How Amart Holds Itself Accountable for Broken Promises: Inside Shippit's State of Shipping Report | #633

The gap between when you say the parcel will arrive and when it actually does is still the biggest unsolved loyalty problem in Australian retail. This is the episode that puts numbers on it.

This episode discusses Shippit’s State of Shipping Report 2026. Download your copy here.

Rob Hango-Zada co-founded Shippit in 2014 and has published the State of Shipping Report three years running. This year's edition is the biggest yet. David Bauer is GM Customer at Amart Furniture, one of Australia's largest furniture retailers with 65 stores, an ecommerce operation, and a weekly leadership review that tracks something they call "broken promises."

The conversation covers the 2026 report's most important findings, what they mean for retailers competing against an Amazon-trained consumer, and why the brands winning loyalty in this environment are doing the work no one wants to talk about.

Today, we're discussing:

• Why only 7% of retailers offer an accurate delivery estimate at checkout, and what it would take to close the gap [13:50]
• How Amart tracks broken promises as a top-line weekly leadership metric [18:24]
• The 2.2-day actual vs 5.2-day promised delivery gap, and why most retailers can't close it [22:23]
• "Your last best experience is your new expectation" and what that means for every retailer competing with Amazon [14:48]
• Why free returns are functionally dead, and what easy returns actually looks like in 2026 [42:08]
• The rattle surcharge, fuel costs, and why disruption is now the default operating environment [36:10]
• Why Amart is building a white-glove delivery tier and what that signals about where premium retail is heading [40:04]

Connect with David Bauer | Explore Amart Furniture | Connect with Rob Hango-Zada | Explore Shippit

Transcript

Cold Open: Buffers Hurt Sales

SPEAKER_01 0:01

It doesn't matter. All of the work that's gone into the point of delivering that product is just thrown out the window. Only about 7% of retailers actually offer an accurate delivery estimate at checkout. Every week in our leadership meeting, we have a graph with how we're doing on broken promises.

SPEAKER_00 0:19

I'm Dave Bauer from Amark. And I'm Rob from Ship It. And today on Ad To Cart, we're going to be unpacking the latest 2026 data shipping report with Nathan Bush.

SPEAKER_02 0:28

Rob Hangozada has been on this show more times than I can count, and he is welcome back anytime he comes on. There's not many people with that card. Joining him today is Dave Bauer, who is a first timer, but I've known Dave even longer than I've known Rob. We worked together at Super Retail Group years ago, back when I was getting kicked out of offices and into a shed with no windows, as Dave tells us about today, glamorous time in my life. Dave is now general manager for customer at Aymart Furniture. And that means he's responsible for brand, marketing, e-commerce, and the full customer experience across one of Australia's biggest furniture retailers. Every year, Rob and the Shibbit team put out the state of shipping report. And every year, there's something in it that changes how I think about delivery. The 2026 version, which has just dropped, has a finding that they call the promise gap. Australian retailers are on average promising 5.2 days a checkout. Actual delivery takes 2.2 days. That's a three-day buffer that is sitting there quietly killing conversion. And most retailers probably don't even know it's happening. But what makes this episode different is getting to hear the report's findings through Dave's eyes. His background is in CRM and customer loyalty, not necessarily in operations. So when he's talking about delivery, he's not talking about die fot. He's talking about broken promises. His team actually uses that term. Just quickly, before we get into today's very special exclusive episode, I want to thank Shipit for partnering with Ad Descartes throughout all of 2026. It's really great to have them as a source for all the shipping and fulfillment information that we bring to you. If you want to download the Shippit State of Shipping Report for 2026, as we were going through the episode, the link is in the show notes so you can follow along while we're having this conversation. And if you want the cheat sheet from this episode, head on over to addocart.com.au and sign up for the newsletter. We send a cheat sheet out on the day every episode is released. Now, here's General Manager for Customer David Bauer from AMAR Furniture and co-founder and CEO of Ship It, Rob Hangosada, to talk us through the 2026 Shipit State of Shipping report.

Meet Dave Bauer And Rob

SPEAKER_02 2:50

Dave and Rob, welcome to our Descartes. Thanks, Bushy. Thank you for having us. Rob, I'm going to stamp your loyalty stamp. Is this your third time now?

SPEAKER_00 2:59

Oh, look, I don't know. You tend to lose count of these things, Bushy. I'm not that special, am I? No. Fair, fair. Chuck it on the pile, really, yeah. Now, these are my favorite ones, though. These are my real favorite times of the year where we get to catch up and chew the fat.

SPEAKER_02 3:12

Yeah, it is good. It's my favorite shipping and fulfillment report that we're going to dive into. So I'm excited about that. But Dave, I am stoked to have you on the show because we worked together for years at We did indeed. Super retail group. So here we are having a chat in the pond.

SPEAKER_01 3:26

Yeah, what do they say? Like the cliche about longtime listener, first-time caller. That's that's me today, right? So well, she, I think we were working together since before Salesforce were doing the hoodies thing. That's true. That's true. Before we got we're on the trail. And it's actually, I was reflecting on it uh on this conversation and this topic as we were, you know, preparing and logistics and shipping and you know, movement of stock and e-com. I recall back at the uh the old super retail days, we're outgrowing our office space, right? And your team, we actually based you guys in a shed in the car park, right? I don't know if you remember this.

SPEAKER_02 3:57

I believe the term is you kicked us into the shed, but that was it, right?

SPEAKER_01 4:01

And there was no windows because you were you were talking about ceremonies and scrums and you know, all sorts of language that we didn't understand back in the uh And we were just the digital nerds on the computer.

SPEAKER_02 4:10

They don't need windows.

SPEAKER_01 4:11

100%, right? Yeah, you'd you'd come out and have a ceremony and we'd be like, what's going on in the shed? But the thing that was really interesting about that is the shed, you remember it was called the the Lindy Shed.

SPEAKER_02 4:20

That's right.

SPEAKER_01 4:21

And it was called the Lindy Shed because that's previously where we used to store the forklifts and the picking equipment that we used to use to get our orders out. So, mate, here we are, come the full circle.

SPEAKER_02 4:30

That's a great link. I like that, Dave. Well done on bringing that all together. I was like, where the hell are you going with this story? But you you pulled it in.

