Consumers’ Delivery Expectations Have Changed Thanks to Amazon

Nearly 90 percent of respondents in a recent Total Retail and IBM survey said they “strongly" or “somewhat" agree that Amazon.com has changed consumers’ expectations for order delivery (see the chart below). The report, The Amazon Effect: How Retailers Are Adapting Their Businesses to Better Compete With the Industry Leader, analyzes the impact Amazon’s growing influence is having on the retail industry, and what retailers are doing about it as a result, from increasing spending on technology to implementing some of Amazon’s digital innovations on their own websites.

Amazon certainly has raised the bar when it comes to package delivery and order fulfillment. The online retail giant, for example, offers free two-day shipping to its Prime members, and no minimum order is required. What’s more, for all Amazon orders that cost more than $25, all shoppers — Prime member or not — get free shipping. Consequently, Amazon has conditioned consumers to expect expedited, free delivery all the time, no matter which retailer they're purchasing from. It’s no surprise, then, that other big-box stores, including Wal-Mart and Target, have started to offer similar free shipping promotions.

Furthermore, speed of delivery is another area in which online retailers are trying to compete with Amazon's two-day-or-less guarantee (for Prime members). Just this week, Office Depot announced it was launching a same-day shipping option in three markets. Consumers are more impatient than ever when it comes to online deliveries, and retailers are being forced to adjust their supply chains to enable faster delivery of online orders.

We’ll continue with our coverage of The Amazon Effect report in Thursday's issue of Total Retail Report, looking specifically at how retailers view free shipping's impact on consumers’ purchase decisions. In the meantime, make sure to download the full report here.