Expect a Sharp Increase in Same-Day Delivery This Holiday Season

Black Friday numbers are in, and 2017 – as expected – is turning out to be a record year. U.S. consumers spent $5 billion online in the 24 hours surrounding Black Friday, a 16.9 percent increase in dollars spent compared with last year, according to Adobe Digital Insights, which tracks spending at America’s 100 largest retail websites. A recent NRF study projects as much as $682 billion in total holiday sales, a 4 percent increase over 2016.  

There are a couple of reasons for the jump in spending. First, consumer confidence is up from last year, when 32 percent of shoppers indicated that their holiday spending might drop due to economic concerns. This year only 27 percent indicated that. And higher employment numbers can contribute to an increase in disposable income.

But there’s something relatively new in the mix this year: an increase in same-day delivery as a shipping method. According to the NRF’s report, 12 percent of respondents say they will take advantage of same-day delivery if it’s offered.

If over one-tenth of shoppers end up using same-day delivery for holiday purchases, we can expect a lot of interesting news as the holiday season progresses. But the first question remains: why is same-day delivery gaining ground? Here are our thoughts:

The online channel has finally surpassed brick & mortar for holiday sales.

The NRF study finds that 59 percent of respondents plan to do their holiday shopping online, rather than in brick & mortar stores. This is a first in the history of NRF’s holiday data collection, and it’s a significant one.

With a larger percentage of shoppers placing online orders, the use of shipping options increases. And same-day delivery is now an option with many major retailers – not just Amazon. Walmart and Target have both acquired on-demand service providers to offer the service, and others are following suit.  

Given the increase in online orders as a portion of total holiday sales, we expect to see same-day delivery selected more frequently as a delivery option.

Retailers are starting promotions earlier, but shoppers are still waiting until the last minute.

According to RetailMeNot’s 2017 Holiday Trends and Guide, the holiday shopping season starts earlier – much earlier. Retailers have been preparing for the holidays for months, as per usual. But this year, more than half of retailers launched holiday promotions as early as September.

On the flip side, consumers are waiting until the last minute to do their holiday shopping. Almost two-thirds of respondents in the NRF study said that they will begin their holiday shopping in November – or afterwards. That’s not much time to meet the December 25th deadline.

With shoppers making more holiday purchases online AND putting it off until the last minute, there will be an increased need for on-demand service. We expect the percentage of shoppers using same-day delivery to increase during the 2017 holiday season.

Consumers are coming to expect same-day delivery, and will show loyalty to retailers that provide it.

You’ve heard it before: consumers are coming to expect same-day shipping because of their experiences with Amazon and other heavy hitters. And now, in Dropoff’s 2nd Annual Holiday Survey, they’re telling us they want it – loud and clear. Here’s a sampling of the data:

• 90 percent of respondents have a higher likelihood of making a purchase if the retailer in question offers same-day delivery.
• 75 percent of respondents will likely make a repeat purchase if a retailer offers same-day delivery.
• Respondents are 26 percent more likely to recommend a retailer to a friend if they offer same-day delivery, rather than recommending a retailer that offers free delivery.

Same-day delivery will have a record year in 2017.

No matter what happens, we can expect to learn a lot about the consumer experience with same-day delivery in the remaining months of 2017. What are your predictions? Tell us in the comments.