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Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

Amazon’s Same-Day Delivery Will Shake Up Retail

The title of this post is the headline of an article posted at Ecommerce Times on Jan 17, 2013.  Here’s a link.

The article points out the very convenient solution Amazon can provide in some high-density markets for customers who are willing to pay for the convenience of not having to actually go to a store themselves for something they need today.

The author then proceeds to describe some of the warehouse systems, which Amazon uses to facilitate their same-day delivery service, including a reference to Kiva Systems.  Kiva Systems provides robots for use in the Pick & Pack process of direct-to-customer fulfillment centers.  It’s a great systems … I met with the founder when he was looking for both initial funding and early clients (back in 2003 or so).

But we need to keep this “same day delivery” thing in some context.

According to data from the Department of Commerce, under the category of Retail Sales, Mail Order and Ecommerce Sales still amounts to only seven percent of total retail sales … yes, 7%.

Now, that’s still a significant number.  And for some retailers, it may even account for a major percentage of their annual profit.

Please take note that in most direct commerce research, “free shipping” remains among the most effective promotions.

But given that same day delivery will only appeal to the more affluent, for whom delivery cost is not as significant as convenience, and given that all direct commerce accounts for only 7% of total retail sales … it’s somewhat of a stretch to say that same day delivery will “shake up” retail.

A bit too much hyperbole, for me

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Filed under: Direct Commerce, Ideas, Opinion, , , , , , , ,

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