SPEAKER_01 4:37

Mate, we've known each other for a long time. That's a summary there.

SPEAKER_02 4:39

I know both of you individuals very well, but how do you guys know each other? Because there is a reason you're on this podcast, Dave. What's the connection?

SPEAKER_01 4:47

So look, Shipbird actually are a great partner of ours here at Amart, and basically what they do is help us with fulfillment of our online exclusive range. So we've got a quite a tight curated range of product, and the Shippit team are basically responsible for getting that to the customers. Awesome. Do you do that well, Rob?

SPEAKER_00 5:03

Oh look, we hear about it when we don't put it that way. But uh the fact that Dave's willing to join us on a call means we're we're doing an okay job.

SPEAKER_02 5:10

Yeah, absolutely. And Dave, big changes for Aymart recently in terms of the scope and the size of your operation. What impacts that is that having on you and the team?

SPEAKER_01 5:19

Well, I guess you know, the thing that's happened in recent times is that Freedom has become a part of the broader family. And in fact, last week we launched the Home Furniture Group, which is the holding company for both Aymart and Freedom. And they're a great brand. They, you know, genuinely great quality products, style-led. We love what they do, and they're a really great business to kind of have on our team now. So yeah, look at, you know, and in the future, there's likely to be some some back-end changes that are gonna make efficiencies and effectiveness improvements for both of us.

SPEAKER_02 5:48

We just had Paula on the show from Freedom. And uh, I think bringing her brains together with you and your team's brains, I'm like, oh, this is gonna be a force to be reckoned with. It's very exciting.

SPEAKER_01 5:57

Paula and also Jason Piggott in Freedom as well, great team. They do some really great stuff. And, you know, in fact, we've for a long time looked at the work that they do and think, gee, there's some some good stuff going on there. And, you know, it's gonna be good that we can start to share some of that. But ultimately, when it comes to facing a customer, we want our own unique identities. We need to be. So that will always remain. There will still be two brands. But yeah, like it's a really exciting time for us.

SPEAKER_02 6:19

And as GM of customer, you've got a pretty complex operation. You've got a huge amount of stores, you've got bulky goods, you've got click and collect. How do you think about that customer promise or meeting customer expectations when it comes to shipping and fulfillment? How much of

The Last 10 Meters Of Delivery

SPEAKER_02 6:35

a role does it play in that journey?

SPEAKER_01 6:36

So, yeah, we do have 65 stores. We've obviously got an e-commerce operation and we've also got our online exclusive range. And I guess the the way that I think about it is that if we've got a store team or, you know, a website experience that is best in class, and independently, we've been assessed as having you know great service. In fact, we're in 2025, we won the Canstar, you know, Best Customer Service Award. We've got trust pilot reviews that are really strong. So we've got that part of it right. Our voice of customer says that our experience in store and our pricing is all in line with what you would expect. So that's all really good. But just picture it where you've waited for a lounge to turn up because you've ordered a particular colour or something that was maybe bespoke to you, and a dirty old truck reverses down the driveway and runs over your mailbox, and then the, you know, the Didn't know what you were going to say, run over your something. Yeah, yeah, yeah. Or we let's go mailbox. That's that's a bit that's a bit more family friendly. And so, you know, then the guys jump out and put their muddy boots in your nice new carpet and you know, they damage the product. You can just imagine that it doesn't matter all of the work that's gone into the point of delivering that product, it's just thrown out the window because that last 10 meters has been the part that can either make or break the experience. And for what it's worth, that's absolutely not what Amart do. We're very much focused on the last mile, the last 10 meters, the last 30 meters, however you term it, absolutely critical to the customer experience. So that's why it's super important to us at Amart.

SPEAKER_02 7:54

That's awesome.

SPEAKER_01 7:54

My goodness. Sounds like we've just got it sorted. We should end it there. No one will find any cracks, any faults. I wish, I wish. Mate, there's always opportunities and there's plenty of work that we're doing. And, you know, it's great partners like Shipper that help us to be even better.

2026 Shipping Report Key Signals

SPEAKER_02 8:06

Brilliant. So, Rob, state of shipping report, what year are we up to now?

SPEAKER_00 8:10

I think this is the third year of the current incarnation of the report. This is something that we we invented in 2018. We ran it for a couple of years, and then a little thing called COVID happened in between, and I think everybody lost their shit and we're like looking at different things. And now we've had a chance to really uh, you know, deeply reflect on what is it about the report that sort of adds value to the lives of operators like Dave, who kind of need to be equipped with the level of insight that I guess the market has lacked for a little bit of time. And I I think this is probably our biggest report yet. I think it's had the most consumers surveyed, the most deliveries looked into, most carriers, you name it, it's bigger and better than ever. And uh now with a free set of stake knives as well, eh?

SPEAKER_02 8:48

It's it's really good because you're starting to get those benchmarks year on year. So how much things are changing every year and they're changing quickly in your world. What was the number one thing that surprised you out of this year's report?

SPEAKER_00 9:00

To be honest, I think you know, the amount of doom and gloom that we hear about in retail and everyone in retail is kind of scrambling to really rethink, transform. You got to deal with a more discerning consumer, you've got consumer confidence levels that are the lowest they've ever been, you've got record high interest rates, you've got all this uncertainty in the world, yet four in five retailers are anticipating growth in 26. And that for us was a bit of an eye-opener, which is absolutely unfortunate. Retailers are diluted. Well, no, they're they're glass half full, right? Like it's right. But it's, I think, to all the things that Dave talked about in terms of obsessing about the last 10 meters of a delivery and that purchase experience, it didn't even talk about a delivery, it's the last mile of the purchase experience. I think that's where everyone's gonna fixate. So we're we're pretty excited about that and the fact that retailers are switched on to that.

SPEAKER_02 9:49

And Dave, does that ring true for you? All those economic headwinds and macro factors, does it change your outlook on the opportunity that you were talking about before?

SPEAKER_01 9:58

No, not at all. I mean, the reality is that there's always gonna be a market. I mean, in in our category, there's always gonna be people that need replacement furniture. Our opportunity is to do it better than others that are out there trying to share the same market. So I don't think as retailers, we're deluded. I think this is where we do our best work. You know, this is this is now like you're a challenge to be better. And for us, that's awesome. We love that.

