Add Local Delivery Service to Drive More Online Sales

This article is from Shopify, and was republished and shared through Elksourcing with the permission of Shopify.
Original link:https://www.shopify.com/blog/local-delivery

According to our consumer trends data, more than half of North American buyers say the pandemic has changed the way they’ll shop going forward.

One breakout trend is increased support for small and local businesses, with more than half of consumers specifically seeking out local, independently owned businesses. Nearly a third of buyers say they’ve bought something online and had it delivered locally during the first three months of the pandemic. Local delivery is a great way to connect with nearby customers, drive sales, and provide a great customer experience.

You may be wondering how to set up local delivery or if local delivery is right for your business. Below, we’ll take you through the ins and outs and how to get started with your own local delivery service.

Table of Contents

What does local delivery mean?
How local delivery can help your business
Figure out your local delivery logistics
Boost sales with local delivery on Shopify

What does local delivery mean?

In ecommerce, local delivery allows customers to buy your products online and have you deliver them straight to their doorstep. Local delivery serves as an alternative to both shipping with a carrier and in-store shopping. It has been particularly impactful for merchants and customers alike in a world where shipping carriers are experiencing increased delays and in-store shopping still carries risk.

How local delivery can help your business

With local delivery, businesses can offer thoughtful shopping experiences for their local customers and help generate sales and revenue. Here are some of the ways delivering locally with Shopify can help businesses connect with customers nearby and carve a place for themselves within their community.

The Local Delivery feature within Shopify is a set of flexible tools that allow businesses to offer a customizable local delivery service at checkout. Business owners can define delivery zones and multiple pricing conditions for each zone, manage and prepare orders for delivery, and create optimized delivery routes for drivers.

Build a connection with the local community

Making it easier for customers to shop locally is a great way to differentiate your brand, attract new customers, and drive sales. It’s also a powerful way to continue to connect with your existing loyal local customers. Not to mention, adding local delivery service can help you attract new customers to your community.

It’s been long said that building a loyal customer following is the best way to foster sustained growth. And we’re living in a time where people are feeling the effects of physical distancing during the pandemic and want community more than ever.

Improve the customer experience

Shipping delays are a natural part of the gig, especially during a pandemic. Shipping costs can also be unpredictable and are a common reason why many customers abandon their shopping carts.

Delivering orders directly to local customers is a way around delays and shipping costs. By delivering the product themselves, merchants can better control the process without relying on shipping carriers—especially with delivery times impacted by the pandemic. And while there are still associated costs to consider, merchants can manage those costs instead of being tied to carriers, who often have peak surcharges during the holiday period.

Increase sales

Data from Shopify shows that online shoppers spend 23% more and have a 25% higher cart size when convenient ordering options like local pickup and local delivery are offered by independent retailers. Furthermore, online shoppers that chose local pickup or local delivery during checkout had a 13% and 19% higher conversion rate than shoppers who selected shipping at checkout. You can also increase your average order value by charging for your local delivery service. With Shopify Local Delivery, you have the flexibility to create multiple delivery zones with multiple pricing conditions for each zone.

On a local scale, not only are customers actively looking to support their local businesses to help sustain their communities and economy. They’re also interested in local shipping options because it offers enticing advantages.

First, for online retailers the unfortunate reality caused by the pandemic is shipping delays—and customers want to avoid it. Local delivery can offer price and delivery speed advantages over shipping.

Second, local delivery offers a way to create a personalized brand experience. Customers who shop locally are looking for that personal experience and because you can’t provide that in-store, local delivery is a way to provide it. You can leverage this to connect with existing customers and attract new customers. For example, you can include a personalized packaging insert and thank them for their purchase or a personalized message in the delivery notification.

Future-proof your business

While local delivery adoption may have been expedited due to COVID-19, the effects on consumer behavior will last well beyond the pandemic. The trend for supporting local business is not slowing down and consumers will continue to expect simple, convenient, and low-cost ways to get their online purchases. Consumer behavior has always evolved, and it will continue to do so. Merchants who step up to the plate, anticipate shopper needs, and offer innovative ways to shop will set themselves up for future opportunities.

