Industry Report: Evolving Expectations 2024

Here’s a snapshot of what you’ll find in this report:

Delivery speed is high on the priority list for shoppers, driving retailers to optimise their logistics processes for more efficiency, and meet the needs of their customers. 46% of respondents in a UPS Pulse survey abandoned their shopping cart online because of shipping times that were too long or not provided at all.

Leading retailers in our survey reinforced this trend, with 46.5% agreeing that advanced tracking and communication will have the biggest impact on their customer experience in the next 12 months.

Giving customers what they want when it comes to delivery options means providing them with a range of options at the checkout. To meet this demand for choice and convenience, businesses need to consider their courier mix. Retailers are utilising multi-courier strategies to increase flexibility and improve delivery reliability for their customers.

However, this need for speed also comes with more responsibility – particularly when it comes to environmental sustainability. Additionally, the adoption of localised fulfilment methods like ship from store is also helping retailers to optimise their inventory management and expedite delivery.

We’ll also look at the opportunities and challenges of tapping into new markets with international shipping. Managing returns efficiently is another crucial consideration, with 30.9% of leading retailers planning to implement returns automation in the next 12 months. Lastly, we look at the post-purchase experience with key insights from experts at Klaviyo.

As businesses navigate these trends, those that prioritise agility, sustainability, and customer-centricity will emerge as leaders in the evolving shipping and fulfilment landscape of 2024.

While these service offerings can be a challenge for some retailers, there’s been a huge shift towards meeting customer demands, with more businesses leveraging technology and automation to optimise last-mile deliveries. This allows them to offer more personalised and flexible services, while at the same time enhancing delivery speeds for their customers.

What’s the rush?

Faster delivery has moved from a 'nice-to-have' to a 'must-have' and these key drivers help shed some light on why consumer behaviour is changing:

Instant gratification culture – in our digital age, the desire for immediate satisfaction is stronger than ever.

The Amazon effect – there's no denying the impact of giants like Amazon, Temu and Walmart on evolving customer expectations.

Competitive advantage – as eCommerce becomes increasingly crowded, offering quick delivery is a powerful way to stand out.

Technological advancements – innovations in logistics and supply chain technology have made it possible to streamline operations like never before.

As the data shows, shoppers are looking for a tailored and hassle-free buying experience, where convenience is high on the priority list. It's all about fitting into the customer's busy life, not the other way around. Retailers who aren’t giving shoppers the power to choose could quickly end up missing out on valuable sales.

What leading retailers are saying

• 87.2% of our survey respondents agreed that offering delivery choice at checkout is important for increasing checkout conversions.
• Free shipping, express, buy online, pick up in store, and overnight delivery ranked as the top delivery options.

Relying on one courier service might simplify things, but it doesn’t leave much room for error if that service is temporarily down – or any flexibility to scale your operation during peak times of the year.

Utilising multiple courier services allows retailers to not only offer their customers more options, but also creates a more resilient operation with the ability to move proactively. Not to mention, by using multiple couriers, you’re also able to select the cheapest courier based on the order details.

What leading retailers are saying

• 65% of respondents who use a multi-courier strategy say their main reason is to access a wider array of delivery options and services.

What does the data say?

Rendr’s data also shows the implications of integrating on-demand delivery services alongside a multi-courier strategy, and the impact it has on customer satisfaction, operational efficiency and competitive advantage:

By offering dependable delivery choices, customers are willing to buy more and spend more with the added certainty of knowing that their order will arrive in a timely manner.

Operationally, on-demand delivery is a more scalable and streamlined solution for store networks, allowing retailers to get closer to their customers and provide them with a more customer-centric offering.

The competitive advantage of offering on-demand delivery lies in the ability to meet evolving expectations in a market where adaptability is paramount.

Is ship from store fulfilment the right solution?

There are several benefits that can come from using stores as fulfilment centres, but of course there are also challenges. Retailers should consider both sides of the coin to get the most out of a ship from store strategy.

Inventory accuracy – according to research by McKinsey, inventory accuracy can be challenging to track compared to distribution centres. Tip: using an inventory management system will help maximise inventory accuracy with more visibility.

Demand forecasting – with inventory in warehouses as well as stores and other distribution centres, understanding how to maximise inventory placement can be one of the biggest challenges.

Executing a seamless operation – when it comes to the space, staff, and technology, stores aren’t usually equipped to handle fulfilment at scale.

Post-pandemic resilience and recovery

The pandemic significantly impacted global shipping, causing disruptions ranging from port closures to labour shortages, which led to reduced schedule reliability and increased freight rates.

These challenges not only affected global trade, but customers saw the price hit too, especially in smaller, more isolated areas.

The good news is, by mid-2022, the industry saw improvements in reliability and lowering freight rates, aligning closer to pre-pandemic levels, despite the container shipping sector experiencing record profits that year.

An effective returns strategy not only ensures a positive and well-rounded shopping experience but also reinforces consumer trust, ultimately contributing to the long-term success of your business. Retailers are beginning to leverage advanced analytics to get more visibility and streamline this crucial part of the process.

From the need for delivery speed to the importance of offering choice at checkout, businesses are increasingly focused on enhancing the customer experience and meeting evolving expectations for convenience and efficiency. The adoption of multi-courier strategies and the integration of sustainable shipping practices highlight the industry's commitment to operational excellence and environmental responsibility.

The rise of ship from store models and the expansion of international shipping capabilities highlights the importance of agility and adaptability. Additionally, the management of returns and the optimisation of post-purchase experiences are key ingredients of a well-rounded approach to customer needs.

As businesses navigate these trends, it’s clear that those who prioritise innovation, sustainability, and customer-centricity will be geared up to thrive in the years ahead.

Following the evolution of the shipping landscape – by leveraging technology, embracing strategic partnerships, and keeping an ear to the ground for evolving customer expectations – retailers can stand out in a crowded marketplace and drive long-term success.