.svg)
E-commerce deliveries have long been treated as a cost center. But for Scott Anderson, COO of Chewy, these touchpoints are considered a core part of the customer experience, and a measurable driver of loyalty, retention, and lifetime value.
This may sound like a “nice to have,” but it's not. The data is clear: better delivery experiences directly correlate to higher NPS, stronger engagement, and increased LTV.
Anderson has spent the last four years at Chewy and a decade prior at Amazon, where he held roles ranging from frontline operations to leading North American transportation. His experience makes one thing clear: the bar for meeting customer expectations is always rising. “E-commerce is always changing. Our customers are getting ever more demanding, and there’s nothing we can do about it. It’s just going to be that way forever.”
That reality creates a new kind of pressure for brands. One where perfection is expected, but never fully achievable. Anderson explains:
“If you achieve 99% to plan, you fail. 100% to plan? Well, you sandbagged your plan — and you failed. Welcome to Ops!”
In this environment, perfection isn’t the goal, but it is the baseline expectation. The real challenge is figuring out how to consistently deliver against it.
Anderson recently joined us at The Veho Delivery Summit to share how he is thinking about delivery — and why the brands that win will be the ones that treat it as part of the product, not just the process. Here’s what we learned.
E-commerce Is a Commodity. Experience Is the Differentiator.
In today’s crowded market, nearly every part of e-commerce has been commoditized — from the products themselves to how they’re priced and fulfilled. What’s left to differentiate is the experience, particularly what happens after the purchase.
Customer service, fulfillment, and delivery are often optimized for efficiency rather than experience — creating a gap between what brands promise and what customers actually receive.
So where can brands actually differentiate? Anderson breaks it down into four core pillars.
The Four Pillars of E-commerce — and Where Brands Win
Anderson frames differentiation across four core pillars: price, selection, convenience, and experience. While these may appear to be equal levers, in practice they’re not. Two are largely dictated by scale, while the other two represent the most meaningful opportunities for most brands.
Price
Price is the first place customers look, but it’s also the hardest to win. Anderson explains, “Unless you’re willing to drop a pallet in the middle of your store and say, ‘go get it,’ you’re not going to win on price. Walmart will beat you.” Most brands can stay competitive here, but very few can lead.
Selection
Selection follows a similar pattern. “When you have 350 fulfillment centers and 65 million SKUs, like Amazon, no other retailer even comes close,” says Anderson. Rather than competing on breadth, the opportunity is in curation — helping customers find the right products, without forcing them to sift through thousands of nearly identical options.
Convenience
Convenience is often mistaken for speed, but customers care more about relevance than raw velocity. “If you have a subscription item and it shows up two weeks in advance, do you care? Yes,” shares Anderson. True convenience means aligning delivery with customer expectations, whether that’s precise timing, flexibility, or reliability. For brands, this is a clear opportunity: designing delivery experiences around specific use cases (like subscriptions, urgent needs, or bulk orders) instead of applying a one-size-fits-all promise.
Experience
Experience is where brands have the most control — and the most opportunity to stand out. It spans every touchpoint from the storefront to customer support to delivery, but what matters most is consistency across those moments. “It starts with understanding your customer better than anyone else, because this is really what matters in e-commerce,” suggests Anderson. In practice, that means anticipating friction before it happens, ensuring deliveries arrive where customers expect them, when they expect them, and in a condition that reinforces the quality of the product itself.
For most brands, the takeaway is clear: you won’t win by trying to out-scale the largest players. The gap is simply too large. Instead, differentiation comes from investing in convenience and experience — the parts of the journey customers actually feel.
Why Delivery Breaks the E-commerce Experience
Delivery is where even the strongest e-commerce experiences are put to the test — and often fall short.
The challenge isn’t just getting a package from point A to point B. It’s recreating the kind of experience customers expect in a physical store. The kind where someone knows your preferences, understands your needs, and gets it right every time.
That’s easy to picture in person. It’s much harder to execute at scale.
As Anderson explains, the goal for Chewy is to replicate the feeling of a neighborhood pet store. Imagine the kind of store where the owner knows your pet’s name, remembers what you bought last time, and makes thoughtful recommendations. That level of personalization and consistency is difficult to translate into a digital, operationally complex environment.
So what happens instead is a breakdown between intention and execution.
