Discover more from The Repeat Saturday Email
(No, not that one.)
A month ago, I bought my son a soccer jersey from the Philadelphia Union’s online store. About two days later, I got an email saying the jersey wasn’t available and they’d ship it in mid-April.
Quite the delay. Did I cancel it? Of course not. Was I disappointed? Of course. But if I could have gotten it sooner, easier? Definitely would have.
But where else was I going to get a kid-sized MLS jersey with his favorite player’s name and number?
The only other choice I could think of was to drive to the team store at the stadium (an 80-minute roundtrip). Didn’t seem worth it. So, we’re still waiting—a month later. Maybe it’ll be here soon.
We bring up this story, because earlier this week, The Wall Street Journal published an article with the headline “Fast Delivery Isn’t Always Shoppers’ Top Priority.” In it, the WSJ reporter suggested a growing consumer willingness to wait for packages “reflects what may be the fastest-growing trend in online commerce, as many shoppers begin to back away from demands for urgent delivery that have fed a race among online retailers and parcel carriers to fill orders in just a day, within an hour and even faster.”
The reporter continued:
“Now, some consumers are showing more willingness to wait and greater reluctance to bear the costs of getting basic household items in hours rather than days.”
In reading it, we couldn’t help but think this is the contemporary equivalent to early-day coverage of SUV sales. Remember when gas prices rose steeply in the early 2000s and, according to the media, everyone quit buying sedans?
Consumer price sensitivity is real, of course, and it sunk GM’s Hummer H2. But the H2 was an outlier.
A Jalopnik article on the H2 opened by stating:
It represented the pinnacle of early 2000s excess, extreme consumerism, General Motors’ arrogance, empty post-9/11 American patriotism, and an absolute waste of natural resources. If there’s an automotive equivalent to the phrase “we’ve gone too far,” it’s the Hummer H2.
The H2 may be the automotive industry equivalent of 15-minute delivery apps. But fast shipping is likely commerce’s SUV.
SUVs now make up more than 50% of all new vehicle sales. And some of the largest manufacturers—like Ford—don’t even make sedans for sale in the U.S.
While The Wall Street Journal article cited some consumer preference from surveys conducted by Shippo and Shipstation, it neglected to show the correlation between macro-economic trends. The reporter wouldn’t had to look very far.
Within Shipstation’s report—in fact, within the same graph containing the referenced statistic—Shipstation shows that consumers’ lessened desired for shipping speed is nearly equivalent to consumers’ heightened sensitivity for shipping costs. In other words, people have opted for cheap over fast. For now.
James Carville once had a line about this.
Target and Walmart are, in a way, ignoring the current consumer sentiment and continuing to invest in catching Amazon’s logistics and delivery speeds. In February, for example, Target announced a $100 million investment in next-day delivery options and Sam’s Club said they’ll add 14-16 new fulfillment centers to “evolve the supply chain to match that future growth and continue to double down in creating that fantastic experience for our members.”
When consumers are worried less about the economy, it’ll be fast over cheap again. And fast will continue to win until retailers make sure fast is cheap.
The trend isn’t shipping speed doesn’t matter. It’s that it does. Just like it was for SUVs.