August 24, 2015
Source: target.com
Target sets online delivery promise
[avatar user=”tryan@retailwire.com” size=”100″ /]
This fall, Target will be testing a new program, “Available To Promise,” providing customers more clarity on delivery timing for items ordered online.
Specifically, customers will be offered a specific delivery commitment—typically two or three business days—if they order on a specific date. Currently, guests are offered a delivery window of four to nine days with most deliveries arriving within five to seven days.
“We believe this capability will drive further increases in digital conversion rates, which are already improving rapidly, as guests respond to a faster and firmer delivery commitment,” Target CEO Brian Cornell said last week on Target’s second-quarter conference call.
Added Mr. Cornell, “We want to give them the confidence that when they order they know it’s ‘available to promise’ and we’re going to have it there for them when they need it.”
The program is expected to draw attention to Target’s improved shipping times, aided in part by its enhanced ship-from-store capabilities. Target is currently shipping digital orders from approximately 140 of its 1,800 doors and by the end of this year will be shipping from more than 450 locations. Said Cornell, “Ship-from-store capabilities allow us to balance inventory across the network, leverage the capital and labor already in our stores and reach guests more quickly.”
Both “Available To Promise” and ship-from-store support Target’s goal of becoming the leader in digital. Said Mr. Cornell, “This is critically important because guest research shows that digital relevance drives traffic and engagement across all selling channels.”
Target delivered a strong 30 percent rise in digital sales in the second quarter, although it was below Mr. Cornell’s stated goal of expanding digital at a 40-percent clip.
Other priorities to expand digital include building awareness and encouraging digital engagement, improving website and mobile functionality such as finding product and easing checkout, and maximizing in-store pickup. In February, Target reduced the threshold of what consumers had to spend to qualify for free shipping to $25 from $50.
According to a survey of 800 adults conducted in the U.K. by Ipsos Research on behalf of Honeywell:
- Almost all consumers (99 percent) expected a delivery to arrive within one week of ordering;
- The majority of respondents (53 percent) now expect the estimated time of delivery to be precise within three hours or less;
- Four in ten consumers (40 percent) said they would be willing to pay extra for the “perfect delivery,” in which they designate exactly where and when their parcel will be delivered.
- Target’s (TGT) CEO Brian Cornell on Q2 2015 Results (Earnings Call Transcript) – Seeking Alpha
- Target’s latest e-commerce weapon? More precise delivery windows – Fortune
- Target To Test Program That Gives More Specific Delivery Window For Online Orders – Consumerist
- Survey: UK Consumers Expect Quick and Convenient Delivery From Retailers – Honeywell
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Discussion Questions
Are broad and uncertain delivery windows a particular pain point for online shoppers? Will providing shorter delivery windows and greater transparency around package arrivals greatly help Target’s e-commerce positioning?
Poll
Great move. Not a game-changer, but it definitely makes Target more competitive with their online peers.
It takes time and investment to build the systems and logistics infrastructure to support these kinds of commitments, but they pay off in loyalty and retention.
Sounds a lot like trying to get to where Amazon is today.
Amazon has been setting the gold standard for consumer deliveries for a long time. If ordering from Prime, or if Amazon is fulfilling, the customer gets a confirmed delivery date. More importantly, there is an immediate email with a “click-to-track” every step of the delivery.
Nothing against Target’s initiative — it gets them in the game. Confirmed delivery will help their conversion online. But it is hardly a game changer in terms of positioning Target’s e-commerce as breakthrough.
I think uncertain delivery windows are a pain-point for certain types of purchases — and Target’s products are a great fit for shorter delivery windows. Target is a great resource for all of those little things you need to pick up before the weekend. Giving shoppers the power of knowing that their purchases will arrive in time is an excellent way to build a stronger relationship and become a go-to e-commerce site.
I don’t know that it is a pain point so much as a competitive gap. Amazon is incredibly explicit about when your package will arrive — and it will arrive, typically, very fast. That sets a bar for consumer expectations that other retailers have to compete against. I know I am sometimes surprised when I order from smaller online companies and it takes a couple of days just to receive the order confirmation or the ship notification, forget about the product. Maybe I’m too much of an industry insider, but when that happens it makes me question the company’s competency. That’s bad.
