Free delivery for customers? Is it sustainable?

By Ben Nowlan on 5th December 2018

Top of everyone's mind, how can retailers use free delivery to attract new customers while keeping a healthy bottom line?

Today's White board Wednesday, Ben discusses the pros and cons, along with some tips we can adopt to make informed decision.

Watch or read the transcription below.

 

 

Hi and welcome to Whiteboard Wednesday.

Today, we're going to discuss free delivery and if it's sustainable.

This is because it's been quite a topical discussion I've seen online and internationally over the last week or so, where some answers ranging that it's not sustainable, and logistics companies and retailers can't support this.

This is something Amazon is doing based on their prime memberships and will fund forever to win the customer. The Amazon part may be true, but I think the answer around the independent retailer and the sustainability shouldn't be so binary.

What we need to do is look at how we drive our supply chain decisions, particularly how we drive decisions for delivery at check-out, based on data. And therefore, rather than looking at it from a blanket approach, we look at it from a personal approach and then you can actually use free delivery to incentivize and reward customers based on their lifetime spend with you, because there's the main point.

We should focus on the cost to fund free delivery. We should be worried about the cost of trying to attracting customers to return again and again because they have so much choice and someone else may be offering a better experience.

So, think about delivery driven by data at a customer level to incentivize and reward your customers and then you can win the battle. Thank you for tuning in today.

Hope you've enjoyed my opinions on this quite topical debate.

See you next time for Whiteboard Wednesday. 

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