Ultra-fast delivery: Worth the hype?

We test how offering next-day delivery at checkout affects cart abandonment and adoption of other ship methods.

In the last few years, the market has seen a proliferation of omnichannel retailers like Walmart, Target, Home Depot and Lowes increasingly fulfilling online orders from their brick-and-mortar stores using gig-powered services like Instacart or Walmart’s GoLocal to enable same-day or next-day delivery.

Recently, one of our clients asked us for help gauging whether adding local next-day delivery to their online checkout options would yield higher conversion than only offering standard shipping and store pickup. Consumer behavior at checkout depends on many factors, so we ran surveys testing the following:

  • Context of purchase: Whether the order is time-sensitive (aka “appointment shopping”) or a casual purchase
  • Distance from store: Whether the consumer would need to travel 15 minutes, 30 minutes, or an hour for store pickup
  • Price: Free vs. $7 next-day delivery (set based on market analysis of local delivery fees)
  • Product type: Apparel/footwear vs. sporting goods

Appointment shopping

Key takeaways :

  • Distance from store is a critical factor. Consumers living an hour away have significantly different mindsets than those living within 15-30 minutes—the clear majority of whom will select store pickup, unless next-day delivery is free.
  • Introducing a $7 next-day option primarily cannibalizes standard delivery customers and a nominal percentage of abandoned carts.
  • Introducing a free next-day option reduces cart abandonment, but also (and more significantly) cannibalizes customers who would have otherwise opted for store pickup.
  • Free next-day delivery reduces the most abandonment among those living an hour away—provided the service is available to them.

Casual shopping

Key takeaways:

  • Cart abandonment trends significantly lower among those with non-time-sensitive needs versus appointment-shoppers—across all scenarios.
  • Introducing any next-day option (paid or free) has a negligible impact on cart abandonment, and instead primarily draws customers away from standard delivery.
  • Cart abandonment is only nominally lower when next-day is offered to non-urgent shoppers—interestingly, there is minimal difference between paid & free next-day.
  • Unlike with appointment-shoppers, casual shoppers opting for store pickup are unlikely to be swayed by next-day options (free or paid)

For retailers considering implementing local delivery, we recommend completing an analysis of where your existing customers are in relation to your stores (using zip codes of customers who have placed orders), as well as the maximum distance delivery drivers will travel, to guide the best decision for your business. While consumer surveys are valuable for directionally predicting consumer behavior, we also recommend running thorough A/B testing on your own website to more precisely gauge the impact of offering local delivery.

BOXpollTM by Pitney Bowes, a weekly consumer survey on current events, culture, and ecommerce logistics. Conducted by Pitney Bowes with Morning Consult // 2200 US consumers surveyed October 2023. © Copyright Pitney Bowes Inc.