Can’t get out and deliver? Offer local or curbside pickup at checkout. Pickup availability complements the local pickup option at checkout by letting shoppers know whether each item they’re browsing is in stock and available for pickup at a nearby location.

Figure out your local delivery logistics

While setting up a local delivery option at checkout is simple, we’ve put together a list of logistical considerations to help you determine the best path for your business.

Where will you deliver from?

Some online store owners also operate brick-and-mortar locations, while others have no storefront and rely on an online-only operation. You’ll need to consider which of your stores will offer local delivery and if you will have enough staff to deliver from multiple locations.

In some cases, especially if you’re doing it yourself, merchants offer local delivery from a single location. But if you have staff members who will be helping out, you might have the bandwidth to deliver to customers who live closer to other locations.

How far will you travel to deliver orders?

Once you know where you’re delivering from, it’s time to figure out where you’re delivering to. You can be very specific about which areas you do and do not deliver to. Define multiple delivery zones and use a list of zip/postal codes to determine how far you’ll travel to deliver orders. Or simply set a radius around each location to identify your delivery areas, but keep in mind this gives you less jurisdiction over specific areas and neighborhoods.

The larger your radius, the more customers who are eligible for local delivery. This could lead to more sales but also means you might need more help with delivery. If you have a few staff members who can deliver, setting a larger delivery area may be ideal. If you’re doing deliveries yourself, you might want to set a smaller area. Either way, start small and adjust as needed.

What will you charge for local delivery?

Amazon Prime was the first to make free shipping the norm, and now 21% of small to medium-sized online businesses always offer free shipping in the US. This has conditioned consumers to expect free shipping, and these expectations often extend to local delivery services too.

But it’s not always feasible to offer free delivery, since you may need to cover related costs, like gas or extra delivery staff. There are two key factors to consider here: your delivery price and your minimum cart value.

You can choose to offer only local delivery for orders above a certain value, which also directly increases average order value (AOV). This strategy works well if you offer local delivery for free or at a low cost. Chris’s Ice Cream, for example, has a minimum $30 order to qualify for free local delivery.

If you don’t want to introduce a cart value minimum, you can also set a fixed local delivery price for all orders within your delivery zone. For example, you can set a lower price for deliveries within a shorter distance and a higher price for deliveries within a longer distance. To make this delivery option attractive to your customers, price local delivery services lower than shipping through a carrier. This cost should be based on a combination of the time it takes you to deliver and how far you’re traveling to deliver orders. The larger your delivery area, the more you may want to charge for local delivery.

It’s easy to set up local delivery in your Shopify store. You can create both local delivery rates and “pick up in store” rates to differentiate between the two options.

When will you deliver orders?

One of the benefits of local delivery is customers can receive their orders more quickly. But this depends on how often you plan to go out on delivery.

If you’re delivering locally and can’t do it every day or as orders come in, define specific delivery days or times. Make sure you communicate this with your customers before, during, and after their purchase.

Some options to consider are same-day delivery, next-day delivery, or two-to-three-day delivery. Anything longer may not make sense for the local delivery shopper. The faster you can get products into your customers’ hands, the more you can charge for this service. You might also want to consider setting up your delivery schedule based on neighborhood, especially if serving a large geographic area.

How will you deliver orders?

There are lots of ways to deliver orders, and it will mostly depend on your location and delivery zone. While motor vehicles may be the first method that comes to mind, you can also fulfill local delivery orders by bike or on foot, which could be faster in some areas, depending on traffic.

If you’re short-staffed or interested in using third-party services, you could sign up for apps like Postmates. These can come in handy when you’re experiencing high volumes or want to get in front of new potential customers. This also takes the actual delivery process off your plate, which makes it easier to execute. However, it comes with extra fees.

Who will deliver your orders?

Again, you can deliver the orders yourself, use existing or newly hired staff, or take advantage of third-party local delivery services—or a combination of any of the three. Whoever the delivery driver may be, it’s important to remember they’re a part of the customer experience. So even if they don’t work for you, they are still an extension of your brand.