Anderson shares a simple, but telling, example:
“We have an employee in rural Florida — we somehow always deliver his kitty litter to the side street. Then it rains, it floods, and the box gets soaked. We send a replacement, and the same thing happens again the next month. If we can’t get it right, his wife is going to stop shopping with us and go back to the store.”
The product is correct. The order is fulfilled. But the experience fails.
And when that happens repeatedly, you lose the customer for good.
This is the core challenge of e-commerce delivery. Brands can design a thoughtful storefront and a seamless checkout experience, but if the final interaction doesn’t meet expectations, the entire experience breaks.
Closing the gap between what a brand promises and what a customer actually experiences is what makes last-mile delivery so difficult to get right.
How Leading Brands Win on Experience
At the highest level, winning on experience comes down to consistency across every customer touchpoint. As Anderson explains, it’s about delivering a cohesive, emotionally resonant experience at every step of the journey:
“It’s how I ‘wow’ the customer every time. With pets, it's easy. It's an emotive category. 90% of households think of pets as family. Consumers behave irrationally — and that's both good and bad."
Anderson frames it simply: build the experience first, then optimize for cost.
“I like to use a software analogy: build the feature and build the entitlement first, then optimize. You can always remove the cost. It is really hard to build a foundational experience and then try to bolt things on later. Build the product you want, then trust your operators to find the cost efficiencies.”
That shift requires reframing how decisions are made internally, moving from cost justification to customer impact.
Here are Anderson’s suggestions for how to build a company culture where experience wins.
Build a Strong Business Case
To shift internal conversations, experience needs to be tied directly to business impact. That starts by grounding decisions in real customer use cases, not just averages.
“You can say, ‘I identified all these use cases. This is the cost construct, but this is the unlock it gives me,’” says Anderson. If a brand can’t meet a critical need, like getting food to a customer immediately, “the customer is gone. They’re going to go to the local shop. And if that experience is better than what I can get from a storefront or delivery, I lose the customer.”
Framing delivery this way shifts the conversation from cost to retention. “Using that as a way to convey the strategy to merch and marketing leaders has been really powerful,” he adds. But ultimately, it comes back to culture: “You have to drive that from the ground up as ‘we’re going to be customer-first.’”
Match Reality With The Most Important Expectations
Not all delivery improvements drive meaningful impact. The key is understanding what customers actually value and optimizing for that.
“We were surprised that moving a 10% improvement in two- or three-day delivery speed had almost no conversion improvement,” says Anderson. What mattered far more was accuracy. “A single percentage point in degradation on delivery estimate accuracy had a massive impact. It's those types of trade-offs that allow us to really quantify customer expectations.”
“Chasing delivery speed in aggregate is a really bad idea. For Chewy, chasing accuracy and convenience is what really matters.”
Find What Your Metrics Miss
Traditional metrics often capture only the most visible issues, missing the broader impact on customer behavior.
“You’re missing somewhere between 2 – 10x of the customers that don’t call and quietly quit from those defects,” says Anderson. That makes it difficult to rely on standard operational metrics alone.
Instead, teams need to look cross-functionally and ask a different question: What is the true impact of this issue? Because, as Anderson puts it, “it’s never what we report. It’s always a multiple, because of silent churn.”
Don’t Default to Cost
Even with the right insights, the pull toward cost optimization is constant, and often misleading.
“It is so easy to measure cost. It is very hard to measure the erosion of customer experience,” says Anderson. Cost is immediate and visible, while experience shows up later — often after the customer is already gone.
“Cost is such a tangible metric, and customer experience is so trailing,” he explains. But while cost can always be optimized, lost customers are much harder to recover. “You can figure out how to pull out the cost. It is really hard to retain and go back and get customers that you’ve burned.”
Last-Mile Delivery KPIs and What to Measure
If you don’t default to measuring cost, what should you measure? According to Anderson, the answer is: a lot. But more importantly, the right metrics go beyond surface-level performance to uncover what’s actually driving customer experience and long-term value.
Damage Rate
Damage is an obvious signal of an issue, but the metric itself is just the starting point. “I look at the damage rate. Why is this damage occurring? And then what are the non-tangibles that we’re not tracking that would help me solve this?” says Anderson.
