Amazon’s size and market aggressiveness is certainly one of the forces that is “stirring the pot” on same-day delivery, but as the recent post on the “StorefrontBacktalk” blog states “of those Amazon shoppers who saw that [same-day] icon and then made the purchase, most of them ended up not using same-day delivery, opting instead for next-day”. Choice will be the real differentiator for consumers and retailers.
Certainly, there are big city markets where density can support same-day home delivery and products where immediacy is paramount to selling success – flowers and Asian restaurants have always fit this model. Now, there are many other retailers with products trying to compete in a similar way.
However, for many items, same-day delivery doesn’t make sense for the consumer and doesn’t give the retailer the opportunity to maximize its revenue. The products that typically fall into this category are fresh foods, and larger or more complex, products where the consumer has to “make room” for the new items or require installation/removal services. In the UK grocery home delivery market for example, which is one of the most mature in the world, consumers don’t buy today and expect delivery today. Instead, they plan on Tuesday for delivery of goods they need delivered on Thursday for the weekend. For retailers that want to sell specialized installation services or add-on products on top of a new TV or gas range, they need trained resources for their upsell opportunity. The last thing that retailer can afford is to use some local delivery guy who is immediately available, but not qualified to install a gas range, only to find out the next day that the consumer’s house went up in flames. I personally rejected over $500 worth of add-on products and services when an unnamed consumer electronics retailer had 2 incompetent driver/installers show up and screw up the installation.
Clearly, Amazon is helping to lead the home delivery revolution in the US and same day delivery is certainly today’s hype. But, what consumers really want is choice. What retailers need to do is to offer choice while not “losing their shirt” and have the opportunity to increase revenue through value-added services and premium delivery time offerings.