Introduced in 2005, Amazon Prime 2-Day Shipping offered unlimited 2-day delivery for millions of products to their Prime subscribers. Since then, consumer demand for fast shipping – specifically – free, expedited shipping has grown exponentially.
2-day shipping technically means the 2-day time frame between order placement and delivery date, or when consumers receive their orders within two days of purchase – essentially. But this may not always be the 2-day time frame consumers expect. 2-day shipping services vary by carrier and also by the time an order is received. Some carriers count the 2-day shipping as two business days, while other carriers, like UPS, may include non-business days such as Saturday.
Consumers Willingness to Wait For Deliveries in Days
Source: Alix Partners
The other factor, when an order is placed, is extremely important when calculating a 2-3 day delivery time. If a consumer places an order at 10 PM, the two-day time frame does not normally start until the order is picked and packed, which, in the case of a 10 PM order, won’t be until the next business day.
So, 2-day shipping can end up being three days from when the order is placed.
Amazon Prime changed the way consumers shop. And with Amazon’s Primes growth, eCommerce sales grew as well.
Amazon Prime Membership & Worldwide eCommerce Growth
Sources: Statista and Alix Partners
With the explosion of online shopping, consumer habits have evolved. Consumers expect fast and free shipping, with a whopping 62% of shoppers expecting orders to arrive in 3 business days or less with the expectation of free shipping!
Furthermore, according to the 2022 RetailDive consumer study, only about 20% of fashion and apparel retailers are offering 2-day free shipping.
Unsurprisingly, many consumers turn to Amazon when doing product searches. A staggering 50% of all consumers start their product searches on Amazon. 45% of consumers start research on Google, YouTube even comes in at 30% while only 24% go directly to a brand or retailer’s website.
Brands and retailers have a lot of competition. They need to be able to compete with Amazon’s Prime Delivery speed, Google’s, and YouTube’s organic rankings, and compete in paid search marketing efforts.
A good start would be to offer free 2-3 day delivery.
Offering free 2-3 day shipping continues to be an “Amazon-thing”. This is one area where brands could differentiate themselves from the competition and gain more market share. The vast majority of brands only offer free shipping at the 5-8 day delivery. By offering two or three day – fast and free – shipping, brands can provide what customers are expecting.
Customer Expectations for Free Shipping Time-in-Transit vs Actual Retailer Published Time-in-Transit
AMS Fulfillment works with all major carriers like UPS, FedEx, USPS, and DHL, and regional carriers like OnTrack. And using rate shopping software, AMS provides our clients with the low rates brands and retailers need and the fast delivery options consumers demand.
eCommerce stores are once again competing with brick-and-mortar stores. And it is hard for eCommerce stores to compete with them, after all, customers come home with their packages that day.
How can an eCommerce company compete with brick-and-mortar stores? The answer is by offering fast shipping.
eCommerce consumers want fast shipping. 63% of customers say that delivery speed is a deciding factor on whether to purchase a product or abandon a cart. And Amazon has again been the driving force of expedited shipping:
Amazon Prime members overwhelmingly opt for faster shipping, with 2-day shipping being the most popular delivery option.
eCommerce brands and retailers do not have an easy job. Not only are they competing with consumer expectations set by Amazon, but they are also dealing with the increase in brick-and-mortar shopping habits.
Consumer satisfaction is integral to a brand or retailer’s success. 54% of consumers will simply walk away from a brand after just one bad experience – and customer retention is a huge component of a brand’s success. What’s worse, these dissatisfied customers have no qualms about taking their experience to social media and review sites and posting negative reviews. A single negative review can greatly reduce a brand’s pool of new customers.
While there are many ways to have eCommerce shoppers come back to their carts, such as offering additional coupons or incentives, it just doesn’t happen frequently.
One of the top reasons carts are abandoned is shipping costs, followed by slow delivery. According to Baymard Research, 48% of eCommerce shoppers abandon a cart because of unexpected shipping costs and fees while 22% state that delivery was too slow.
The solution to reducing cart abandonment sounds extremely simple: Free 2-3 Day Shipping!
The caveat is – offering this delivery option can be expensive.
Partnering with a reputable 3PL like AMS Fulfillment can help you provide this highly demanded-shipping option at a reasonable price!
AMS Fulfillment ships hundreds of thousands of packages a month. Due to our shipping volume, we can negotiate lower shipping rates, which we pass on to our clients. With reduced shipping rates, free fast shipping is within reach for many brands and retailers.
Another option to break even a free 2-3 day shipping service is to require a minimum order value. This is a tactic that even Amazon offers to non-Prime members. To qualify for free 2-day shipping, Amazon requires a $25 minimum order value.
This is a great strategy for two reasons: Fast, free shipping, and larger transaction value. People will spend more to receive free 2-day shipping.
