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    Wednesday
    Mar042015

    Petco Joins with Instacart For Same-Day Delivery

    Petco has made a move toward boosting its online retail and service options to its customers. Partnering with Instacart, the pet store company is looking for a return from implementing same-day delivery for its pet food items.

    Instacart has recently announced its partnership deal with Petco to deliver pet food items via same-day delivery. It is a $2 billion valuation for the service and it will be launched in two participating pilot cities: San Francisco and Boston. San Francisco is the hometown of Instacart and also has been the major testing spot for a number of retailers, including Google and eBay. Amazon rolled out AmazonFresh, its' own same-day grocery delivery service in its' hometown Seattle and later tested same-day delivery of products in San Francisco as well.

    Petco will mark Instacart's first non-grocery partner for same-day delivery. Instacart's CEO Apoorva Mehta, told The Wall Street Journal earlier this month, “Groceries are more than sufficient for us, but why stop there?”. Indeed, for any delivery company, especially utilizing mobile technology like Instacart, it makes sense to expand. Shoppers have become more comfortable with mobile convenience and will make purchases from wherever they are. Brick-and-mortar store retailers have jumped on board with same-day delivery, as Google partners with Wal-Green's, Toys-R-Us, American Eagle, and more to meet online demand.

    Macy's is another example of same-day delivery expansion. The department store launched the service aggressively in 8 major US cities, including Los Angeles, San Jose, San Francisco, Seattle, Houston, Chicago, Washington DC, and New Jersey. Sister company Bloomingdale's rolled out the service in some of those cities also. Deliv handles its' actual deliveries, as many retailers partner with a same-day courier like A-1 Express. The San Jose courier has a national footprint and partners with Fortune 500 companies for fast deliveries.

    Instacart's couriers will pick up and deliver items, such as dog food, kitty litter, birdhouses, and more, right to the customer's The deal with Petco means Instacart’s couriers will bring to customer doors kitty litter and birdhouses as fast as an hour for fees between $3.99 and $5.99. The price is comparable to other retailers offering the service, such as Macy's. It's service is priced at a flat fee of $5 for orders over $99. Shoppers with smaller orders pay standard shipping rates, plus the flat rate.

    Google Express, formerly known as Google Shopping Express, charges $4.99 per order or customers can pay $10 per month and $95 annually. Amazon Prime members get same-day delivery for $5.99 and Non-Prime members pay a fee of $9.99 for the first item and $.99 cents per additional item. Wal-Mart even offers same-day delivery in multiple US cities and Canada. Walmart To Go costs $10, regardless of the order size and in some parts of Canada the service is free, in order to compete with Amazon there.

    In addition to its standard fee, Instacart makes money through fees store owners pay and product markups. Regardless, same-day delivery fees have to stay attractive in order for it to be worth it to shoppers. Now that Instacart is expanding to other products besides groceries, customers may very well use the service to pick up heavy pet items like dog food bags and kitty litter. Only time will tell with Petco's pilot program, and we will see if it proves to work.

    Reference: 1.23.15, Wall Street Journal, Greg Bensinger, Instacart Now Delivers Kitty Litter With Petco Deal

    Tuesday
    Feb242015

    Forrester Says Retailers Have Hurdles with In-Store Pickup Services

    It's clear that shoppers want convenience and pick up of online purchases at physical stores meets demand. However, will it profit retailers? Internet Retailer recently reported about this challenge, highlighting Forrester Research analyst Brendan Witcher's "Nailing In-Store Pickup". Over 53% of the more than 3,000 online U.S. adults surveyed stated they expect notification in two hours or less that orders are ready for pickup and those expectations are likely set by some retailers’ aggressive promises. An example mentioned is how Best Buy Canada guarantees orders placed online will be ready for in-store pickup within 20 minutes.

    This means retailers have to be very efficient operationally. This will directly reflect all repeat customer ratios as well. To be as efficient as demanded, in-store pickup requires merchants to have up-to-the-moment inventory data, sufficient store staff and a designated pick up areas, which must have oversight. Witcher stated retailers should not offer all products stocked in their stores for pickup because some are too taxing on the store to manage in a timely fashion, like bulk appliances. They also are in high demand and affects actual guaranteed inventory. Witcher also says whether a product is available should be called out on product description or product listing pages.

    These are all customer expectations that they stated will rise in the future, which are valid. Another aspect of the survey polled 70% mentioned they mostly use online pick-up to avoid shipping costs. Other reasons in the survey included convenience, to ensure the product is available and reserved for the shopper, to get the product the same day and to avoid taking the time to find a product in the store. Interesting enough, retailers are offering online customers the ability to get their items the same day via numerous same-day delivery programs through a nationwide courier or other partner.

