Speed sells. A missed date costs more than speed earns. Set the checkout date from your own delivery data, at the share of orders you’re willing to be wrong about.
You can improve a delivery promise by making delivery faster, which costs warehouses and carrier upgrades, or by making the promise truer, which costs a little conversion. Most brands spend on the first. The research says the second is where the retention is.
When a US apparel retailer opened a new distribution center that cut delivery times to its western customers, Marshall Fisher, Santiago Gallino and Joseph Xu found online sales rose about 1.45% for each business day saved, from a starting point of seven business days, with a spillover to the retailer’s stores Published. On Alibaba’s Tmall, Vinayak Deshpande and Pradeep Pendem estimated that cutting three-day deliveries to two days would lift average daily sales for third-party sellers by 13.3% Published. In a business-to-business online store, Shin Oblander and Kinshuk Jerath found each day off the promised time lifted demand 1.82%, like a 2.21% discount, though buyers barely reacted to promises under a week Published.
One study separates the promise from the delivery. Ruomeng Cui, Zhikun Lu, Tianshu Sun and Joseph Golden worked with Collage.com, which sells custom photo products, to change the delivery estimates shown on the site while the actual delivery speed stayed the same. A faster promise raised sales and profits. It also raised returns and reduced customer retention Published. The faster date bought orders today with broken promises that cost orders later.
Recall from chapter 2 that lateness hurts repurchase more than earliness helps. And when Nooshin Salari, Sheng Liu and Zuo-Jun Max Shen built a model on JD.com data that forecasts the whole spread of possible delivery times and sets each promise with the cost of being late in mind, their simulations put the sales gain over JD.com’s existing policy at 6.1% Published. A promise set from data, not a template, is worth money in both directions.
A fast promise wins the order. A kept promise wins the next one.
Most checkout promises are set from the typical delivery: “usually 3 to 5 business days.” But the slow tail, not the typical order, generates the contacts. If half your orders arrive in four days and one in ten takes seven or more, a five-day promise breaks far more often than the team thinks. Pick the share you’re willing to deliver late, then promise the date that share implies. I’d start at 90% to 95% on time against the date shown, by region.
With the defaults, a five-day promise on a lane with a four-day median and a seven-day 90th percentile is kept about 70% of the time: roughly 3,000 broken promises a month on 10,000 orders. Hitting 95% would take a nine-day promise, or a tail short enough that one order in ten takes no more than about 4.8 days. Neither is comfortable. The template “3 to 5 business days” hides that choice; the tool puts it on the table.
Shipping price and free-shipping thresholds are covered in The First Offer. This chapter is only about the date.
This is one chapter of The Kept Promise, which is free and readable in full on a single page with no form in front of it.