Over the past four years, the e-commerce landscape has experienced a seismic shift. 

The pandemic-fueled surge, in which e-commerce volumes grew at an aggressive 18% annually, has now stabilized to a more moderate 8.8%, according to a study released by Shopify. This recalibration, coupled with the lingering effects of the pandemic and the ongoing impact of inflation, has transformed the economics of parcel delivery, putting immense pressure on traditional logistics systems and retailers. 

Consumers today crave fast, on-time and affordable shipping, but retailers are caught in a tough spot, especially entering peak season. Rising shipping costs and labor shortages are making it harder than ever to meet these expectations. The pressure is mounting, forcing retailers to rethink their approach to last-mile delivery this peak season and beyond.

To navigate these challenges, retailers must prioritize customer needs while carefully evaluating the return on their shipping investments. Following are some key strategies that can help brands close this gap, and thrive in the evolving world of e-commerce.

The key to success in this new era lies in understanding evolving consumer expectations. Recent research from McKinsey & Company revealed what matters most to customers when it comes to delivery: speed, shipping costs, reliability and convenience. 

While speed still reigns supreme in e-commerce, it's just one piece of the puzzle when it comes to building a loyal customer base. For example, McKinsey also found that a staggering number of consumers (88%) are likely to abandon their shopping carts due to poor shipping terms, while 85% say they will not shop with a retailer again after having a poor delivery experience. 

The research also showed a high sensitivity to shipping costs, with many consumers willing to accept slightly longer delivery times to avoid high shipping costs, especially if brands can meet or exceed expectations in other areas. This underscores the importance of offering free or reduced shipping, even if it means standard delivery times.

Such a strategy can significantly improve conversion rates and drive sales. Fulfilling the delivery timing expectation that you set with customers is critical. Accurate delivery windows, clear communication and careful handling of packages can also help retailers deliver a positive customer experience in a competitive marketplace.

A truly satisfying delivery experience goes beyond just cost and speed. It's about providing a seamless and convenient process from start to finish. In e-commerce, convenience, reliability and transparent communications are highly valued because consumers want more control over the delivery and returns process. By offering flexible delivery options, such as scheduled delivery times, alternative delivery locations and returns that can be picked up at a customer's home can significantly enhance the customer experience and set a business apart from its competitors.

Retailers must pay attention to what customers actually want. They want free shipping, of course, but will pay amounts proportionate to the purchase.

Happy customers buy more, and more often. Over 90% will reorder after a good delivery experience; 65% won’t after a bad one. A good delivery experience also drives a 19% increase in repurchase rate and 8% increase in net promoter score.

At the same time, a good delivery experience can reduce retailers' customer service costs — including the price of replacing missing packages — by 35%.

Technology enables real-time tracking and proactive communication customers. A recent Incisiv study shows that 96% of brands currently believe real-time delivery updates and tracking are important to their shoppers, but only 86% offer real-time delivery updates and tracking.

Offer your customers flexibility in their delivery and return options. This can include providing scheduled delivery times, alternative pick-up locations, and hassle-free returns.

Lastly, harness the power of data and technology to gain insights into your customers' preferences and optimize your operations. Utilize data analytics, artificial intelligence and machine learning to understand consumer behavior and tailor your shipping strategies accordingly. Invest in technology to streamline your shipping and logistics, improve efficiency and reduce costs.

The e-commerce landscape will continue to evolve, and consumer expectations will shift alongside it. Brands that stay attuned to these changes and adapt their shipping and logistics practices accordingly will be well-positioned for success. The key lies in understanding customer preferences, prioritizing reliability and communication, embracing convenience and flexibility, and recognizing the growing importance of sustainability.

By reimagining their shipping and logistics practices, retailers can exceed customer expectations, foster brand loyalty and drive long-term success. The future of e-commerce is bright, and those who adapt won’t just survive, but thrive.

Deborah Surrette is chief commercial officer at Veho.