Despite many retailers’ recent push to offer same-day shipping as a competitive differentiator, research shows there are other factors that US consumers hold high—sustainable transportation being one of them. But most consumers don’t even know that such options often exist.
Google, Amazon, eBay and Target have been pushing to expand their same-day delivery services in order to seize a competitive advantage. For example, The Wall Street Journal (Amazon, in Threat to UPS, Tries Its Own Deliveries, April 24, 2014) recently described Amazon’s most recent same-day delivery offering as an effort to get closer to the “holy grail of e-commerce.”
Same-day delivery sounds like a great goal, particularly for a market increasingly used to immediate gratification. But is it so attractive that most consumers are willing to pay for it? Recent West Monroe Partners research suggests they may be swayed by other factors such as sustainable transportation. The study, “The Need for Green or the Need for Speed,” revealed that a sustainable transportation model ranks relatively high on online consumers’ agendas, and many consumers are willing to concede speed and would be willing to pay a premium to make home delivery “greener.” The survey covered more than 600 consumers across the United States and Canada to understand the compromises they are willing to make for more sustainable delivery of products purchased online.
More than half of US consumers surveyed—54 percent—said they would pay at least five percent more for products ordered online if they include sustainable transportation. Twelve percent said they were willing to spend up to 10 percent more for sustainable delivery.
Even more—76 percent—said they are willing to wait at least one extra day for climate friendly transport such as alternative delivery windows. In fact, responses suggest consumers are much more likely to wait longer for sustainable delivery than they are to pay for it.
Pay particular attention to the younger generation
Even more intriguing is who is most likely to consider sacrificing for sustainable delivery. The study found that younger consumers in the 18-25 age group are most willing to sacrifice some delivery speed. More than 82 percent of respondents aged 18-25 said they would be willing to accept some length of delay for a more climate-friendly transport—much higher than for all other age groups.
This is a good reminder that companies must consider the opinions and preferences of younger generations as they shape their future supply chain and deliver services. For one thing, younger generations will be consumers over a longer time horizon. In addition, they are more active in voicing their views on social media and other channels, and they are, of course, tomorrow’s business leaders and decision makers.