SPEAKER_02 10:17

I love it. And in terms of there has been a huge change in AMAT's positioning in market over the last few years. How

How AMart Competes In Furniture

SPEAKER_02 10:25

do you differentiate yourself from all the other furniture retailers out there right now?

SPEAKER_01 10:30

Yeah, it's a great question. So I mean, I I guess we've been around since the early 70s. And back then we were the home of furniture and bedding, and we had these massive superstores and it was cheap product, you know, the old adage about stack them high, watch them fly. That was what we were all about. And at the same time, we were low margin, moving volumes of this massive stock, right, around the country. And so that was that was never going to be a path to success. It was fit for the time, and we did really successfully for a very long time. But in recent times, it's been more about how do we position ourselves as the brand that has style, quality, and affordable furniture. And we still position ourselves as for everyday Australians. That's absolutely where we see our core target. And for us, it is about appreciating that style is important, that people do want to recreate the look that they've seen on the block or, you know, in a social feed or whatever it might be. So for us, yeah, stylish, good quality, affordable furniture for everyday Australians. That's how we position ourselves at AMAR.

SPEAKER_02 11:27

I think that's really interesting, isn't it? And that you're excelling so so much in that area because so often we're told that the middle ground in retail is a dangerous place to be. You've either got to be premium or you've got to be the cheapest. And you're proving out there that there is a place to service everyday Australians.

SPEAKER_01 11:44

Yeah, look, it can be a race to the bottom. And moving big items of furniture costs a lot. I mean, you've got to warehouse these things, you've got to move trucks around, you've got to, you know, have stores that are massive. So for us, yeah, we we know that customers now want something that's a better quality item. And of course, style led, that's always the thing that's front of mind for me that consumers make an emotional decision based on completing a look that they've seen rather than, you know, show me where the cheap lounges are. They want to create a, you know, something that they've seen and they really feel great in their home with it. So for us, yeah, it's style, quality, and affordability. I mean, we've always been known for that. But um, yeah, conquesting on those other two has been the most important thing for us in recent times.

SPEAKER_02 12:22

Yeah, cool. When you said stack them high, see them fly, you just gave me a mental image. I used to work at Big W when I was like going through school. And the coolest job was at the end of the day, they used to have behind the register this huge wall of, do you remember those kids' couches that were like fold out and they were like little tiny ones you could put in any lounge room and they'd fold out and two-year-olds can sleep on them. There used to be a huge wall, and the job was to replenish that at the end of the night. So you had to get the big ladder out and just have this huge wall of couches. I don't know what was so fun, but you just gave me a flashback to that.

SPEAKER_01 12:53

Mate, it's literally what we used to do in our stores as well. We used to sell these $99 futons, and you could have any colour you chose, and we literally stacked them from the floor to the ceiling. And mate, these things were terrible as a bed and terrible as a lounge, but they were 99 bucks. We sold a shitload of them. Can't beat it.

SPEAKER_02 13:09

Can't beat it, Dave. Doesn't matter when you're a university student getting home at 4 a.m. with a kebab, does it? Exactly.

SPEAKER_01 13:14

First home, moving out, that's exactly right. That's great.

SPEAKER_02 13:18

All right, let's get into the report. So, Dave, with that view of what was it, style, quality, and affordable. With that lens, when you got your special pre-release of the Ship It Report, was there any stat in there that jumped out at you that you needed to take notice of straight away?

SPEAKER_01 13:36

There's two actually. There's two that really stood out and resonated for me. So my team are charged with basically driving customers into store, but also then ensuring that we've got the full journey mapped out with the CRM side of it. So we want to drive loyalty. And so the one that really stood out first for me was that, you know, the impact on loyalty that a bad delivery can have on a customer. And that's the equivalent of what I talked about there with the mailbox being run over and the muddy boots on your new carpet. For us, loyalty absolutely comes from that last part of the journey that a customer has with your brand. And it doesn't matter whether it's, you know, a contractor or an external, it has to be the customer sees that as AMART. We have to make sure that part of the experience is every bit as good as everywhere that's gone before it. So that's the one that stood out for me most importantly.

Accuracy And The Amazon Effect

SPEAKER_01 14:20

The second one then is about the accuracy. So in our space, if you're waiting for a lounge, you know, you might have to move things out of the way. You've got to take the morning off work, you've got to make sure that your dog doesn't escape and all of those really fun things that you have to do. And so it's just not good enough to not be able to tell the customer when that's going to be landing in their home. An eight-hour window is not good enough. It needs to be really specific. You need to be able to tell the customer, here's where we're going to be at your house, here's what you need to do before we get there and be ready to go. So they're the two that stood out for me.

SPEAKER_02 14:50

Nice. Good picks. Rob, I know you're very passionate around the accuracy.

SPEAKER_00 14:53

Is it getting better? Look, the data is, but I think that the number of retailers that implement it, one of the surprising findings of the report was only about 7% of retailers actually offer an accurate delivery estimate at checkout. So unfortunately, it's you know what? Fortunately, it's a great opportunity for retailers looking to grow this year. I think, you know, it's it's a very difficult problem. You've got this concept of business days, and consumers don't think in business days anymore because they've been Amazon trained not to think about business days. Unfortunately, the rest of the industry hasn't caught up. Award wages, unionized workers, you know, these types of things. There's there's a few things to think about to bring it to life. But if we kind of strip it right back, the the big one is that delivery gap, which I'm sure we'll we'll sort of unpack or the delivery expectation setting gap. That's still an issue.

SPEAKER_02 15:41

It was really interesting in the report to see what was it, 52% of customers saying that Amazon's changed their expectations when it comes to delivery.

SPEAKER_00 15:49

Yeah, absolutely. I mean, look, my yardstick is just speaking to, you know, family and friends. And, you know, when your auntie uh, you know, is in her late 60s, is kind of, you know, comparing every retailer to her last experience. And, you know, she's she's now using DoorDash, she's using Amazon, you know, all these newer technologies. And I always say it, I think I say it every year, your last best experience is your new expectation. And I think, you know, it's people are spoiled for that instant gratification now and they don't care, you know, what your back end looks like or how complicated your logistics processes are. They expect to get whatever they order tomorrow. And there used to be a time, I think, where, you know, if it were jocks and socks or something that you didn't need tomorrow, you didn't really care. But what we're finding now is people care about no matter what they buy, if they can't get it by tomorrow, they're silently slipping away and going and buying it from where they can get it tomorrow. And I think ensuring that retailers know that they're competing against the Amazon-trained mindset of a consumer is very important for this new financial year that's about to encroach upon us in a month from now.

