Delivery Timing Is More Important Than Delivery Speed

Consumers want the convenience of pre-determined and reliable delivery and scheduling.

August 26, 2021

Checking the Time on a Wrist Watch

ALEXANDRIA, Va.—Even as delivery startups promise goods at your door in as little as 10 minutes, retailers that aren't equipped to fulfill orders on a dime are actually in the best position to provide customers what they want when they buy food online, reports GroceryDive.com.

That's because traditional food retailers have large quantities of information about customers’ online shopping behavior and delivery preferences, according to a new study on grocery delivery. When taken together, that information can be used to understand the links between what customers buy and how they want to receive their orders, said Pedro Amorim, assistant professor of industrial engineering at the University of Porto in Porto, Portugal and one of the study's two authors.

"It's important that retailers understand that they need to improve their planning operations, they need to be more granular, they need to have more info about how much time it takes to go from A to B at a given point in time," Amorim said.

To discern the connection between people's shopping patterns and delivery preferences, Amorim and co-author Nicole DeHoratius, a professor at the University of Chicago Booth School of Business, worked with an unnamed European food retailer with about 3,000 stores across multiple countries to analyze 152,195 online grocery transactions. For each transaction examined, the researchers knew what the customer ordered, the delivery slots they were offered and the slot they selected.

The study concluded that collected shopping data sheds light on a variety of factors that impact delivery choices, and those factors are easily be overlooked. For example, the researchers found that people with larger baskets were willing to pay more for both delivery speed and precision.

The professors discovered that people who repeatedly placed orders with the retailer were willing to pay more than other shoppers to lock in their delivery preferences, and customers with large baskets were willing to pay twice as much as people who bought less to arrange for a delivery window tighter by one hour.

Other research suggests that delivery speed is the most important factor for many grocery delivery customers. For example, 61% of participants in a survey conducted by NielsenIQ earlier this year said they prefer to receive their orders as quickly as possible.

Startups promising delivery in as little as 10 minutes have expanded across cities in the United States and Europe, and a few, including Gorillas and Jokr, have recently landed in New York. In May, Instacart launched a 30-minute delivery and expanded its 45- and 60-minute delivery windows to meet what it said is growing demand for faster fulfillment options.

Register to attend the 2021 NACS Show October 5-8, at McCormick Place in Chicago and take advantage of the education sessions on technology, including the sessions Meeting Consumers Where They Are—Everywhere on October 5 and Drive-Thru and Curbside: Is This the Future for C-Stores? on October 6.

Advertisement
Advertisement
Advertisement