Most shipping club members look for one, primary benefit in their membership: short delivery times at no incremental cost. Considering the importance of this benefit, we decided to examine how well shipping club sponsors, retailers or other entities providing this service, live up to delivering on this promise.
Bizrate Insights collected nearly 6,400 responses from online shoppers who participate in shipping clubs to learn more about late deliveries and how they affected buyers’ intention to renew.
Shipping Clubs: Why On-Time Delivery Matters
33% of surveyed buyers reported being members of a shipping club, the most popular memberships being Amazon Prime (28% of all respondents) and Barnes & Noble (5% of all respondents). Of this 33%, 28% report that their membership is a free trial.
Of all shipping club members, 43% reported they may not renew their memberships; nearly a quarter of that group (9.7% of all shipping club members) said it was specifically due to late package deliveries in December 2014, while the additional 33% were considering non-renewal for other reasons.
Members of the two biggest shipping clubs—Amazon first, followed by Barnes & Noble—report that 21% and 8% of orders in December 2014 were delivered late, respectively.
Free Trial Members More Prone to Cancel
When we compared free trial vs. paid shipping club members, there was a notable difference in buyer’s reluctance to renew.
- 73% of free trial members may not renew
- 31% of paid members may not renew
Of those who may not renew…
- 24% of free trial members may not renew due to late deliveries
- 22% of paid members may not renew due to late deliveries
A Closer Look at Amazon Prime
We examined responses by Amazon Prime members, who represent 74% of shipping club memberships, and found that not only did 21% of Prime members report receiving a package late, but the number may in fact be 50% higher, given that 31% of respondents agreed that some of their items ordered through Amazon Prime arrived in more than two days.
These numbers were higher than average amongst Generation Y; 26% reported at least one Amazon Prime order arriving late in December 2014, and 35% report that some of their Prime items arrived in more than two days.
Late delivery was also of notable importance to Amazon Prime members; out of 41% of Prime members considering non-renewal, 9.6% (about a quarter) were considering non-renewal specifically due to late deliveries. The other three quarters were considering it for other reasons.
26% of December 2014 Amazon Prime members report that their membership was under a free trial.
The bottom line: on-time delivery is very important to the longevity of shipping club membership. In fact, it’s deeply important to all buyers. We see this in the high correlations between on-time delivery and key loyalty metrics, as well as the power of reliable delivery to entice shoppers to convert online, as reported in our January BizAdvisor; 37% of online shoppers would buy a greater percent of 2015 Holiday purchases online if they have guaranteed on-time delivery.
These buyer sentiments no doubt make a difference in the bottom line of any retailer or service that provides shipping club memberships, and should be a key priority to consider in the coming year.
About This Study
This Shipping Clubs and Late Deliveries Study was conducted via the Bizrate Insights survey platform and offered to online buyers immediately after purchasing from the Bizrate Insights Network of over 5,000 e-commerce retailers in the US and Canada. Amazon.com, Inc. is not a member of the Bizrate Insights Network. Data from the study was collected from 6,396 online buyers from January 7-14, 2015.