    Online retail is on pace for nearly an estimated $500 billion in growth by 2018, which is over $200 billion more than sales last year. Web-based and brick-and-mortar retailers are on track innovating faster shipping options for shoppers. A number of big names have also implemented same-day delivery options for shoppers to meet convenience demands that attract consumers. Macy's is a department store example, aggressively launching the service in 8 major US cities, including Los Angeles, San Jose, Houston, San Francisco, Seattle, Washington DC, New Jersey, and Chicago. Sister company Bloomingdale's launched the same-day delivery in some cities also.

    Low prices for same-day delivery is a key component and many retailers have roughly the same model. Some use a same-day courier like A-1 Express to handle performing deliveries. The Chicago courier can partner nationwide also. Macy's charges a flat rate of $5 for orders over $99, and shoppers with smaller orders pay standard shipping rates plus $5. Amazon Prime Now is only $5 for bike messenger service in New York. Amazon offer Prime members in other same-day cities for $5.99. Non-Prime members pay $9.99 for the first item and $.99 cents for each additional item. Google Express charges $4.99 per order or customers can pay $10 per month and $95 annually.

    Reference: 1.6.15, Internet Retailer, Allison Enright, While shoppers like in-store pickup, it is tough for retailers to do well

    Thursday
    Feb192015

    Macy's Increased Online Investments Will Help It's Same-Day Delivery

    It was clear that Amazon, Wal-Mart, Google, and other big name retailers are taking their online retail to another level, even with implementing same-day delivery in multiple US cities. This has been a part of maneuvering into position, as online retail is growing on pace to spike to $500 billion by 2018. Yet, department store leader Macy's has a game plan of its' own.

    Internet Retailer recently reported how Macy's has decided coming into the new year, that it was going to step up its' game regarding its' investments into online retail. Macy’s announced a few days ago that it will make significant changes. It will merge its online and store merchandising marketing teams, hire 150 more employees for its digital center in San Francisco, close 14 stores while opening two new ones, and decrease the number of workers per store. Macy's could be turning that spending toward beefing up its' online presence.

    In the report, chairman and CEO Terry Lundgren spoke of how technology is affecting their business and Macy's is making investments to change with it. "Our business is rapidly evolving in response to changes in the way customers are shopping across stores, desktops, tablets and smartphones. We must continue to invest in our business to focus on where the customer is headed—to prepare for what's next." Shoppers have more avenues to find deals and discounts online via tech gadgets, so retailers need to be there with something attractive or they will move on. Macy's has the market for growth and there's no reason not to create online innovation, especially for its' loyal customers.

    Lundgren also stated in the article, "Going forward, Macy's and Bloomingdale's will be better able to move more quickly and nimbly to select merchandise, assort inventories and serve total customer demand, no matter how, when or where the customer shops. Some redundant activity also can be avoided to accelerate speed to market, partner more effectively with vendor resources and ensure the merchandising organizations are more responsive to the marketplace in making and implementing decisions". The key is mobility with the customer as a retailer, especially as a brick-and-mortar store. Shopper convenience will meet the service-driven demand as well.

    Macy's has also performed a strong launch of same-day delivery in multiple US cities late last year. Those cities included Los Angeles, San Francisco, San Jose, Seattle, Houston, Chicago, Washington DC, and New Jersey. Bloomingdale's, its' sister company, also did in Chicago, Los Angeles, San Francisco and San Jose. It partnered with Deliv to perform its' deliveries, another fairly new delivery company. Partnering with Deliv, Macy's set its' pricing at flat rate of $5 for orders over $99. Shoppers with smaller orders pay standard shipping rates, in additional to the flat rate. Same-day delivery probably brought out some other findings to boost Macy's e-commerce.

    Some have stated this is a bold move by Macy's, yet other retailers should take note of the aggression. Mayc's online investing within directly affect its' same-day delivery, which will increase online sales. A same-day courier like A-1 Express is a viable option for any retailer looking to increase their web investments. Other brick-and-mortar retailers can partner with the San Francisco courier and make big gains online with same-day delivery.

    Reference: 1.8.15, Internet Retailer, Don Davis, Macy’s steps up its online investments

    Wednesday
    Feb112015

    Gas Prices Lowest Since 2010, Save With Same-Day Couriers

    In this season of the year, shoppers have been looking for discounts anywhere that they can get them. Yet, it is a plus when you can save on gas also. Gas prices have been dropping drastically over the past few months, and it can't get any better for consumers than the latest news regarding prices.

    Gas prices are at their lowest since 2010, reported the Daily Advocate. There are 33 states with at least one gas station in which prices are even below $2. Triple A also announced that the US has broken the record for the longest streak of daily declines of gas prices. The current national average is $2.29. Alabama gas prices have dropped $.10 cents in one week, putting the state average at $2.18 a gallon. Multiple gas stations there also have gas below $2 per gallon. One station had gas available for $1.95.

