When we launched the results of our 10th Annual Home Delivery consumer survey earlier this year, I was tempted to dust off my archives and find the report from the first year we fielded this survey. It was the summer of 2012, NASA was just about to land Curiosity rover on Mars, and online shopping was clearly still a faraway concept for many consumers. Gotye was at the top of the charts with “Somebody That I Used to Know”, and that is also how I feel about the version of me who shopped for everyday things back then.
It’s been an interesting exercise to look back and compare how consumer expectations have completely transformed in a decade. The pandemic, of course, supercharged some of this growth – but it’s remarkable how easily humans take on new behaviors and what seemed perfectly normal just a few years ago becomes obsolete. The lesson here for businesses is that consumers will eventually move on if they don’t get what they want. Unfortunately, many leaders in the industry are still stuck in their ways and have not changed operations quickly enough to cater to consumer expectations. This can be a grave mistake at a time when consumer loyalty is hard to come by.
Below, I’ve highlighted five of the most remarkable differences between the results in 2012 and our results this year:
I can’t wait
Back in 2012, 74% of consumers were willing to wait between five days and a week for their package to arrive, with only 1 in 10 expecting under three days of delivery time. Delivery expectations are settling in at about half of that time for a majority of the consumers today: 60% of our surveyed consumers told us they expect to get their item purchased online to get delivered to their doorstep in under three days.
Just eat it
Food delivery has grown astronomically in popularity, and not many would argue against the fact that this is the category that has benefited most from consumer behavior changes forced upon by pandemic lockdowns. In 2012, one in five consumers said they had purchased groceries or frozen food for home delivery – in 2022, one in two had done so. In fact, food used to regularly feature on the top of the list in the least popular item to buy online. Other categories that have seen remarkable growth: pet supplies, home improvement, and furniture. In no surprise to anyone who was online in the early years of online shopping, categories that have most dropped off in popularity are books or other media and photographs.
Free shipping has always been impactful. This is the one consistent theme we have been seeing for 10 years now -- fewer than 10% of consumers every year have said the availability of free shipping does not impact their purchase decisions. This is a critical one for executives to pay attention to. When we asked executives this year, half of all who currently offer free shipping or returns were planning to start charging for these services. While this is an understandable response in the face of escalating omnichannel costs, companies may be better served looking for other levers to pull instead of risking putting consumers off their brand.
In 2012, we had predicted that there was an untapped market for online orders of large appliances, large electronics, and furniture – at that point 60% of our surveyed consumers had never purchased a large durable item (including furniture, appliances, TVs, outdoor power equipment) online. In our 2022 survey, the categories for which consumers are most willing to pay for same-day delivery are large appliances and heavy products.
There is clearly much room for improvement in both cutting costs and making the consumer experience better -- we’re still some ways from perfecting logistics. However, it would be remiss not to recognize that the industry has made big strides. In 2012, half of all consumers said the cost and difficulty of returning products was the top reason stopping them from buying online. The 300% growth in e-commerce over the last ten years would suggest barriers have come down significantly.
Suffice to say that the world of logistics looks very different now than it did back in 2012. Technology and operational diligence mean that companies have managed to meet many of the escalating consumer demands. However, there is much more work to be done. We believe that there are tremendous opportunities to both reducing the cost of delivering an item to a customer and doing it more efficiently and quickly in a way that improves the consumer experience.