What Your Neighbors Get Delivered And How Much They Pay For Delivery

What Your Neighbors Get Delivered And How Much They Pay For Delivery

Delivery has changed how you shop and live. It turns out you’re not alone, your neighbors’ and friends’ lives have changed too.

A report from Circuit Routing, which plans trips to avoid traffic and save time, found that more than 3/4 of American households get a delivery once a week or more and almost 25% get a daily delivery.

What They’re Getting Delivered

Americans’ willingness to buy things they haven’t tried in person has evolved a lot since Amazon
AMZN
began by selling only books.

At that time, most consumers were unwilling to buy anything that required a fit, like clothes and shoes. Now the leading category of products shipped to homes is apparel; footwear is usually third or fourth. Items previously thought to be unsuited to online shopping get adopted because it’s so convenient.

It’s not just consumers that have changed attitudes. Retailers have had to make returns more feasible and tolerate consumers who order mutliple sizes and hold on to the goods while they decide what to keep.

Since the pandemic scrambled how consumers behave, the products shifting to online purchasing fastest hasve been pet-related. Next to pet, CBD, skincare and sports equipment have moved online fastest.

Online grocery has experienced 20% growth during the pandemic. Because it’s one of the largest retail categories at almost $800 billion, grocery is likely the largest product value to move online and the change is causing upheaval in the grocery industry (see related article about Kroger’s
KR
acquisition of Albertson’s). Groceries are now the largest category of auto-shipped product (better known as subscription) and that aspect of grocery is likely to continue to grow well into the future.

Advertisement

But there are numerous sub-categories where growth online has been enormous. In the last twelve months, beer delivered to homes grew by 800% and birth control by 700%.

What They Pay

Online shoppers spend an average of $817 per year in delivery fees.

Older consumers are less comfortable with the online buying process. Boomers pay much less in delivery fees than other consumers, about $450 per year, and Gen Z’ers (18-25 years old) pay over $900 per year.

There’s a myth that there’s a large cohort of consumers up at night shopping at 2 a.m. In reality less than 10% of online shoppers typically shop late. Those that do pay more in delivery fees per year, almost $850 per year. What’s bought late at night is not materially different than what all shoppers buy.

Men are far more likely to get a daily delivery, 64% of men vs 36% of women that say they get a package daily.

The Future Of Delivery

Delivery is going to keep growing and evolving. As consumers learn how to buy things online in ways that work for them and retailers adapt to their needs, the convenience of online will continue to grow.

Categories that are now very challenging to purchase online, like prescription eyewear, are going to develop and become more accessible. Now a company called Topology has developed an app that works on an iPhone or iPad that can measure your face and ensure a fit that’s as good as in-store. Over time, technology like that will allow previously unbuyable products, like food or drinks you haven’t tasted before, to transition online.

One of the most important knock-on effects of online adoption is how physical stores will have to evolve. They will need more compelling, entertaining and personalized products and services to get consumers to keep coming in. Surprisingly, Gen Z consumers have a strong preference for shopping in-store as long and in-store experiences need to keep up with what’s available online.

Online adoption and delivery is one of the most important changes the retail industry has ever seen and its effects are going to continue to impact consumers and retailers for decades to come.

Advertisement

Leave a Reply

Your email address will not be published. Required fields are marked *