"It is sort of a 'no duh' conclusion," says Tom Caporaso, CEO of e-commerce solutions provider Clarus Commerce. "But the implication is that the consumers are screaming for it, and the retailers are having to figure out how to afford it."
Consumers are indeed becoming more vocal about the must-have of free shipping: 88 percent of the 1,400 people Walker Sands surveyed said free shipping would make them shop more online.
Amazon boxes
Customers of Amazon and other online retailers are becoming more vocal about the must-have of free shipping. Photo: REUTERS/MIKE SEGAR
The free shipping on the fly new kicks you ordered from, say, Zappos.com isn't actually free — it's just that the consumer isn't paying for it. The problem, Caporaso says, is that shipping actually used to be a way for e-retailers to make money. They'd charge the consumer $7 for something that only cost $5 to ship and pocket the difference. No longer.
“No duh” observations aside, the customer’s sensitivity to how much it costs them to get their goods means stores, both physical and internet-based, are having to reallocate resources. "Retailers are starting to make their bets," Caporaso says.
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E-giants like Amazon are pouring resources into one-hour delivery and drone delivery.
For other giant corporations like CVS, the next step might just be simple delivery. Online stores like Jet.com are already filling the void stores like CVS and Walgreen's have left by not offering shipping of some kind. The hurdles for these giants are implementing the software needed to take in and process orders, and acquiring the fleet of vehicles (or bicycles), not to mention the workers who operate them. On the plus side, says Caporaso, they have what Amazon doesn't: a physical retail footprint.
The possible proliferation of drone delivery and one-hour shipping are more dependent on consumer demand. While 40 percent of people in the Walker Sands survey said they expect their packages to be delivered via drone within the next two years, a lot of trial and error remains. "You're going to see a tremendous amount of change in the next 12 to 24 months," Caporaso says.
The future isn't necessarily for everyone, however. "If you're an apparel retailer, do you really need one-hour shipping?" Caporaso asks, somewhat rhetorically.