The four Ps of marketing — that’s product, place, price and promotion — was coined in 1960 by Jerome McCarthy.
You might be thinking, this seems a little distant from the e-commerce era. However, the difference between retail marketing six decades ago and today is not that those four Ps are no longer relevant, it’s that we’ve got to learn to apply them to our new situation.
We’re selling products more dynamically than ever, through new channels and to new audiences, so how can we apply these classic principles to today’s marketing?
Well, one of the most important and often overlooked dimensions of a marketing mix is e-commerce delivery. It’s definitely not sexy, and typically isn’t the domain of the marketing masses, but it’s a huge focus for most retailers today.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
Applying Jerome McCarthy’s four Ps to the marketing of delivery can support retailers to increase checkout conversion, grow average basket size and strengthen customer loyalty.
This might sound a bit confusing, but consider ‘delivery’ as a ‘product’ in itself.
What delivery products do you offer? There are a range of possible options, including standard delivery, click and collect, pick-up from a third-party location, pick-up from a locker, same-day and next day, the list goes on.
Metapack consumer research found 50% of shoppers claimed to have abandoned online shopping carts because the delivery choices on offer were unsatisfactory or did not meet their needs. Yes, 50%!
And as many as 60% of these consumers opted to buy from another retailer that did offer delivery choices that met their needs.
Now, I’m the first to take ‘consumer insight’ surveys like this with a pinch of salt, but these are pretty amazing numbers when you think about it.
Half of the people who have already decided they want something and who have pressed that wonderful ‘checkout’ button on your website will leave your site if you don’t have the right delivery options, and most of those shoppers will head straight to your competitors.
To avoid that, you’ll want to make sure your delivery product range is both wide and well-supported. That means you have a lot of choices so that customers can find the right choice for their situation.
You also need to make sure that internally your business understands the importance of this ‘product’. Making delivery a priority and devoting time and resource to it will help prevent them abandoning their baskets at your checkout.
Home delivery has traditionally been the default option for e-commerce deliveries, and delivery hours typically fall during times when customers are anywhere but at home. Parcel theft or “porch piracy” has been rising in recent years as thieves take advantage of the parcels left on doorsteps while consumers aren’t at home.
Workplace deliveries aren’t a silver bullet to these problems either. Couriers Please research found 29% of Australian employers don’t allow personal deliveries at work, as costs mount from managing overcrowded mailrooms, inundated with employees’ online purchases.
Retailers with a physical store footprint hold a golden ticket when it comes to marketing the importance of ‘place’ in delivery.
Our research showed 46% of Australian consumers chose to click and collect an e-commerce order in the last 12 months — a dramatic rise from 30% in 2018. Yet only 42% of Australian retailers currently offer a click and collect delivery option.
Given that 30% of customers who choose to click and collect make an additional in-store purchase as part of the collection, retailers who choose not to offer click and collect are leaving millions of dollars of revenue on the table every year.
For any retailer selling online, third-party pick-up options can provide additional customer convenience without the overheads of an owned store network. The Australia Post ‘Collect and Return’ network offers this service to Australia Post merchant customers (both multi-channel and pureplay retailers) to provide consumers with the option to pick up (and return) their online shopping from supermarkets, pharmacies, department stores and service stations.
Delivery pricing is arguably one of the biggest factors influencing checkout conversion, and Australian consumers love free delivery.
Last year, 65% of total orders delivered had free shipping, and 60% of Australians will abandon a shopping cart if the shipping cost is higher than expected.
Of course, the consumer benefits of free delivery, such as increased conversion rate are compelling, but it’s not free for the merchant. How can retailers mitigate the added cost of offering a free shipping option?
While the economics on blanket free-shipping policies rarely stack up, this doesn’t mean that retailers shouldn’t offer any free shipping options.
Free in-store click and collect, as mentioned previously, is a cost-effective way to offer a free delivery option while also driving customers back into your store to make additional purchases.
Minimum basket sizes can be effective in diluting the margin impact of free delivery over more purchases.
Finally, free delivery as a loyalty reward acknowledges your most valuable customers with free delivery perks and incentivises greater lifetime value.
Ah, the final P. This is where delivery as a marketing tool comes into its own and where retail marketers typically underestimate the impact of marketing delivery.
Investing in product, place and pricing of delivery will yield limited results if not promoted to consumers. Data analysed by Sparro found consumers who access a shipping or delivery page convert to buy at 2.67 times the rate of users who don’t.
Promoting delivery options (read: products) on your homepage, product pages and clearly on checkout will effectively drive results.
Support this by highlighting free delivery options or discounted pricing and how customers can qualify, across the aforementioned touchpoints.
Reduce the innate risk of e-commerce where consumers have to buy an item they may never have physically seen by promoting delivery and return options in broader marketing campaigns and across marketing channels.
Remind customers that they don’t always have to use home delivery — alternative places can save them having to stay at home all day.
Lastly, provide customers with easy to find delivery and return info on your website. Don’t hide it away.
Marketing that delivers
It’s unlikely Jerome McCarthy could have envisaged the challenges that retail marketers would face in 2020, or quite how much of an impact e-commerce would have on how consumers are marketed to. Yet, his four Ps still provide modern marketers with the tools to influence a consumer’s decision to purchase.
The key to modern retail marketer’s success is using these same principles to market delivery and influence consumers’ e-commerce purchasing decisions.