Fast delivery has become a major driver of customer satisfaction in today's on-demand world. A 2024 UPS Capital report shows that over half of merchants anticipate a 30% increase in shipping volume this year.1 This surge underscores the breakneck pace of the eCommerce industry, as consumers increasingly favor shopping with retailers that deliver within two days or less.

Merchants face a delicate balancing act in meeting these consumer demands: providing expedited delivery while managing rising operational costs. The 2024 Need for Speed report, commissioned by UPS Capital, explores strategies for navigating this challenge, drawing insights from 500 eCommerce merchants and 1,000 U.S. consumers.

Expedited Delivery is Revving Up

In the past five years, the number of merchants offering two-day shipping has increased by 47%. While 43% of consumers surveyed say they receive their online orders within two days on average, even more expect this to be the norm. Only 18% feel that two-day shipping is unnecessary.

The demand for even faster delivery is also growing. Next-day shipping has increased by 58%, and same-day shipping has surged by an impressive 164% in five years.

Nearly three in five (59%) merchants surveyed believe Amazon is responsible for the shift in quick shipping standards. The eCommerce giant has set a high bar, forcing smaller retailers to adapt or risk losing customers.

More than half (54%) of consumers surveyed are willing to pay extra for expedited shipping. They’re especially eager to receive health and wellness products, electronics, and apparel within two days. In contrast, items like games/toys and furniture/home goods are less likely to prompt such urgency, likely because they’re seen as less critical to day-to-day needs or important events.

The takeaway: fast shipping is a powerful competitive advantage. Almost all (97%) merchants surveyed report positive impacts on customer retention and repeat purchases when offering expedited delivery.

Outpacing Global Competition

As cost-competitive international players like Temu and Shein gain ground, 85% of merchants surveyed report that these competitors are impacting their shipping strategies.

In response to this competitive pressure, 42% of respondents have adopted faster and more affordable shipping options to match the quick delivery promises and lower costs that attract customers to international retailers.

For 61% of consumers surveyed who have shopped with brands like Temu and Shein, price has been the influencing factor when shopping globally.

Nearly half (47%) of participants say they would be more likely to shop with international retailers, rather than domestic giants like Amazon or Target, if those retailers offered free expedited shipping on all orders.

Expedited Delivery Speed Bumps

Meeting the demand for faster delivery comes at a cost. Over four in five (84%) merchants surveyed report that these expectations have increased their operational expenses. Notably, 37% now spend more than $100,000 annually on expedited shipping (excluding staffing costs).

As shipping timelines accelerate, the risk of issues like lost, stolen, or damaged packages also increases. As a result, 35% of merchants surveyed identify managing shipping claims as a top challenge. These problems not only strain operations but also harm customer satisfaction.

In fact, 74% of respondents acknowledge that delivery issues impact customer retention, with half reporting a “strong” effect on their ability to retain customers.

Additionally, nearly three in five (59%) merchants surveyed handle shipping-related complaints internally, which can put additional tension on their resources. These statistics highlight the need for trusted partners and efficient tools to help manage claims, streamline processes, and improve customer satisfaction.

Crossing the Finish Line to Deliver ROI, CX

Two-day shipping has become table stakes, raising customer expectations across the board. As consumer preferences continue to evolve, merchants must stay proactive by monitoring shifts and emerging trends in the post-purchase experience to remain competitive against both domestic and international players.

UPS Capital offers tailored solutions to help merchants navigate these complexities. From managing shipping claims for lost, stolen, or damaged packages to providing insights that optimize delivery performance and reduce costs, UPS Capital equips businesses with the tools they need to thrive in an increasingly competitive market. By partnering with UPS Capital, merchants can strengthen their operations, enhance customer satisfaction, and maintain a competitive edge in the fast-paced world of eCommerce.

For more data on how to handle the demand for fast shipping, get the full report.

For media inquiries, please contact upscapital@pancomm.com.