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

More on “Same Day Delivery”

Late yesterday, Internet Retailer published a story under the headline:  Price beats speed for online shoppers.  In general, the article sites research on the web site features which are most important to what they buy online.

But the article highlights that for 53% of respondents, price is most important, and they use whatever shipping is the lowest cost or free.

Now there is another 47% for whom shipping cost is less significant.

But I hope it’s becoming clearer to all, that same day delivery is a very limited market.  Limited to the affluent & lazy + the urgent.

Most online buyers do not request “overnight delivery.”  Overnight deliveries probably average 3-5%, at most.  I’ve not seen recent data on that question.  So “same-day delivery” is likely a subset of the overnight number.

It may make a theme for a marketing campaign … and it may even be a profitable segment (because people who want same-day delivery are less price sensitive) … but it’s not a big segment.

Filed under: Direct Commerce, News, Opinion, , , , ,

More on Same Day Delivery

Anyone engaged in ecommerce operations is probably following the trade press reports on same-day-delivery.

It’s a gee-whiz offer, but does it increase sales?  Is it profitable?  Is it cost-effective?

For some merchants, it makes all kinds of sense.  In fact, for some, such as florists, it’s almost a requirement.  It makes sense even for office supply stores, and some high-end merchants — Macy’s, Nordstrom and similar companies.

All of these companies have inventory widely dispersed and can take advantage of local courier services or even, as in the case of most florists, have their own existing delivery infrastructure.

But what about everyone else?

Here’s an interesting story from StorefrontBacktalk.com, reporting on Amazon’s recent experience.  It reports that Amazon saw a conversion increase of 20-25% when they offered same-day-delivery,  but few of customers actually asked for same-day-delivery.

Demonstrating a great point:  Marketing is one-thing, but what customers actually want, need or use may be another.

Now, you just have to figure out where you fit on this new paradigm.

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

Testing Same Day Delivery

The Wall Street Journal reported, today, on eBay and Amazon testing same-day delivery in a couple of major markets.  Here’s a link to the story.

In the San Francisco area, eBay has hired a crew of people, essentially, concierge shoppers, who will locate the product you want at a local store, buy and deliver it to you within one hour of the time you place the order.  Wow, quite a high level of customer service.

Don’t expect this to be a viable service in Yuma, Arizona.

I’m not sure it would be viable even in all of the top ten markets in the US.  But it will be very interesting to watch it.

Based upon the anecdotes of the article, we can imagine this service being used by customers in major markets (where there may be sufficient aggregated demand for such a service) for whom convenience carries a very high value and who is less price sensitive than average.

I think that’s a pretty limited market … but the beauty of the web / ecommerce, is, in part, it’s ability to aggregate demand in ways we’ve never been able to do under earlier retail models.

The economics of same-day delivery are very difficult to make work.

We’ll know same-day delivery has worked when FedEx, UPS and the USPS begin to offer the service.  But don’t hold your breath!

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

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