A brand can offer 2-day delivery and have happy customers – but is that all it takes?
The answer is No. Brands need to ensure that customers are always informed about their orders. In this aspect, over-communication is ideal. Updating customers on when their order has been shipped and providing tracking information for their 2-day delivery goes a long way to ensure customer satisfaction.
In fact, according to Rakuten Insights, the most important factors to customers post-purchase are estimated delivery date (EDD) notifications, proactive customer support, and delivery speed.
Not only is EDD a customer expectation, but it also reduces cart abandonment. 59% of customers ensure they receive estimated two-day delivery notifications before completing their purchase.
When selecting your order fulfillment, it is mandatory to ensure that package tracking is available and accurate. With AMS Fulfillment, brands are gaining a partner with the experience and technology that ensures fast and accurate fulfillment, and the important tracking that can provide the important shipping updates customers are expecting.
Now that you know 2-3 day shipping is necessary but only 20% of brands are offering this delivery option, it’s time for you to offer it!
Outsourcing order fulfillment is one of the best options to be able to successfully offer two-three day shipping.
By outsourcing to a 3PL like AMS Fulfillment, a brand not only has lower shipping rates but has access to a variety of shipping options. Using rate shopping software, AMS scrapes carrier sites to find the best rates with the fastest delivery times.
By utilizing ground, air, or regional carriers, AMS will be able to deliver your packages at the lowest rates possible.
And the location is a huge factor in 2-day delivery. Let’s say your customer is located in Chicago, Illinois. They want 2-day delivery via UPS. Chicago is a major city and nearly half the United States is within the UPS 2-day shipping zones.
But what if the customer is located in Cheyenne, Wyoming? That map changes significantly.
But it isn’t just about rates, it’s about speed too – and not just shipping speed. By outsourcing to a 3PL, brands can leverage experienced personnel and automation that they would not necessarily have the means to implement.
When selecting a 3PL, comparing automation, shipping rates, and locations should be top considerations.
AMS Fulfillment is bi-coastal, with facilities on the East and West Coasts totaling over 1 million square feet, quick access to ports, and major carrier hubs.
Utilizing a bi-coastal 3PL can significantly reduce 2-day shipping costs. A small box shipping from Los Angeles, CA to New York, NY can have rates as high as $85, while the same package coming from Newark, NJ would be around $35. That is a whopping $50 savings on 2-3 day shipping rates!
While that is an extreme case, the same package shipped to Austin, TX would run about $75 from New York and $72 from Los Angeles.
If a brand is shipping 1,000 packages a week from Los Angeles, CA, and using a bi-coastal fulfillment partner like AMS, they can expect to save an incredible amount on 2-3 day shipping costs.
The realized savings can be reinvested into research and development, marketing, production, or any other strategy to grow a brand – all while ensuring customer satisfaction.
Leveraging a 3PL’s bi-coastal solution can allow brands the resources to offer free 2-3 day shipping.
Consumers are accustomed to fast delivery service. In 2021, Amazon Prime shoppers placed multiple orders within a month, spending up to $100 per month.
The number of packages shipping in 2021 is staggering:
| Carrier | # Of Packages Shipped in billions |
|---|---|
| Amazon | 7.7 |
| USPS | 6.9 |
| UPS | 5.3 |
| FedEx | 4.2 |
| TOTAL | 24.1 |
When you consider that the average semi-truck emits over 161.8 grams of CO2 per ton-mile, the impact of 2-3 day shipping is a contributor to global warming.
Eco-friendly brands have a difficult time balancing consumer satisfaction and sustainability.
While electric trucks are in development, they have a long way to go before hitting the roads. The first step is to build the necessary infrastructure to support the electric trucks.
While automobile manufacturers and carriers work to develop sustainable electric trucks, there are other ways to reduce the carbon footprint from fast shipping:
AMS Fulfillment is a Certified B Corporation. We know that sustainability starts with us. Our company’s mission is simple – “do good”. And we know that includes advocating for the driving force – our planet!
Every facility implements sustainable practices in every step of the process – from utilizing technology, packaging, and procedures that reduce our carbon footprint to the simple act of recycling packaging. AMS cares about sustainability and we walk the talk.
In 2023, we are scheduled to become 100% carbon neutral.
It is official – 2-day shipping is what consumers demand and brands seldom provide.
Brands need to provide free 2-day shipping to compete with behemoths like Amazon and Walmart. To offset the high costs of 2-day delivery, brands have a few options:
With AMS Fulfillment, brands get all of the above and more. As a true partner, AMS is a full-service 3PL that can also provide back-office support to help you scale your business. To learn more about how our 2-3 day shipping services can boost your business, Contact Us today!
