Amazon has announced it will be offering a same day delivery service – an announcement which has online retailers looking on with some interest and not a little concern. The idea of sameday delivery is not new – it has been tried in the past with online retailers such as Barnes & Noble, using bike couriers to deliver orders in Manhattan. Same day delivery is not a obstacle for those etailers who are operating within a defined and distinct location which can be well-served by logistics, and even some humble pizza outlets offer same day, if not same hour service!
It is the scale of the service area which has taken many observers by surprise – the cities included in the initial trial are:
- Las Vegas
- New York
- Washington D.C
Chicago, Indianapolis and Phoenix are also thought to be coming onstream shortly too with the sameday delivery service provided the order is received before a set cut-off time (usually sometime before midday).
How do smaller etailers compete with such a move, and especially against an online giant such as Amazon?
Delivery is obviously a crucial factor in ensuring customer satisfaction, however sameday delivery has limited application for many and especially when it comes at a price. Free shipping is rarely next day delivery, and the Amazon service not only charges a fee but a premium too for those who are not already enrolled in Amazon’s $79 per year Prime delivery program. In addition there can be substantial issues associated with home delivery – not least the requirement to rely on a third party to get your goods from A to B and the loss of control over the customer care process that entails. API logistik
Sameday delivery caters for those customers looking for instant gratification, and if it is for a big ticket item, then the strategy may make sense. However, where the product is small in price or nature, then a buyer is more likely to go to the store and buy what they want there and then instead of relying on a home delivery service and going through an online ordering process. It will be interesting to see how this service pans out over the forthcoming year because it is something that could have major repercussions for everyone else selling products online.
A key finding of previous efforts to make the sameday delivery work, has been that there must be customer concentration within a defined geographical area. This is something smaller retailers have understood implicitly, take our pizza delivery boys as an example, but this is a great differentiator for retailers too. If you are a local retailer who already offers home delivery in your area, then combining this service with your online ecommerce site seems like a logical step. For purely online retailers who are also operating primarily in a defined location, then providing customer concentration is high enough, it is a service which can be considered to further differentiate your business from the competition.