Communication is critical. Customers want to be kept aware of when their purchases will arrive. To that end, delivery staff should alert (via text or email) the buyer when they’re on the way and, if possible, provide an estimated time of delivery. Equally important is sending customers a delivery confirmation along with a photo of the product at the delivery location. When using in-house team members to deliver orders, it’s easier to control these interactions. That’s why many of the apps offer tracking options, so customers can see exactly where their order is.

You’ll also need to consider what happens if the customer isn’t available at the time of drop off. Sometimes, it’s as simple as leaving the package outside the front door or in the mailbox. Other times, that’s not possible. Be sure to ask the customer for a phone number, and ensure drivers have it handy so they can contact the customer under these circumstances. It’s also a good idea to ask the customer for delivery instructions at checkout. That way, they can let you know whether it’s OK to leave the order at the door.

In the case of Great Lakes Brewery, customers need to show photo identification to prove they’re of legal drinking age before they can receive their order.

No matter how hard you try, there will be mishaps. Maybe the customer gets the wrong product or it’s damaged when they open the box. You can take a picture of the package at the customer’s door to protect yourself and confirm delivery, but that’s not 100% foolproof. Have a backup plan in place and be prepared to offer replacement products. Be generous in your return policy in these cases and offer free shipping or returns pickup if possible—as well as free delivery for any replacement items.

Hopefully mishaps are isolated incidents, but make note. If you notice a pattern—lots of theft in a certain area, damaged products when delivered by a third-party carrier, etc.—there could be cause for further investigation.

How will you promote local delivery to nearby customers?

First and foremost, you’ll want to put local delivery information on your website. At launch, you might use a pop-up, banner, or marquee to share information with your customers. It’s also a good idea to put it on your shipping policy and checkout pages. Run free shipping campaigns or flash sales and combine the local delivery message to drive awareness and conversions.

There are ways to promote your local delivery options on your website too:

Social media. Post to your organic channels about local delivery, and complement that with paid ads targeting the area where you’re offering the service.
Email marketing. Segment your list and let local customers know about the new option. Consider incentivizing with a coupon code for their first local delivery order.
Search engine marketing. Chances are, customers in your area are searching for “local delivery near me.” Optimize for local SEO to show up in Google search results.
Retargeted ads. Send campaigns to past and current customers or site visitors. Let them know that local delivery is new and they can take advantage of it today.

There are also traditional tactics that don’t necessarily require digital marketing. Merchants can use their understanding of the local community and events to get involved and market to the local customer base. Post flyers in community hot spots and consider collaborating with other local businesses.

How does local delivery work with your other shipping strategies?

While local delivery is great for nearby customers, you don’t want to isolate customers who reside outside your local delivery zone. Carrier shipping services can supplement and even handle some of your local delivery needs for you.

Options like curbside pickup can be helpful for local customers in particular. If customers outside of your local delivery radius want online orders fast and expedited shipping isn’t an option or is too expensive, you can offer curbside pickup as an alternative.

White Rock Soap Gallery has five Texas-based retail stores, along with a significant ecommerce side of the business. It offers local delivery from its retail locations in addition to curbside, shipping, and other options.

Curbside pickup can work even if you don’t have a physical storefront of your own. Turn your warehouse into a pickup location, launch a pop-up local pickup spot, or partner with another local business to leverage their space. Local delivery doesn’t have to compete with other shipping strategies—it can support them.

Boost sales with local delivery on Shopify

Giving customers the choice of how and when to receive their orders removes barriers to completing the purchase, which in turn boosts your bottom line. It also gives you a chance to plug into a community, driving customer loyalty.

When it comes to adding local delivery as an option to your online store, you have to figure out the logistics in a way that serves your business goals now and is sustainable to take your business into the future.

With Shopify Local Delivery, you can set up shop and serve a local base of loyal customers while continuing to promote your online sales to a wider audience.

Illustration by Cornelia Li