SPEAKER_02 16:52

Yeah, that's so true. Last night, my daughter Grace is she's obsessed with Michael Jackson at the moment, which throws up a whole bunch of conflicted feelings to start with. But she's gone down the path.

SPEAKER_01 17:05

There's some documentaries she shouldn't watch.

SPEAKER_02 17:06

Exactly, exactly. We've got to be very careful about the information she accesses. But she's convinced that she wanted the Michael Jackson best of record. And so we're on the couch last night, Sunday night, and she's like, Can you? I've finally saved up enough money to buy the record. Can you buy it for me? And I was like, Yeah, I can. So we went through the websites and we looked at Bondo Records, and I was trying to steer it towards Bondo Records because local business retailer, blah, blah, blah, blah, blah. And I said, Look, we can do it here. It's a good price. It's going to take between five and ten days, I think their delivery promise was. And she's like, I don't want to wait that long. And I'm like, Well, that's kind of what it is. And she's like, When will it be here? I'm like, I don't know. Like, but sometime in there. And I shouldn't have said this. I said, we can have a look on Amazon. And had a look on Amazon. It was on prime and it could be guaranteed to be here the next day. So it'll arrive today. And I was like, that's like five bucks more. And she's like, no, I I want that one for tomorrow. But then she had the nerve to say, Will it be here before I go to school tomorrow? And I was like, I don't know. And she's like, well, why don't you know that? Like they should tell you when it arrives tomorrow. So it's like, yes, our Amazon expectations are changing, but just as the generations come through, this will just be normal, right?

SPEAKER_00 18:24

Oh, totally. I think, you know, I have the same thing with my son. He's eight. And, you know, he'll pester me to buy something, and then I'll click buy. And literally an hour later he says, So um, like, is it is it coming now? Like, well, you gotta wait, mate. He goes, because we just did a baritz and that came like in half an hour. So, you know, it's coming now, right? I'm like, Well, it might be next week is but why? Yeah. So I think you know, it's a good thing they don't have spending power because we'd all be in trouble and hopefully we can catch up by the time they save up enough pocket money to keep buying.

SPEAKER_02 18:54

Yeah, exactly. Dave, talking about having that accurate delivery, obviously it's so important for furniture because you need to be home. You can't just leave it by the letterbox. How close have you got to being really accurate with your promises?

SPEAKER_01 19:08

I

“Broken Promises” As A Metric

SPEAKER_01 19:09

think once the goods are in the truck, we're pretty good. Where, you know, we've got various technologies that tell a customer that they're next in line. And I think we're reasonably good there. Where I don't think we're good, we're we are absolutely fixated with making sure that we commit to what we've told the customer we were going to do. And the language we use is a broken promise. And I guess to sort of share how serious we are about that, every week in our leadership meeting, we have a graph with how we're doing on broken promises. So the end-to-end experience from when a customer clicks to to when they landed in their living room, you know, that part of it, we're very much focused on ensuring that can be as good as a customer would reasonably expect it to be. I think we're okay in that last, the last bit when the the couch is in the truck and it's on the way to you and you're going to be next in line. I don't think we're too bad there, but I think we could be better in the steps prior to that. And I think there's some some awesome technology that we're working through at the moment to to enable it to be better again.

SPEAKER_02 20:00

What's the hardest part of getting a couch from that time and customer presses order to getting it onto the truck? Where are the biggest pain points?

SPEAKER_01 20:08

So we've got distribution centers around the country. And the challenge might be if you're in Sydney and you want a red one and we've got the red one in Brisbane, well, it's got to get from Brisbane to Sydney and then from there to, you know, a distribution hub to get out to the customer. So it's actually a little bit further back in the pipeline in getting the stock to the hub where it's going to then make the journey to the customer. And that's the part that becomes really challenging for us to communicate on a, you know, on a website, for example. You know, that's where we start building in buffers around delivery times. And it's not optimal, but it's unfortunately the way that we we have to play that because there will be a variation that you just happen to want that isn't available at your local, um, your local distribution center.

SPEAKER_02 20:48

That makes a lot of sense. I'm really interested on that broken promises metric from a leadership perspective. Is it across the business, not just fulfillment, that you're measuring broken promises?

SPEAKER_01 20:57

A broken promise is based on from a customer's date of purchase, be it online or be it in store, to when we're actually putting that on the truck to go and deliver that to their home. That's the window that we're talking about there. So that's basically the experience that happens after the sale. Because we've we've said to a customer, either online or in a store, you will have this in, I don't know, two weeks, whatever it might be. So there's a risk of losing a sale in that. So that's why it's super important for us. So yeah, broken promises, absolutely. We we avoid those as much as we can. I love that.

SPEAKER_02 21:27

It's a really good term because it's not just another metric. It's like not orders unfulfilled or orders outstanding, because it actually has some emotion and some meaning behind it. So it's a nice way of putting it.

SPEAKER_01 21:37

We've made a commitment and we, you know, as a business, we have to honor that. And as a customer, you expect a business to honor that. And so it's not good enough when you don't. Love it.

Why Retailers Overpromise Delivery Time

SPEAKER_02 21:46

Rob, I was fascinated to see in this report our window between our promises and our actual fulfillment times. We've still got a nice big gap there. 2.2 days is the average time for. Fulfillment, but we are still promising on average 5.2 days. Does that point towards that we are still being too conservative with our promises as retailers?

