When it comes to delivery times, U.S. retailers are playing a catch-up with leading online merchant Amazon.com Inc., which captured 33% of U.S. online retail sales in 2015, up from 25% in 2012. Top U.S. retailers are making strides, at least when it comes to shipping online orders, a new Internet Retailer study finds.
Amazon.com Inc. has speedy delivery down. For example, for certain products in a growing number of markets in the United States, Amazon offers free same-day (Prime Same-Day) or even two-hour delivery service (Prime Now) for Prime customers who pay a $99 annual fee for two-day shipping at no additional cost. Prime customers also receive such perks as streaming video and music. Amazon’s two-day delivery window sets a high bar in the minds of consumers, say retailers and experts, and it makes many online shoppers less patient with longer delivery times from other web merchants.
Internet Retailer’s newly released “Click, Ship & Return: Fulfillment Report” tracked shipping speed, order processing times and returns for 30 of the top online retailers in North America. The study shows that while leading retailers have a long way to go before catching up to Amazon’s delivery speed and capabilities, these 30 retailers have been steadily improving delivery times
How have they been able to increase delivery speed and by how much?
Several forces are accelerating delivery speed, retailers and analysts at e-commerce analytics company Slice Intelligence say. Retailers are building more distribution centers to fulfill online orders, and these facilities store merchandise close to many heavily populated areas to enable fast turnaround times. A growing number of store-based retailers, though still a minority, also use their bricks-and-mortar locations to deliver web orders more quickly and reduce the fees they pay shipping carriers.
The average delivery time for the 30 retailers in the Internet Retailer study was four days. That might seem like an eternity to Amazon Prime customers accustomed to delivery in a day or two, but for many e-retailers it’s a major improvement from just two years ago, according to Slice Intelligence. Slice tracked the delivery speed of 238 online retailers (excluding Amazon) from January 2014 through April 2016. In January 2014 the average delivery time for a standard online order in the U.S. by all retailers was 8.3 days. By April of this year, the average was 5.1 days.
Looking at the retailers with the highest package volume, Slice tracked their delivery activity over a two-year period from April 2014 through April 2016. Only the retailers covered in the Internet Retailer study are included in the table below.
Many of the largest online merchants, including Nordstrom Inc. (No. 18 in the Internet Retailer 2016 Top 500 Guide), Wal-Mart Stores Inc. (No. 4) and Newegg Inc. (No. 17), have shaved more than two days off of delivery times in two years.
J.C. Penney Co. Inc. (No. 33) improved the most, cutting delivery time to 5.1 days in April 2016 from 9.7 days in April 2014. Best Buy Co. Inc. (No. 12) cut its delivery time by 3.5 days, to 3.3 in April 2016 from 6.8 days in April 2014. Best Buy attributed its 24% web sales growth in Q2 2016 to improvements in its digital capabilities, including a more streamlined checkout process, improved search functionality, faster shipping times and live inventory visibility for stores near customers.