Home delivery is more challenging than ever for retailers, as a survey from consulting firm AlixPartners shows that consumers now expect free delivery in under three days, 52% will boycott a retailer after just 1–2 botched deliveries, and 64% of executives say home delivery is not yet profitable.
Those numbers show that home delivery has become the decisive battleground for customer loyalty, yet the economics of fulfillment continue to deteriorate for most retailers. The figures come from 14th annual Home Delivery Survey of U.S. consumers and supply chain executives.
According to the firm, the most striking finding in this year’s survey is the accelerating compression of consumer delivery expectations. Free shipping is now a near-universal demand. 94% of consumers say free shipping impacts their purchase decisions, with nearly 70% saying it has a ‘great impact.’ Two in three shoppers abandon their cart entirely when shipping fees exceed approximately $10, and more than 25% expect $0 shipping as a baseline.
Yet at the same time, speed expectations have tightened in parallel. Consumers now expect free delivery in an average of 2.7 days — down from 3.5+ days in prior years — with expectations varying sharply by category, from 0.9 days for grocery and food to 3.2 days for large general merchandise. More than 20% of demand is estimated to be at risk when these timing expectations are not met.
“The speed and free shipping expectations consumers hold today were once reserved for Amazon Prime members. They are now the floor — not the ceiling — for every category of retail,” said Marc Iampieri, Global Co-Leader of Logistics & Transportation and Partner & Managing Director at AlixPartners. “Retailers who treat home delivery as a cost line to minimize, rather than a customer experience to invest in, are quietly surrendering loyalty they may never recover.”
Additional results show that the delivery imperative comes at a painful financial cost to retailers. According to the executive survey:
- 83% of retailers report home delivery costs increased year-over-year (2025-2026)
- 64% say home delivery is not accretive to profitability, compared with in-store transactions
- 56% require a minimum order value for free shipping — half raised that threshold in the past year
- 22% now require both a minimum order AND paid membership to unlock free shipping
In response, retailers are taking a second look at their last-mile service providers. For the first time in the survey’s history, reliability has displaced price as the primary criterion for selecting a lead carrier, researchers found.
The UPS-FedEx duopoly is meaningfully eroding: 55% of retailers now use carriers outside of UPS, FedEx, and USPS, and more than a third have actively shifted volume away from traditional incumbents in the past year. FedEx has overtaken UPS as the most-cited primary carrier, used by 38% of retailers, compared with UPS’s 35% peak in 2023.
On the consumer side, Amazon leads all carriers in overall delivery preference — topping rankings for timeliness and condition of delivery — while USPS ranks lowest for both timeliness satisfaction and technology investment alignment. Notably, 84% of consumers say their past delivery experiences, including which carrier is used and whether the driver is a gig worker, directly influence where they choose to shop.
“Carrier diversification used to be a cost play. It is now a resilience and brand play,” said Chris Considine, Partner in AlixPartners’ Retail practice. “The retailers gaining ground are those who have built multi-carrier architectures that let them route around service failures in real time — and who understand that for their premium customers, the carrier badge on the box is part of the product.”
