Parcel customers are moving away from a sole focus on speed of delivery to a concern about price, and carriers must respond by controlling their costs, says Dave Loonam, senior vice president of sales with DHL eCommerce.

Loonam recalls 2019 and 2020, when the “Amazon Effect” was driving e-tailers to offer shoppers speedy delivery. Soon after, however, consumers became equally interested in cost, placing more of an emphasis on economical delivery. DHL's own study found 75% of respondents selecting price over speed when considering cart abandonment.

Carriers of course, could no longer absorb the cost of quick delivery, so their concern with cost aligned with that of shoppers. “’If I have to wait an extra day for $3 less, I’ll do that,’” Loonam says, voicing the sentiment of the customer.

Reliability and visibility are of greater importance to consumers today, Loonam says. “Transparency trumps speed in many cases.” The receiver is satisfied as long as they know where their order is, and when it’s scheduled to arrive.

Yet another trend to come out of the pandemic and its immediate aftermath was a dramatic expansion in the number of parcel carriers serving e-commerce shoppers. An explosion of consumer demand at the height of the COVID-19 lockdown brought new opportunities to a raft of service providers, posing a competitive challenge to the national carriers. Demand since that time has slackened, Loonam says, but it’s still “super important for the retailer to look at who adds the best value in any area” — whether that’s the dominant integrators, regional carriers or consolidators.

With the parcel market becoming more competitive, carriers have an incentive to improve service, as they vie for the loyalty of e-commerce shoppers, Loonam says. At the same time, an emphasis on cost control allows service providers “to give shippers a more stable pricing model, despite so many factors that are outside the carriers’ control.”