Slow delivery, high shipping costs turn off mobile shoppers

Internet Retailing

16th May 2017

Slow delivery and high shipping costs are hampering retailers’ ability to convert Australians on mobile, new research shows.

In a study conducted by PayPal Australia of about 1,000 smartphone users and 219 businesses, 57 per cent said they would be deterred from making a purchase if the shipping takes too long, with 42 per cent saying slow shipping negates the convenience of online shopping.

Despite the fact that Australia has one of the highest levels of mobile penetration globally (71 per cent of Aussie shoppers buy on their mobile devices), retailers are leaving mobile purchases on the table due to unsatisfactory shipping experiences.

While 63 per cent of consumer survey respondents said they would definitely buy an item in their online shopping cart with next-day delivery (only 28 per cent said the same for 4-7-day delivery), 54 per cent of business respondents had no plans or didn’t intend to offer next-day delivery.

Currently, only a third of the businesses that participated in the survey offer next-day delivery, with 13 per cent planning to do so within the next five years.

Managing director of PayPal Libby Roy emphasised the danger of ignoring customers’ shipping expectations.

“With two online shopping giants, Alibaba and Amazon, poised to enter the Australian market, local consumers will have greater choice and online retail will be more competitive,” she said.

“To compete effectively, Australian businesses need to think beyond ‘units sold’ and understand their customer’s full engagement lifecycle including shipping, returns and other value-added benefits.”

Alternatively, businesses that get their shipping offer right could gain loyal customers, Roy said.

“With almost half of mobile shoppers (47 per cent) saying they’d return to a merchant who offered next day delivery, there’s a real opportunity for Australian retailers who get their shipping speed and price right.

“Australian retailers are operating in a global market where free and fast shipping is now a consumer expectation. The online shopping experience doesn’t end at the checkout– product delivery is a core part of the end-to-end experience,” she said.

Showpo founder and CEO Jane Lu agreed that meeting consumers’ expectations is critical to growth.

“We know that our customers expect to receive their products quickly – fast shipping, along with a great mobile experience is how we stay ahead,” she said.

“We know that we’re not just competing with Australian retailers, the world of online shopping has made every global retailer our competitor.”

The survey also reveals that consumers’ shipping expectations depend on the product they’re buying.

Nearly one-third of respondents ranked groceries and food and drink as the two most important categories for next-day delivery.

Tickets to music, movies and arts and clothing and accessories tied for third place, both prioritised by a 9 per cent of respondents.

In comparison, there are some things customers are prepared to wait for, with sporting goods and toys and games ranked as the least important for next-day delivery.