SPEAKER_00 22:11

Look, I think, you know, they've positioned it in a way it's so eloquent around, you know, how a business really upholds a promise and how important that is for the loyalty of a consumer. I think it's no mean feat, you know, and we've been really digging into this because we first saw the promise gap two years ago. And good news is that expectation has kind of come down. I think it was at 5.6 days, it's now at 5.2 days, is kind of what the average promise looks like. But the 2.2 days is how long it takes for a career. So once it's in the network, it's how long it takes the career to deliver it to a doorstep. So, you know, if you were to tell me 10 years ago that the average delivery only takes two business days to get to your doorstep, I would have said you're dreaming. But that's an amazing reality of the world we operate in right now. The problem is, and it's not a small problem either, like the challenge for a retailer in thinking about, okay, do I have a live view of where my inventory is today? Am I running 24 by seven shifts in a warehouse? Or if I'm fulfilling from store, do I have capacity in every store location to ship from those locations? You know, and then trying to meld all of that together with some type of semblance of SLA adherence, when you really think about the store-based environment, you're going to prioritize the customer that walks to the store versus fulfilling an order from a store location. All those things go into this big melting pot called the fulfillment promise. And that fulfillment promise often gets breached. It's easier to hold a courier to account because you know when it went into the network and when it got to the customer's home, but it's a lot harder to hold store staff to account. And I think what we're kind of seeing is there's two big levers which retailers need to pull. And some of them are doing it very, very well. And others are kind of falling a little bit behind because there's this big old chestnut of investment that needs to be cracked. And there aren't many operators in this climate that are willing to put their heads out there to really put the right investments in. So what I mean by that is a lot of retailers that we work with, many of them know exactly where the inventory is ahead of a purchase being made. But there's a whole cohort of retailers that only know where an item is going to be fulfilled from after a purchase is made. Okay. And if you think about that challenge, that kind of speaks volumes as to why there is such a gap in terms of what you can promise at a checkout. You can reliably say, well, the moment it enters the network, I know it's going to get to you by this day, but I don't know where in my network the item's going to come from. And I don't know if I can invest in those big system transformations in order to get you that clarity. So I'm just going to close my eyes to it and try to give you a five to six business day range rather than a five to ten.

SPEAKER_02 24:46

So are you talking from a big system perspective? Are you talking inventory management systems there or warehouse management systems? What are we talking about here?

SPEAKER_00 24:53

ERPs, the whole lot? The answer is always it depends, but frankly, it is the orchestration technology. So whether it's an order management system, whether it's the ERP, whether it's just orchestration sequencing and kind of being able to look at that, but sometimes it's not even the systems. Sometimes it's the culture of the business and how able the store staff are to serve the mission of the online team. I think that's been a really big disconnect we've kind of observed over the last 10 years.

SPEAKER_02 25:19

Yeah, I love that. Dave, from your perspective, where have you seen the biggest breakthroughs in being able to make sure that the amount of times you're talking about broken promises is declining? Where are you getting your biggest wins? Is it from the systems? Is it from the culture? Is it from changing expectations?

SPEAKER_01 25:34

I think it's a little bit of each, actually. If you're talking about the culture, much like I think Paula spoke about, the stores, their PL includes basically online transactions as well. So there's an incentive there for them to fulfill that because we appreciate that a customer might have been in the store and they might just be using the website as a uh you know point of sale. So there's firstly trying to break down that part of the barrier that you might have. The other thing is technology. I mean, we've been able to ensure that we do have good stock, like our inventory feed is genuinely good. For us, it's going to be a little bit different to someone that's selling thousands of units per hour. You know, we're not selling small widgets, we're selling large furniture items, which are, you know, potentially thousands and thousands of dollars. So making sure that, you know, we've got the stock in the right places is very important for us. You know, the inventory management systems that we use, the way that we provide the feeds to our website and all of the moving parts that happen there. So there's, yeah, there's a cultural piece, but also there's technology that we've got to support that as well. Just so we we do make sure that we can do that first part of the journey that Rob spoke about as quick as customer would expect it to be.

SPEAKER_02 26:37

How's

Delivery Data And AI As Leverage

SPEAKER_02 26:38

this for a start? Most retailers deliver three days faster than they advertise at checkout. However, 38% of shoppers are saying an accurate delivery estimate makes them more likely to buy. So that promised gap could be costing you conversions. But it is fixable, and it is just one finding in Shippet's state of shipping report. From AI and Amazon to fuel prices and delivery costs, this report is your blueprint for retail growth in 2026. It is my go-to report every year for delivery and fulfillment. You can download your copy with the link in our show notes. And obviously the technology is important, but the technology is only as good as the data that's behind it or stored in it. One of the surprising findings that I found in there was that two-thirds of retailers were still rarely or never using their delivery data. That blows my mind. Rob, I found this one hard to believe. Have you got any more context on it? Because I feel that would be a treasure trove that most retailers would be doing purely from a profit perspective, let alone a customer management perspective.

SPEAKER_00 27:50

Yeah, look, it is interesting. It's it's been largely the same. And through a lot of anecdotal conversations with retailers, I think, you know, when you think about delivery data, it really comes in the form of the invoice you get from a carrier and the meetings you have with a carrier about your DIFOT adherence. Right?

SPEAKER_02 28:07

And it's the carrier market for those wondering what that acronym that you just threw out there, delivery in full on time. Perfect. Perfect. There you go. Still got it, pushy. Still got it.

SPEAKER_00 28:18

Tell me whenever you need someone on the team, Rob. I'm here, I'm waiting. I think you can use ChatGPT these days, man. I don't know. It's uh it's tough. But the funny thing is, you know, I think like, I don't know, we've kind of, if you've been in the industry a good 20 years, you kind of resign yourself to the fact that the carriers are the carriers and you can kind of manage them on a quarterly or a monthly basis. If there's a Spotify that comes up, you just give them a call and you say, hey Joe, what's going on over here? Can you work with the reps in that area? Can you sort that out? But I think what we're finding is the new generation of operators are really hungry for real-time data or insight. And it's not just the data and insight, because as we know, like in a world where you can plug a data feed into your LLM, you can get that to start making decisions for you and starting to orchestrate for you. So I think we'll actually see a bit of a leapfrog moment here. So it's probably a good thing that been laggards, you know, in sort of looking at delivery data. But part of it is has largely been because it's hard to access. I mean, who's giving you a live data feed as to where your deliveries are at any point in time? Dave talked about having great technology at his disposal. Not a lot of businesses do. So I think that there's big investments required in order to get visibility of the data and insight, then there's even bigger investments to be able to do something with that. But yeah, it's it's a big one.

SPEAKER_02 29:30

I mean, you framed it very nicely here. And I like that you're keeping us upbeat and you're keeping us optimistic. But in the report you called it the Kodak moment for many retailers.

