an update on the shipping and handling wars

As consumers, we have front row seats to one of the most interesting, and strategically important battles being fought every day amongst the titans of e-commerce. This particular battle is most similar to the trench warfare of the First World War, where enormous costs were incurred in a long battle of attrition that left even the victors battered and weary.  We are, of course, referring to the current state of shipping and handling in the US e-commerce market, where billions are spent every year to satisfy the growing expectations of online shoppers that want their stuff now, and they want it shipped for free.

It is easy enough for retailers to read their competitors’ shipping and handling policies and prices, but it is much harder to see the bigger picture, and to assess the impact of these choices on the broader battle for market share and profits.

Fortunately, we’ve got the benefit of broader perspective at Slice, where we use our panel of over 4 million people to see online trends and to find the lessons behind every story. So we took a look at our data from January 2014 through April 2016 to see what trends were evident.  Here are a few of the things that we learned.  

  • Across an index of 238 merchants, we found that shipping speed has gotten far faster over the past 2 years.  In April of 2014, the average package took 6.3 calendar days to reach the consumer’s doorstep after ordering.  By April of 2016, that had been cut by 46 percent, to 3.4 days.   

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  • The bulk of that time trimming has come from duration between when it leaves the retailer’s warehouse to delivery on the customer’s doorstep, which has improved by 60 percent.  The duration from customer order to handoff to a third party shipper has declined by only 9 percent over that same timeframe.

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  • Important, but less surprising, is the fact that shipping fees have declined.  In April of 2014, 60 percent of orders had free shipping and handling.  By April 2016 63 percent had free shipping.

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If you’re at Internet Retailer Conference and Expo on Wednesday, stop by and see my presentation, which promises many more insightful nuggets.   
The net of it all is that it’s a great time time to be an online shopper, and a tough time if  you’re an online retailer that hopes to show a profit.

about this data

With a panel of over 4 million online shoppers, Slice Intelligence gives the most detailed, and accurate digital commerce data available, and is reported daily.

Slice Intelligence is the only service to measure digital commerce directly from the consumer, across all retailers, at the item level, and over time. Our retailer-independent methodology precisely measures commerce as it happens. By extracting detailed information from hundreds of millions of aggregated and anonymized e-receipts, Slice can map the entire Purchase Graph, connecting each and every consumer to all their purchases.

Slice gets its data from e-receipts – not a browser, app or software installed by the end-user – so its measurement reflects comprehensive shopping behavior across multiple devices, over time which are key in an increasingly omnichannel retail world.

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