April 9, 2001, 12:00 AM

New shipping option could reduce costs

Consolidated deferred delivery would trade slower delivery for lower shipping rates.

E-retailers seeking to trim shipping costs for themselves and their customers could borrow a delivery model used in b2b commercial shipping but so far not widely seen in b2c applications, Gartner Group Research Director Geri Spieler tells Internet Retailer. Called consolidated deferred delivery, it rewards recipients for their willingness to wait up to two weeks for delivery on merchandise ordered online in the form of lower shipping charges.

“If I live out in the suburbs, shippers could consolidate more package deliveries to make it more worth their while to get out to where I live,” says Spieler. One catch: the merchant must find a shipper willing to accept the deal. But Spieler says it could be a win for all parties, with customers getting the option of a reduced shipping fee, third-party shippers getting more time to consolidate shipments before delivering to a given zone, and web merchants getting points for improved customer service.

Shipping charges will continue to be a significant issue for web retailers as the online marketplace grows, with online shopping expected to help kick up the number of small package deliveries in the U.S from 63 million in 1999 to 2.8 billion by 2003. “A cheaper shipping option will increase the chance that customers will not abandon shopping carts before finishing the transaction,” says Spieler.

 

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