SPEAKER_00 29:39

Yeah. Well, that's the thing. I talk about that sort of two-speed. So you've got the new generation of operators that are don't know any different. I mean, I'm not sure how many boardrooms are sitting there obsessing over the promise gap, you know, and broken promises to a customer. We've got some retailers looking at the difference between a first-time delivery rating versus the average cost to lifetime value, where you factor delivery as a cost to lifetime value of the customer instead of a cost per transaction and you're looking at a margin per order. I think, you know, that's the Kodak moment is there in sort of proof with how delivery is treated. And Amazon has proven, and I think people get sick and tired of hearing about it, but Amazon has proven time and again that investment in the last mile drives repeat visitation and purchase from consumers because they've fallen into a habit. They are Amazon trained and they know what they're gonna get when they're gonna get it. And I think that's the only remaining lever for loyalty that we have, apart from range curation. You know, I think that's that's it. And if range and price become the commodity, then what becomes the differentiator?

SPEAKER_02 30:42

Dave, how does that conversation pair up with what you're hearing or seeing within the walls of AMart? I'm interested to know if you're using that delivery and fulfillment data to be able to find those direct correlations between customer loyalty and next purchase.

SPEAKER_01 30:58

We're not that sophisticated yet. We're absolutely on a journey. I mean, we're currently going through a total transformation of LIT stack and using Salesforce Core, then, you know, the plugins that sit on top of that, including Headless Commerce and, you know, our in-store POS and all of those pieces that are going to make that far more visible for us and actually then able to be weaponized and turned into some sort of a loyalty creation piece. But we're not there now. I mean, the closest we get is that we get voice of customer feedback and we say, gee, we're doing a poor job in this particular area. So let's go and have a conversation with the courier or, you know, understand a little bit more about what might be going wrong. But I mean, that's the new frontier and one that's really exciting, but we're not there yet.

SPEAKER_02 31:36

And we've done our fair share of transformations, including some together at Super Retail Group. One of the pieces in this report was talking about AI has jumped from 15 to 35% as retailers' top investment priority in the next 12 months, which I don't think is a surprise to anyone. Nice to have some numbers behind it. As you're doing your transformation today, in terms of that IT tech stack, is AI leading that or is it kind of an add-on and something you've got to consider in the process?

SPEAKER_01 32:04

I think almost every tech provider has some form of AI, whether it's machine learning or true sort of LLM stuff. So it is a consideration. I mean, the way that we're considering it in our business is that we've got all of this data. How do you make meaningful sense of it? And then how do you predict what that might become and then what do you do with it? So, you know, all of our divisions across the organization are being challenged. How do we actually harness that? How do we use our data more effectively? We've got this adage about being better, simpler, and cheaper. And so all of our strategic initiatives that we pursue have to fit into one of those buckets. And for us, I mean, that's really where some of this tech can help us to be better, simpler, and cheaper. You really like three-word mottos, don't you? Mate, I'm all about it. I'm a marketer at heart. So, you know, simple things. I love it. I love it. Even I can understand it. Well done. When you go, I've got these four points, you always forget the fourth. So three's three is easy to. Easy to talk to. That's right.

SPEAKER_02 32:57

I agree. There's a lesson for everyone.

Rising Costs, Fuel, And Surcharges

SPEAKER_02 32:59

All right. I want to talk about cheaper because obviously one of the things that has changed, we've got this thing called a fuel surcharge that's hit us this year. Thank you, Mr. Donald Trump. So that's changed the game or the outlook and the calculations for many people on both the retailer side and the carrier side. I think both are grappling with it and trying to find a nice way of doing it. Rob, the report said that standard delivery now costs $11.30 on average, which is up a dollar on last year. Is it the obvious that's driving that increase? And do you think that there's any sign of that easing? Like, how are we going to predict what delivery will cost in another 12 months? Like your crystal ball, Bushy.

SPEAKER_00 33:37

I don't know. It's anybody's guess. I think I was speaking to an operator the other day and he's like, can we just have a normal year? Yeah. It felt like there's been like a bunch of shit to deal with every single year since 2020. And we just want a smooth year, just to smooth out your comparable sales growth. You can just figure stuff out. You've got a stable cost base, and we can just operate like normal. I actually think this is the normal. It's, you know, in the old days we used to call it the VUCA world, volatile, uncertain four-letter acronym. But, you know, it's that uncertainty, you know, you think about what's in a delivery cost. You've got fuel, you've got labor, and then you've got the cluster that is the natural environment, which is getting a lot worse before it gets any better, unfortunately. We see a lot more natural disasters, a lot more, you know, kind of when you think about it, the Strait of Hormuz, you know, largely didn't impact Australia as much as it could impact some other economies. Didn't even know what it was. Exactly. And then we found out, right? There's this thing that like stuff passes through. And when stuff stops passing through there, fuel goes up. So there's this interconnectivity of systems. And although we saw this happen when China got shut down through COVID and what that did to the nature of moving product around the world and the cost of product and raw goods, raw materials, yet all these systems are quite interconnected. And any bit of uncertainty that happens, particularly as organizations become a lot more lean in terms of how they operate, they're not immune to this disruption. And disruption equals cost, cost equals inflation, and inflation equals bad things. So we're just seeing that come to light in delivery. Fuel surcharge was part of it, but the increase in cost of labor, real estate, all those sorts of things are really compounding this. And then I think there are some carriers that are being very creative with how they pass certain costs on. I mean, you know, there's surcharges which go into the mix as well. And, you know, there are certain surcharges for things that are glass and things that have liquid in the glass. And then if the glass tends to rattle in the box, then there's a rattle surcharge. And is there seriously a rattle surcharge?

SPEAKER_02 35:44

There is a rattle surcharge. Do they have to shake the box to sense the rattle? Because that will then break the product.

SPEAKER_00 35:50

If she be rattling, there is a surcharge. So this is what happens in in an industry which is running on razor thin margins and there's a look for cost recovery, we call it shaping freight. So if you don't want certain freight in your network that is costly for you to move through your network, you'll still do it, but you'll charge for the privilege. And for us, I think we're getting to this point of unsustainability because the customer doesn't want to pay for it. And I think I've said this probably a few too many times on this podcast, Pushy, but it's delivery is the one thing that everybody needs to go really right, but nobody wants to pay for. Yeah. And that's the conundrum we find ourselves in, particularly when the cost of delivery starts ratcheting up 10% a year.

