Experts Ask Will Same-Day Delivery Last?

So many companies are going after same-day delivery, as tech gadgets take online shopping to a new level in business e-commerce. Online retail is forecasted to grow to $500 billion by 2018 and the current pace is strong. Technology is supporting the reality of a more convenient shopping experience for consumers, and retailers expect same-day delivery to bridge the gap. From Amazon to Macy's, retailers are engaging more and more major US cities with the service. However, some wonder is same-day delivery as viable as retailers are making it out to be.

In fact, a recent Wall Street Journal article discussed how same-day delivery could be overblown and that it really isn't worth all of the investments that big retailers are putting into it. Satish Jindel, president of SJ Consulting Group, stated, “People don’t have a need for speed, they have a need for predictability”. Jindel is a logistics expert that helped establish small-package carrier Roadway Package System, which was acquired in 1998 by FedEx. Based on a 2013 survey by researcher comScore, 92% of online shoppers were willing to wait four or more days for free delivery, versus paying to have their shipment faster. Therefore, speed could be trending right now, or it could be long-term and even revolutionary in the way we do everyday business.

Also in the survey, shoppers said they would choose the most economical shipping option three-quarters of the time, but the fastest shipping option only 1% of the time. Head of the supply-chain and logistics consultancy for Jones Lang LaSalle Rich Thompson, weighed in on the popular service stating, “same-day delivery is not a requirement by consumers…If you offer it, people will accept it”. He also mentions same-day delivery is just a “a marketing differentiator”. This essentially means that shoppers don't mind utilizing next-day delivery and second-day delivery, but anything faster enables retailers to compete.

Regardless of the how some experts feel about same-day delivery, its' clear that a number of retailers, both brick-and-mortar and web-based only, have set their sights on implementing it and have the investments to prove it. An example is Amazon. The retail giant has picked up the pace with its' same-day program, recently implementing the service in Baltimore and Miami. Late last year, Amazon launched same-day delivery in New York City, Indianapolis, Washington DC, Philadelphia, Dallas, and Atlanta.

Jindel also mentioned how same-day delivery was the most expensive service option for consumers, and as a result, the costs is too much to pay to get something faster. However, a viable option to lower same-day delivery prices is to partner with a same-day courier like A-1 Express that has the expertise to create optimal courier logistic solutions. The Los Angeles Courier has a national footprint and can quickly implement a cost-effective same-day delivery program. It makes sense for all physical store and web-based retailers involved in same-day delivery to partner with a nationwide courier, which can assist with last-mile deliveries at for their everyday shipping.

Reference: 5.4.15, www.wsj.com, Loretta Chao, Is Same-Day Delivery Overblown?