The pandemic has led to more online shopping, but high delivery and return fees are a problem for shoppers. For sellers, finding innovative solutions to the high cost of shipping is particularly challenging, making physical stores increasingly important as a complement to online channels.

Insights for What’s Ahead

• More than half of respondents to The Conference Board Q1 2023 Multicultural Consumer Survey expect Americans to buy even more online over the next five years. This means issues related to shipping fees and processing returns will grow.
• Delivery and return fees are becoming an issue for shoppers, causing some to cut back on online orders or switch to in-store pick-up. Consumers aged 35 and younger—among the segments that have increased their online shopping the most since the pandemic—are some of the most likely to want to save on delivery fees.
• The high costs of handling online returns are challenging retailers to minimize returns using innovative methods. Improved sizing guides, more accurate pictures and videos, and encouraging more due diligence before ordering by checking item details and customer reviews are among the actions retailers are taking while exploring low-cost return options, including physical drop-off points to cut logistics costs.
• Marketing communications emphasizing the time savings and convenience of online shopping could help increase convenience-oriented shoppers’ willingness to pay for items and delivery.
• Retailers with online and physical stores can leverage their channel-specific strengths while seeking cross-channel integration and learnings for an improved customer experience.