SPEAKER_02 36:32

Yeah. For the first time, I saw on a retail's website last week, I think it was Seed and Sprouts website, they had the surcharge, a $2 surcharge on their product pages. So they literally had the price, the delivery cost, and then they said, we've now got a temporary $2 surcharge on all orders because of the fuel surcharge. So being really transparent, which I give them a lot of credit for, but that's hard to swallow for a consumer. I can imagine what that's doing for their conversion rate. Because, like you said, no one likes paying for shipping. And then to put that up front. Do you feel that the couriers, you said that they're being very creative, and I get that you've got to be Switzerland in your business model, but do you feel like they're being creative to help protect their own margins or to help retailers be more efficient?

SPEAKER_00 37:16

Look, I think it is all about margin preservation. No matter what business you're running, it is all about extracting greater margin from your operations. That's the mandate. That's the current age of efficiency that we live in. And I think it's the same reason why a lot of, you know, different providers have increased the price of goods, groceries are going up, just everybody is trying to cover their margin.

One Delivery Price And White Glove

SPEAKER_00 37:37

I think the interesting part is when you start looking at breaking down the different types of delivery speeds, you actually find that the gap between different methods of delivery is starting to diminish. So actually, express and same-day delivery, what we saw in the report this year is same day, because it's had so much volume starting to go through that as a channel or as a delivery method, the cost of same-day delivery has come down to almost the same level of express delivery. And in time, the cost of standard delivery will be almost on par with the cost of express delivery. So, really, this is a density-driven game. As we look at e-commerce penetration continuing to go up, we should see the speed of delivery compress and the cost of delivery start to become sort of one and the same. So the future of delivery in my mind is not, you know, three different methods at three different price points. It's one delivery method at one price point. And then potentially there's an economy method, which is the Timu style of delivery, which is you'll get it whenever we bloody well think we should. And that is something that just waits in the background until a truck picks up enough mess to drop it on your doorstep. But really, we're seeing this compression of delivery services and cost kind of meeting in a center point.

SPEAKER_02 38:44

How does that fit for you, Dave, as you're planning for? Because obviously you don't have the luxury of being able to choose from a massive pool of couriers or delivery partners given the type of product. How do you keep everyone competitive on rates to make sure you're giving customer great experience?

SPEAKER_01 39:00

Yeah, look, I mean, we we've of course got um pressures on our costs as well. So we we need to recover those. And that means that in recent times, some of our delivery fees have gone up. They have to. In terms of then how do we mitigate that moving forward? You know, the solutions might be around different price points for different types of products, right? It today costs you the same as, you know, to get a coffee table to your home as it does maybe a whole household of furniture. So do you do some sort of a tiering based on the cubes, the weights? You know, that's kind of one area for exploration. But also for us, we're now looking at things like our premium range of product, our signature range, for example, doing white glove services, whereby we bring it into your home, put it in the room, set it up, take all the garbage away, and then, you know, leave you with a really great experience. So that's the sort of thing that we're starting to consider. Is there a more premium tier rather than just going with the the maybe the you know the basic kind of economy level? Maybe there's an option for a uh second tier for us.

SPEAKER_02 39:55

And is that kind of tying into what Rob was saying around no one likes paying for fulfillment, but if you can actually turn it into a service to be useful and helpful, people will actually pay for it?

SPEAKER_01 40:05

Absolutely. Look, the reality is, I mean, we wouldn't make any money on the the cost of it. The experience that we get to deliver to a customer is going to foster loyalty for the future. The opportunity is to actually create a better experience, which is going to result in a hopefully a customer for life.

SPEAKER_02 40:20

All right. Well, we've unpacked a lot. Are there any report findings that I've missed that you think we should have been talking about that we want to bring to the people?

SPEAKER_00 40:27

Oh, look,

Returns: Easy Beats Free

SPEAKER_00 40:28

there's probably one, Bushy, which is that the dirty R word, I don't know if we want to talk about it, returns. Oh. Thought of a few other R words, but not that one. I'm glad your mind went there. But look, you know, I think it's kind of like, I don't know, it's the poor cousin of the delivery experience, but it's the one thing that retailers, you know, we talk about margin preservation. Returns is the one thing that can completely undo your unit economics, right? Because the item that's been purchased now out of circulation, you can't sell it, you've got to sort of bring in the inventory again. The moment somebody does choose to return it, you've got to think about, okay, is this in merchantable quality that I can put back on show? Or do I have to now scrap it and then wear the cost of it and all this sort of stuff and the rig roll around it? I think when we first did the report in 2018, one in two retailers had free returns. Now it was 19% last year, it's 11% this year. So it's just not a thing anymore, is it? Not a thing, which is probably a good thing because it's buyer beware. You've got to make sure you're making the right purchase decision for you. But we've seen a massive increase in the number of retailers offering easy returns. So reducing the friction to generate a return is important, but recovering cost on that return is also crucially important for a retailer. And that balancing act is interesting. So we've seen more practices of retailers kind of offering, you know, 10% increase in store credits to kind of incentivize rather than a refund, get an instant credit or run an instant exchange. But the ease of being able to submit a return is something that we're seeing a lot of retailers lean into, but definitely a withdrawal of free returns. So if you're still offering free returns, turn that off right now. What does easy returns look like? Like what's the typical easy return? Do you remember the days where you would jump onto the website, you'd look for their return policy at the footer, you'd click on that, you'd go down and say email customer service to return your product, you punch in an email, two days later, somebody sends you back a PDF that you've got to print out and you don't have a printer, and you're going to fill that in. And then you've got to go down to the post office and pay for shipping. Yeah, that is not easy. Oh, I thought you were about to say that is easy. I'm like, Jesus, Rob. Come on, mate. Yeah, anything worth its weight, you know, is worth the work. But it's, yeah, easy returns is hey, here's the thing. I need to return it. So long as it meets the criteria that the retailer has agreed upon, away you go. Return label spits out. You can either drop it off at a post office and they can print the label out for you. You can take it back to a store. It doesn't matter where you bought it, there's no channel conflict. You know, all those sorts of things play into an easy return.