Hopefully Target’s transparency and speed will help not just their e-commerce positioning (that’s still thinking in terms of channels first!), but their overall positioning with their shoppers. And maybe their efficiency in leveraging their inventory. That would be great.
Having the ability to more accurately provide an ETA to its customers is absolutely a big deal for Target.
Yes Amazon has been doing this for several years, but Amazon does not have to deal with a particular type of complexity that retailers with stores (such as Target) have to. A fairly large percentage of inventory with such retailers resides in stores and this inventory is oftentimes very volatile (not easy to track, prone to inaccuracies, may be display inventory, etc.) and predicting availability means adjusting for these eventualities, and that is easier said than done. Warehouse/DC inventory (which is where most of Amazon’s inventory lies) on the other hand, is easier to account for and can hence be more accurately projected for its availability.
In business we want to meet and exceed our customers’ expectations. Delivery issues have been a problem in the past. I remember the debacle that took place during the 2013 holiday season. Some of the delayed packages didn’t show up until after the holidays. A year later the retailers and shipping companies (FedEx, UPS, USPS, etc.) were much better prepared, and they did an excellent job of informing the customer of when to expect their packages. In most cases they met, if not exceeded, the expectation.
The point is that the retailer needs to be clear to the customer about what to expect. When I order something through Amazon Prime, I expect it within two days. If Target, or any other retailer, misses their customer’s expectations, they risk losing the customer’s confidence, which could ultimately lead to losing the customer’s business.
If Target promises shorter delivery windows they must deliver. They are doing an excellent job in so many areas and it would be a shame to to lose a customer because they missed this simple, yet important, expectation.
Amazon changed ecom from a way to save money on taxes to a way to avoid driving. Target is smart enough to realize there are many segments that do not want to set foot in a retail store. And most of those segments want transparency and speed in delivery.
While not far-reaching enough, it’s a start.
I think “Available to Promise” will mainly boost customer satisfaction. Delivery is definitely a pain point that needs to be addressed for the majority of retailers that haven’t been able to get it right just yet. Happy shoppers will share their good experiences via social media and word of mouth. It’s a good move for Target and other retailers should follow suit in order to stay competitive.
Having the ability to more accurately provide an ETA to its customers is absolutely a big deal for Target.
Yes Amazon has been doing this for several years, but Amazon does not have to deal with a particular type of complexity that retailers with stores (such as Target) have to. A fairly large percentage of inventory with such retailers resides in stores and this inventory is oftentimes very volatile (not easy to track, prone to inaccuracies, may be display inventory, etc.) and predicting availability means adjusting for these eventualities, and that is easier said than done. Warehouse/DC inventory (which is where most of Amazon’s inventory lies) on the other hand, is easier to account for and can hence be more accurately projected for its availability.
Any time a delivery time can be short, and expected within a certain time range is a delight for the recipient (who’s too often in the past been fouled or fooled) by unrealistic delivery expectations. A $25 minimum order? The delivery costs are going to have to be tightly controlled or it’s not effective for the retailer (Target). And what about the person that orders one $25 item for delivery, and then orders another $25 item the next day for delivery; etc.? I think there’d be a diminishment of cost efficiency all down the line. I applaud Target, but look forward to seeing how this pans out.
Welcome to the world of Amazon! Broad delivery time schedules are a poor retail decision. Target’s decision to shorten this is a move in the right direction, but they need to deliver an even shorter and more accurate delivery promise if they hope to compete with the rest of the online retailers (Amazon).
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Great move. Not a game-changer, but it definitely makes Target more competitive with their online peers.
It takes time and investment to build the systems and logistics infrastructure to support these kinds of commitments, but they pay off in loyalty and retention.
Sounds a lot like trying to get to where Amazon is today.
Amazon has been setting the gold standard for consumer deliveries for a long time. If ordering from Prime, or if Amazon is fulfilling, the customer gets a confirmed delivery date. More importantly, there is an immediate email with a “click-to-track” every step of the delivery.
Nothing against Target’s initiative — it gets them in the game. Confirmed delivery will help their conversion online. But it is hardly a game changer in terms of positioning Target’s e-commerce as breakthrough.