At Chewy, that meant digging into root causes and customer impact, not just tracking incidents. “It started with identifying that we have damage. What’s driving the damage? Canned wet food. What’s driving the biggest customer impact? Prescription diet wet food, because there’s no replacement.” From there, the team mapped the problem end-to-end — from SKUs to packaging to cost. “What’s the best solution? Do we build a box around it? I don’t love the cost, but let's solve the customer problem first. Then we’ll figure out how to pull the cost out.”
This reframes damage as an experience problem, not just an operational one.
Delivery Accuracy
Speed gets the headlines, but accuracy drives retention. “On subscriptions, people just want to make sure it’s there on time,” says Anderson. “If it’s late, that’s a huge problem. If it’s early, that’s also a problem, but not nearly as much.”
For essential goods, like prescription pet food, the stakes are even higher. “When you’re talking about core consumables — especially prescription food — the customer can’t replace it. A three- or four-day delay means the pet is without food, and they will quit us instantly.”
When Chewy connected delivery accuracy to business outcomes, the impact was clear: “When we compared these accuracy metrics to actual LTV, we saw a huge unlock.”
Concession Rate
Concessions are often treated as a cost metric, but they can mask a much bigger problem. “The typical shrinkage and loss from a concessions perspective for fresh and frozen food was 10%. One out of 10 fresh food deliveries was considered an acceptable fail rate — that’s insane,” says Anderson.
That level of failure is unacceptable. “If I was a customer and one out of every 10 deliveries failed, would I keep shopping there? No.”
Looking at concessions through the lens of churn — not just refunds — reveals their true impact.
Customer Service Responsiveness
Customer service is often viewed as a support function, but, for Anderson, it’s a core part of the delivery experience. He explains:
“It starts with world-class customer experience. If you call Chewy today, you’ll have a human pick up the phone within 10 seconds. It’s one of the number one metrics we track.”
Notably, the focus isn’t on efficiency — it’s on effectiveness.
“We don’t give our support team a time requirement. We don’t talk about how long they’re on the phone. We just empower them to talk to the customer.” That matters most in moments of friction when customers are confused or frustrated. “When a customer has a late delivery, they’re pissed—they want to know exactly where it is,” Anderson says. “Sometimes they just don’t know how to navigate a delivery manager, or they don’t realize the package is at the side of the house.”
In those moments, human support becomes part of the product experience — not just a resolution channel.
Exceptional Delivery Experience in Practice
What does it look like to treat delivery as part of the product experience? For Anderson, it often means solving for the customer even when the solution falls outside traditional logistics.
Anderson shares an example of an elderly customer who lives near the top of a Manhattan apartment building and regularly receives 40-pound bags of kitty litter. Normally, her son comes by once a week to carry it upstairs, but one week he couldn’t make it, leaving her unable to access both her litter and her pet food. When she called customer service for help, the agent didn’t just process a replacement or escalate the issue. They found a way to solve the actual problem.
“The customer service agent ordered a pizza from the place down the street, had the delivery driver come over, gave them an additional tip to carry the kitty litter upstairs and then said, ‘Keep the pizza,’” Anderson explains. “She’s a lifelong customer now.”
The point isn’t just the creativity of the solution — it’s what it represents. Experiences like this build loyalty in a way that traditional service metrics can’t capture, and they highlight what becomes possible when teams are empowered to prioritize outcomes over efficiency.
As Anderson puts it, “If we empower our agents — even if we’re paying 20 or 30x what an AI or chatbot would — the long-term value of that customer is going to be so sticky, so retention-proof.”
And in that context, delivery becomes a natural extension of the overall experience.
Transform Delivery Into a Loyalty Driver
E-commerce may have become a commodity, but the experience around it hasn’t. As Anderson’s perspective makes clear, the brands that win aren’t the ones trying to out-scale the biggest players. They’re the ones investing in the moments that actually shape how customers feel.
Delivery sits at the center of that experience. It’s where expectations are tested, where operational decisions become visible, and where loyalty is either earned or lost. And while it’s often treated as a cost center, the reality is that it has a direct impact on retention, lifetime value, and long-term growth.
What sets great delivery experiences apart isn’t just the technology or the network — it’s the mindset. A willingness to design for the customer first, solve the real problem, and trust that the business impact will follow.
If you’re looking to rethink your own delivery strategy, Anderson’s full session dives deeper into how these ideas come to life in practice. Download the full recording here.
