- Many ecommerce sites now offer same day delivery
- Why is this important?
- How can you make it work for you?
More and more sites are now offering same-day delivery, with Amazon and Argos two of the best-known examples.
But what is the psychological principle behind this innovation, and how can you make it work for you?
To find out, let’s play a little game. What would you rather receive in each of the following scenarios:
- (a) £990 immediately OR
(b) £1000 in a week’s time?
- (a) £950 immediately OR
(b) £1000 in a week’s time?
The logical answer, of course, is to pick (b) in both cases. Unless you have some pressing debt that absolutely must be paid in the new few days, it makes no logical sense to give up £10 just to get the money a week earlier, much less £50.
Logic v Emotion
But most people aren’t coolly logical, and instead make most of their decisions largely on the basis of their emotions. That is, to use a metaphor popularised by the Nobel-Prize-Winning economist Daniel Kahneman in his bestselling book Thinking, Fast and Slow1, they tend to use their System 1, rather than their System 2. System 2 (the “Slow” system of the book’s title) is the calculating, rational part of the brain which says “Of course it’s better to wait a week for that extra tenner”. System 1 (the “Fast” system) is the emotional part which screams “I want it NOW”. And which side do you think wins?
System 1 of course. When participants are offered choices such as the first one above in psychology experiments, they overwhelmingly go for the “I want it NOW” option. Take a minute to think through the implications of this finding for e-commerce. The average person is prepared to pay £10 (at least on a transaction of this size) to get what they want immediately, as opposed to waiting a week. And, even though this again makes little logical sense, the more they are spending anyway, the more they are prepared to pay for premium shipping.
Unsurprisingly, children are even more susceptible to this phenomenon (which psychologists call delay discounting2). In the original study of this type3 (recently reprised for a Haribo advert) two-thirds of children were unable to resist the temptation to eat a marshmallow, even though they could earn a second marshmallow by waiting just 15 minutes.
The lesson from these studies is simple: If it’s possible to offer a same-day delivery option – even at considerable expense to the customer – you should do so. But there’s more. People vary dramatically in their susceptibility to this effect, with a sizeable minority picking the “get it NOW” option in scenarios such as the one above, even at a cost of £50 or more. If your analytics can identify these impatient types (for example by their clicking behaviour), the site can respond accordingly, for example, by highlighting or defaulting to the quickest delivery option.
So, if you are not already putting the psychological principle of delay discounting into practice on your sites, get cracking! Unlike in the famous marshmallow test, this is one scenario where you will gain absolutely nothing by waiting.