I think uncertain delivery windows are a pain-point for certain types of purchases — and Target’s products are a great fit for shorter delivery windows. Target is a great resource for all of those little things you need to pick up before the weekend. Giving shoppers the power of knowing that their purchases will arrive in time is an excellent way to build a stronger relationship and become a go-to e-commerce site.
I don’t know that it is a pain point so much as a competitive gap. Amazon is incredibly explicit about when your package will arrive — and it will arrive, typically, very fast. That sets a bar for consumer expectations that other retailers have to compete against. I know I am sometimes surprised when I order from smaller online companies and it takes a couple of days just to receive the order confirmation or the ship notification, forget about the product. Maybe I’m too much of an industry insider, but when that happens it makes me question the company’s competency. That’s bad.
Hopefully Target’s transparency and speed will help not just their e-commerce positioning (that’s still thinking in terms of channels first!), but their overall positioning with their shoppers. And maybe their efficiency in leveraging their inventory. That would be great.
Having the ability to more accurately provide an ETA to its customers is absolutely a big deal for Target.
Yes Amazon has been doing this for several years, but Amazon does not have to deal with a particular type of complexity that retailers with stores (such as Target) have to. A fairly large percentage of inventory with such retailers resides in stores and this inventory is oftentimes very volatile (not easy to track, prone to inaccuracies, may be display inventory, etc.) and predicting availability means adjusting for these eventualities, and that is easier said than done. Warehouse/DC inventory (which is where most of Amazon’s inventory lies) on the other hand, is easier to account for and can hence be more accurately projected for its availability.
In business we want to meet and exceed our customers’ expectations. Delivery issues have been a problem in the past. I remember the debacle that took place during the 2013 holiday season. Some of the delayed packages didn’t show up until after the holidays. A year later the retailers and shipping companies (FedEx, UPS, USPS, etc.) were much better prepared, and they did an excellent job of informing the customer of when to expect their packages. In most cases they met, if not exceeded, the expectation.
The point is that the retailer needs to be clear to the customer about what to expect. When I order something through Amazon Prime, I expect it within two days. If Target, or any other retailer, misses their customer’s expectations, they risk losing the customer’s confidence, which could ultimately lead to losing the customer’s business.
If Target promises shorter delivery windows they must deliver. They are doing an excellent job in so many areas and it would be a shame to to lose a customer because they missed this simple, yet important, expectation.
Amazon changed ecom from a way to save money on taxes to a way to avoid driving. Target is smart enough to realize there are many segments that do not want to set foot in a retail store. And most of those segments want transparency and speed in delivery.
While not far-reaching enough, it’s a start.
I think “Available to Promise” will mainly boost customer satisfaction. Delivery is definitely a pain point that needs to be addressed for the majority of retailers that haven’t been able to get it right just yet. Happy shoppers will share their good experiences via social media and word of mouth. It’s a good move for Target and other retailers should follow suit in order to stay competitive.
Having the ability to more accurately provide an ETA to its customers is absolutely a big deal for Target.
Yes Amazon has been doing this for several years, but Amazon does not have to deal with a particular type of complexity that retailers with stores (such as Target) have to. A fairly large percentage of inventory with such retailers resides in stores and this inventory is oftentimes very volatile (not easy to track, prone to inaccuracies, may be display inventory, etc.) and predicting availability means adjusting for these eventualities, and that is easier said than done. Warehouse/DC inventory (which is where most of Amazon’s inventory lies) on the other hand, is easier to account for and can hence be more accurately projected for its availability.
Any time a delivery time can be short, and expected within a certain time range is a delight for the recipient (who’s too often in the past been fouled or fooled) by unrealistic delivery expectations. A $25 minimum order? The delivery costs are going to have to be tightly controlled or it’s not effective for the retailer (Target). And what about the person that orders one $25 item for delivery, and then orders another $25 item the next day for delivery; etc.? I think there’d be a diminishment of cost efficiency all down the line. I applaud Target, but look forward to seeing how this pans out.
Welcome to the world of Amazon! Broad delivery time schedules are a poor retail decision. Target’s decision to shorten this is a move in the right direction, but they need to deliver an even shorter and more accurate delivery promise if they hope to compete with the rest of the online retailers (Amazon).