How Fast Shipping Programs Help You Avoid a Price Race to the Bottom
Fast shipping programs have been popping up across marketplaces, from Amazon Prime, to Walmart Free 2-Day Shipping, to eBay Guaranteed Delivery, and many more to come. There’s a reason for this sudden proliferation of fast shipping tags.
In fact, 80% of consumers want same day shipping, and “half of shoppers are willing to pay a premium for faster shipping due to time-sensitive personal reasons.”
Ensuring quick delivery at affordable (ideally free) prices
- Increases your listings’ visibility and eliminates competition
- Gets you more conversions to boost sales
- Encourages buyers to spend more
- Eliminates fear of an item not arriving on time
In this article, we will show you how fast shipping programs can help you avoid price wars in particular, by explaining how they work to keep your listings on top.
Case study: Moving from a focus on price to customer experience
“A little cost is worth a lot of convenience.” – Torley Wong
We’ve seen marketplaces continually shift from a focus on price to a focus on customer experience. What contributes to experience? Fast shipping, reliable delivery, and easy package tracking.
Let’s take a look at how the Amazon marketplace evolved to reflect the importance of fast shipping.
When Amazon first started out, their homepage showed a focus on deals and top sellers to get a purchase. The image below is from November 2001, courtesy of the Wayback Machine.
A few years later in 2004, we get the first hints that Amazon was seeing the value in offering fast and free shipping. The Amazon homepage screenshot below is from June 2004, and highlights free shipping twice on the front page.
Finally, Amazon changed the game when they announced Prime in 2005, although they wouldn’t put all their efforts into the program until a few years later.
Today, Amazon is all about Prime, with a “Try Prime” link right under their logo, and easy ways for buyers to filter by Prime.
If you take a look at the reviews of this one Amazon seller, the majority of buyers note shipping speed. It’s a great asset if you have it, and your potential downfall if you don’t.
As Amazon’s evolution shows us, there is huge merit to focusing on customer experience instead of price. They have the benefit of years of experience to watch how consumers react to different marketplace offers.
Fast shipping programs today
“Fewer than 20% of consumers say they always buy the cheapest item…Everyone else is looking for better customer service, overall experience, and perks like free and faster shipping.” – Rebecca Borison
Although Amazon is arguably the dominant eCommerce marketplace today, there are many other strong marketplaces that are highlighting fast shipping and focusing on buyer experience.
- eBay Guaranteed Delivery– eBay’s fast shipping program ensures delivery within 2, 3, or 4 days, and shoppers can filter based on their preference.
- Walmart Free 2-Day Shipping – Walmart has begun offering all shoppers free 2-day shipping on qualifying items, with no minimum purchase necessary.
The fact that those marketplaces are investing in and focusing on fast shipping tags should be an indicator that it’s a better business move for eCommerce overall. But the even better news is that it helps sellers compete without having to drop prices and hurt their margins.
Here are 3 ways fast shipping tags help you avoid price wars.
1. Your buyers are willing to pay for it
“75% of the retailer respondents said their customers wouldn’t pay more for faster shipping, but 75% of consumer respondents said they would.” – Kate Patrick
If Amazon, eBay, and Walmart’s lean toward fast shipping isn’t enough to convince you that it’s important, then look to your buyers. Shoppers are willing to pay more for fast shipping, and we’ve even seen a Deliverr seller win the buy box on Walmart after enabling 2-day shipping, despite another listing with a better price.
2. They help you appear above your competition
Buyers can now filter for fast shipping across all the popular marketplaces, which is vital when platforms like eBay now collapse similar items into one listing (effectively hiding sellers who don’t win that buy box).
We can see the search results greatly reduced when shoppers choose to filter for fast shipping programs, and marketplaces are continuously highlighting their fast shipping programs across their websites.
After running a test in the Walmart.com marketplace, turning on the 2-day shipping filter eliminated 98% of the competition for a “Lenovo laptop” search.
Furthermore, when we examined the Walmart website redesign, we found that search results tended to favor items with fast shipping, even without the filter turned on.
3. They boost conversions
“When it comes to the importance of same-day delivery by generation, there is a clear decrease in importance as shoppers get older; nearly a third (30%) of Millennials find same-day shipping important, while only 5% of Seniors do.” – Hayley Silver
The bottom line is fast shipping tags get sales, and that’s only going to increase as the younger generations who have grown up alongside the Internet enter the job market and become consumers.
That’s why we recommend acting early and getting those fast shipping tags, because they will end up boosting your business to another level.