SPEAKER_02 43:00

That makes sense. Dave, do you have many people uh taking their couch into the post office to return it?

SPEAKER_01 43:04

Mate, we do not want people to return our products. The reality is if we've got to go out to a customer's home, pick it up, bring it back to a warehouse, then we've got something that we've got to do something with. Absolutely no, we we try to avoid that one, of course. So we try and get it right the first time.

SPEAKER_02 43:19

And so obviously there's a big difference between returns, which are change of mind returns and faulty goods or damaged goods under ACCC, you've obviously got to do that for free and do that. Do you offer any change of mind returns at all?

SPEAKER_01 43:33

Uh look, I mean, absolutely compliant with the ACL, but typically when you've bought a an item of furniture, you pay a deposit on the spot, and then we call you and say, look, it's here, it's ready to go. You know, we've got a few steps that will hopefully get you to a point of making a decision before it's in your home, but there's there's always going to be, you know, exceptions to that. So it's not it's the worst part of you know, in our in our industry, moving things back to our warehouse, it's incredibly difficult. It's a one way door. Get out of here. Yeah, we do with the best. We can to uh make sure our customers get the right things the first time around because we avoid that second part. Sell great products.

SPEAKER_02 44:06

Exactly. Exactly.

Final Takeaways And Next Steps

SPEAKER_02 44:08

All right, we're gonna wrap up there because the report is available to download for free. And we're gonna put the link in the show notes here for anyone to go in and download that. Rob, I'm not gonna ask you to memorize the URL for the download link.

SPEAKER_00 44:21

Better than asking you to describe the QR code, so that's alright.

SPEAKER_02 44:25

But I want to leave it with both of you. After reading this report, what is one thing that you're thinking about, Dave, moving forward into the next 12 months when it comes to how fulfillment and delivery and that the broken promises, which I love how you describe there, how can you use that to enhance the customer experience? What do you think the biggest win is for you in the next 12 months?

SPEAKER_01 44:46

I think the data piece and obviously understanding the areas where we can be better, that's absolutely a big focus for us. But secondly, I think it's the communication to the customer, making sure that they know when something's going to arrive, they know to be prepared, they've got a really good sort of close window about when that will be at their doorstep. That for me, the customer communication piece, we can always do that better. And I think the data will help us to do that better too.

SPEAKER_02 45:07

I love it. Rob, apart from turn off free free returns, what advice are you giving retailers here based on the data?

SPEAKER_00 45:15

Look, we were fortunate enough this year to have Sarah Mullen from Adore Beauty pen out forward. I think she put it so well. It's the retailers that will make any ground this year are the ones doing the unglamorous work. It's the unsexy off stuff, right? Cleaner data, better returns, the perfilment that holds its peak. I think the retailers that get that right will see a bump up in those that are offering accurate delivery estimates at checkout, and they're the ones that are ultimately gonna win the loyalty of a customer. So it's the unsexy stuff. No more uh glamorous digital transformations, just important ones that change the fundamentals.

SPEAKER_02 45:47

Boring. Hey, logistics is sexy, but it is so true though, and I think that even you know, we talked a lot about how the data has changed and the expectations of the consumer has changed a lot. But that message has pretty much been the same over the last three years is like get that backhand system and the operations and the culture right because it is the unsexy stuff that actually flows onto the customer in the end. So, Dave, Rob, thank you so much for joining me. Pleasure to have both of you on with me at the one time. That was great fun. If you haven't got it already, go download the report. There's lots of great stuff in there, and like you said, Rob, some great stories and commentary in there from other retailers as well. We'll do it again next year. Absolutely. Let's do it. Same time, same place. Sounds great.

SPEAKER_01 46:31

Thanks, Bushy. Thanks, Bushy.

SPEAKER_02 46:32

Thanks, Dave. Thanks, Rob. That was fascinating because we've often talked about the state of shipping report for normal consumer goods, but to have Dave's lens over the top of it from an AMARC perspective that isn't just doing standard shipping, that has a pretty complicated setup in terms of multiple stores, bulky items, multiple warehouses, was fascinating to see how complicated it can get, but how he still has a really simple view of the link between getting it right and having a brilliant customer experience and having loyal customers and think about it from a long-term perspective. So I love that perspective. There are three things that I want to leave you with from this episode to think about for your business. Number one, that promise gap. This is a free conversion lever that most retailers aren't pulling on. On average, Australian retailers tell customers at checkout to expect delivery in 5.2 days. It actually takes 2.2 days by the time it gets into a courier's truck. Now that gap isn't there because performance is poor. It's there because retailers are buffering their promise to avoid letting their customers down or looking bad. But 68% of consumers say an accurate delivery date is essential or very important before they buy. Closing that gap doesn't cost money, it just means using the data that's already sitting in your carrier network, using that beta. Only 7% of retailers are using that data, which means that opportunity is wide open for those who want to attack it. Number two, broken promises. I love when Dave brought this up. It's a better delivery metric than anything that I've come across for a while. Especially that DIFOT acronym keeps getting thrown around. Dave Bauer's team at AMART tracks every time they commit to a delivery date and miss it. Not as a logistics statistic, but as a promise they made to a customer and they didn't keep. They review it in their leadership meeting every single week. The reframe is what I love about the whole thing. When you call it a broken promise instead of an unfulfilled order, everyone in the room understands why it matters. Lastly, the retailers who will win this year are doing the unglamorous work. That was the line that stuck with me from the end of the conversation. Cleaner data, returns that are easy, even if they're no longer free, fulfillment that holds a peak, no big transformation announcements, just the boring backend work that actually flows through to the customer experience. Rob, to be fair to him, has been saying the same version of this for three years on the show, and the data just keeps on backing him up. A big thank you to Shippet for bringing us this very special episode and for bringing us this data every year, which is always my go-to when it comes to the state of shipping and fulfillment in Australia. You can download your copy of that in the show links below. If you've got something from this one, please do subscribe or leave us a review. And if you want to continue the discussion on all things fulfillment, head on over to the community at adducart.com.au and nerd out. Get deep into shipping. Ask about others' fulfillment times. Get nerdy on it all over in the Ad Dicart community. There's over 700 e commerce operators in there. Until next time, I'll see you on Ad Descartes.