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Delivery dilemma: Customers want more, many won’t pay

Adam Zuchetti
Adam Zuchetti
12 February 2019 2 minute readShare
Parcel delivery

Customers are crying out for greater convenience when it comes to deliveries, including weekend drop-offs, but businesses are being squeezed between satisfying customers and balancing the cost.

CouriersPlease commissioned a survey of 1,021 Australians to gauge demand for deliveries outside of standard office hours.

It found that four in five want an after-hours option when it comes to deliveries, including weekends as well as evenings. All age groups desired greater convenience around deliveries, although it was a much greater factor among younger people.

That is unsurprising, given the increasing risk of mail theft and the fact that many people are not at home to receive goods during the week.

Reflecting that was the finding that convenience trumps speed when it comes to deliveries: 55 per cent of respondents said that having certainty that a parcel would arrive at a time of their choosing is important to them. Less than half (45 per cent) said that speed of delivery is important.

However, almost half (47 per cent) are unwilling to pay extra for the convenience. With many businesses facing higher labour costs after hours — particularly on weekends — it creates a real dilemma: give the customer what they want and absorb the higher cost, or charge the customer for the convenience and risk losing the sale altogether.

Not all consumers feel this way, however, with many willing to pay extra for the convenience — some quite a substantial amount extra.

The survey found that more than one in four (28 per cent) would pay up to $5 extra to have goods delivered on weekends or in the evening.

Some 18 per cent would be willing to pay between $5 and $10, and 4 per cent would fork out between $10 and $15.

A further 1 per cent each nominated paying $15 to $20, $20 to $25 or more than $25.

Interestingly, younger people are much more willing to pay extra for premium delivery options, including same-day and after hours. Of the respondents aged 19 to 29 years, 91 per cent wanted such options when buying goods, and three-quarters were happy to pay for it.

According to CouriersPlease spokesperson Jessica Ip, on-demand technologies in ridesharing and movies are contributing to consumers wanting more control over when they access goods and services.

“With the rise of on-demand providers such as Uber, Deliveroo and Netflix, Aussies have grown accustomed to having products and services at the ready — at a time convenient for them. It has become the norm to expect fast turnaround, with the demand also expanding to the e-commerce industry and parcel deliveries,” she said.

“Consumers are looking for ways to make their lives easier by having flexibility to receive their parcels in [the] time frame they want.”

A separate study last year by Zoom2U found that many consumers are put off by the high cost of deliveries, suggesting that they can wipe out discounts or the value of lower prices between one business and another.

Some even complained that for big-ticket items, delivery fees can be more than the cost of the item itself, making it “uneconomical to purchase these items”.

Delivery dilemma: Customers want more, many won’t pay
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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