, an increasing amount of my shopping list is up for grabs,” said Gregory Grudzinski, director of analytics for Catapult eCommerce, a consulting firm. “I’m going to see how late I can go . . . and people are getting the idea that, ‘Hey, I can push my luck.’ “

An avalanche of last-minute shoppers last year, combined with especially brutal winter weather, overwhelmed FedEx and UPS and caused millions of packages to miss their delivery dates. But retailers this year are doubling down on faster, later shipping. Retailers that last year took eight days on average to whisk an order from warehouse to doorstep are now trying to make the process two days faster, a Kurt Salmon report found.

But that strategy could potentially backfire. For the retailers who offered Christmas Day deliveries last year on orders as late as Dec. 23, the success was startlingly low: Only two out of three packages made it home on time, angering many shoppers.

Some retailers are trying to juice shoppers while also subtly managing expectations. On certain Amazon orders, the company includes the soft image of a snowflake and a preemptive salve, “This shipment may arrive after Christmas.” But once fast shipping is presented, analysts said, retailers see it as competitive suicide to back away from what shoppers said they wanted.

“It’s only a matter of time before they’re offering same-day delivery on Christmas Day,” Grudzinski said. “Once that expectation rises to a certain level, it’s really hard to tamp it back down.”

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Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

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