    Oil production is driving the gas prices down, as good, old fashioned supply and demand in the global market is having positive effects. Another factor is that US energy companies have found it useful to start extracting oil from difficult-to-drill locations inland. Many new techniques such as fracking and horizontal drilling, have lead to the US extracting oil from shale formations in North Dakota and Texas. The US is now producing its' highest level of oil in 30 years. It makes sense for the US to take the leap and pursue oil itself after the tremendous rise in gas prices in recent years.

    “It’s normally $80 plus to fill up my tank, and yesterday it was just $40,” stated Michelle Miller, a Greenville resident that the Daily Advocate interviewed to discuss the prices of gas. She went on to say, “Although I don’t expect prices to stay this low for long, I think they will slowly begin to rise, I will probably take advantage of the drop and travel out of town for more activities while I can.”

    Some states, however, are not jumping for joy yet over lower gas prices because they aren't seeing the current averages at their own pumps. Hawaii and Alaska both still have an average price over $3.00 per gallon. In the lower 48 states, drivers in the Northeast are paying least than $3, led by New York ($2.88), Vermont ($2.81) and Washington, D.C. ($2.80). The average price at the pump is below $2.50 per gallon in 30 states. Missouri is at ($2.07), Texas ($2.16) , Oklahoma ($2.09), and Kansas is at ($2.17). Businesses are taking advantage of the lower gas prices, including to keep costs down when it comes to same-day delivery.

    Low gas prices doesn't just mean savings for consumers, but also for a same-day courier like A-1 Express. With gas prices going down, the Boston courier has a national footprint and can pass along lower courier costs to its' clients. It's a great time to utilize a courier. Retail giants like Google, Amazon, Wal-Mart and more are all involved in same-day delivery. With lower gas prices, this aids in keeping the costs for the service low, which in turn, will ultimately encourage more companies to at least test same-day delivery.

    Reference: 12.28.14, www.dailyadvocate.com, Stacie Ward, Gas prices at their lowest since 2010

    Wednesday
    Feb042015

    Will Deliv Win Out In Same-Day Delivery?

    With all of the hype regarding Google, Amazon and eBay, it's tough for shoppers and retailers to hear news of an underdog like Deliv with its' crowd-sourcing approach to win out in same-day delivery. The Washington Post recently discussed how Deliv could become the frontrunner in the last-minute delivery race.

    Deliv's founder and CEO Daphne Carmeli started the company in 2012 with a different core objective than her predecessors like Kozmo and Webvan. Her take on what should be driving what shoppers want may even be in contrast to Google and Amazon. “The market opportunity for same-day delivery has very little to do with meeting the needs of people who want things fast,” Carmeli said. Others in the same-day delivery race are indeed after making the service cheap, hence attractive to shoppers. From Carmeli's standpoint, customization is what will ultimately attract and keep shoppers.

    She touted in the article that shoppers desire flexibility and predictability. A shopper can have their items delivered within a two-hour window between their haircut and their kid's soccer game. Also, its' for shoppers who have to change their delivery time for whatever reason and Deliv gets it done. This is definitely a high level of service, even the type of first-class service that a hotel provides its' guests. If it is built right, it is a service that shoppers will pay for, especially if the service is inexpensive.

    Currently, Deliv is making a lot of head way relative to growth within its' primarily partner markets. Deliv has amassed 250 retail partners, including Macy's, Foot Locker, Brooks Brothers and Neiman Marcus. It also has expanded to 8 metropolitan areas throughout the US. When Carmeli first began conceptualizing Deliv, she found that the majority of the stores of the top 200 retailers were in malls. “I can walk around Disneyland, buy stuff, and have it show up at my hotel. Why can’t I do that at the mall?”, Carmeli told mall owner and Macerich operator Art Coppola.

    To Coppola, it makes sense for malls to get on board. Shoppers don't have to be concerned with totting heavy bags around the mall all day. If the customer lives in one of Deliv's service zones, for a $5 fee, they can have Deliv transport those bags to the front door of their home while they stay at the mall. Macerich vice president Kurt Ivey stated in the article, “we are not making money on this. We are not trying to generate revenue, we are trying to enhance the [shopping] experience.” Ivey mentioned this service keeps the shopper at the mall, instead of going to their cars to drop off their bags, because many shoppers don't come back afterwards.

    Deliv could have a same-day delivery system that works, however, one downside is the company has no control of merchandise pricing. Pricing is totally set by the retailer. Also, what if the retailer decides to offer same-day delivery itself like Wal-Mart. Retailers can partner with a same-day courier like A-1 Express and offer the same level of service, even for item returns. The Chicago courier also has a national footprint, which is ideal for mall retail chains to have a one-stop source for all of their locations.

    Reference: 12.12.14, Washington Post, Sarah Halzack, Will the same-day delivery war be won by a competitor you’ve never heard of?