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?

Boeing's Plans To Improve Manufacturing Processes

If an airplane manufacturer like Boeing is after making their assembly operation better, it goes to show that faster part replenishment will have something to do with it. Boeing recently made the move of hiring a former expert in auto manufacturer, Walter Odisho, to assist in its' standardizing of production approaches.

Reuters recently reported how Boeing found new ways to create better manufacturing efficiencies when building the new 777X jetliner, due to be in service in 2020. "I think the 777X will be our first opportunity to show the ideas that we have to date," said Walter Odisho, Boeing's vice president of manufacturing and safety. The article also talks about how in the automaker industry, standardized production approaches are common, but not in the aerospace industry. Odisho has been brought on board to implement more of the automaker process deeper within the manufacturing plants.

Airbus, its' competitor, applies the same manufacturing methods that automakers do, which has led to its' effectiveness. Both companies had records sales last year, and it probably won't slow down. Making the decisions that ultimately result in reducing costs will end up giving one of them more of an edge in the market. "If you look at aerospace with market demand rising, we need to start thinking differently and move efficiencies from the auto industry into this arena," Odisho stated. `

"Could the buffer of several days for holding parts in aircraft plants ever hit auto-industry levels of as low as two hours?" Odisho's response was, "Ultimately I think we will see that day". Boeing can hold parts for less time with an automaker model. It can also implement same-day delivery for parts, as many companies are turning to. Same-day delivery is more feasible now to cut costs then ever before, as technology has aided in quicker delivery methods that actually save money.

Odisho also talks about the flow of parts in the report, which falls in lines with fast deliveries for parts, just as within the auto industry. "If we can develop a system where we have direct deliveries to our lines and in an orientation which our operators will use to simply secure instead of handling parts, we have tremendous opportunities," he said in regards to the flow of parts. Same-day delivery of parts is what a number of companies have made an integral aspect of their inventory management, especially when it comes to replenishment.

Boeing found the same techniques for the jetliner, produced cost savings as well. Applying other innovative processes will work for Boeing also, such as utilizing a same-day courier like A-1 Express to perform part deliveries from its' suppliers. The New York Courier has a national footprint and delivers parts throughout major US cities. A-1 Express also creates courier logistic solutions that will reduce costs, lower inventory and promote better replenish systems.

Reference: 4.28.15, www.reuters.com, Tim Helpher and Alwyn Scott, Boeing looks to car industry expert for jet production savings

Toys-R-Us Focuses On Web Sales And Fulfilling Orders From Stores

When we think of toys, the first name that comes to us is no other than Toys R Us. A toy retail leader globally that has had to make the right adjustments to stay ahead, especially with more and more online competitors racing for market position. This is where Toy R Us decided to shift its focus last year, and for their web business, it's working.

Internet Retailer reported how the toy store's numbers from last year affirms it is on the right track on the web. Online sales went up to $1.23 billion from $1.15 billion in 2013, which is a 7% increase. Online retail represented 10% of Toys R Us' total sales versus only 9.2% in 2013. Toys R Us achieved the web sale improvements it was after, yet not the in-store sales to match, which decreased in the US by 1%. Store sales did increase by 1.8% internationally. As a whole, total sales in 2014 went down by 1.4%, from 12.54 billion in the year prior to $12.36 billion. This has called for changes by Toys R Us in order to do better this year.

Toys R Us CEO Antonio Urcelay commented to investors and analysts on all the changes the company has made to compete on all fronts. "We also made significant process and organizational improvements, addressing a number of important executional issues. As a result, during the year, global Internet sales continued to grow, benefiting from our strengthened omnichannel fulfillment model, U.S. margins improved due to disciplined promotional activity and inventory management, and customer satisfaction metrics confirmed that changes we have been making provided a better shopping experience in-store and online.”

One interesting figure from the report is the percentage of traffic Toys R Us is getting online. It stated that mobile growth is the most important driver of e-commerce traffic for the toy retailer, with 57% of its' digital visits have come from a mobile or tablet device. More shoppers have become comfortable with shopping online and even view it as a preferred way to shop, in addition to the ability to utilize a same-day courier like A1Express to get their products delivered fast.

The holiday season is big for every retailer and will be no different for Toys R Us, as the toy company plans on being ready to capture more sales this year. In the Toys R Us presentation, executives stated, “In the coming year, the company plans to further strengthen its omnichannel capabilities, including in-store pickup and ship-from-store execution, especially during the peak holiday season”. The more options for the customer, the better for any retailer to gain ground during the holidays. A number of retailers, including Toys R Us, have partnered with a courier to offer same-day delivery as a ship-from-store method.

Online retail is expected to grow to $500 billion by 2018. Couple this with technology advancements, and itseasy to see how e-commerce is the sure direction for any brick-and-mortar retailer to heavily invest in. A1Express is a New Jersey Courier that services nationwide and can aid any retailer meet the rise in on-demand delivery by shoppers, even fast shipping from Toys R Us stores.

Reference: 4.15.15, www.internetretailer.com, Bill Briggs, Web sales grow, but total sales dip for Toys R Us in 2014

Amazon Expands Same-Day Delivery Into Baltimore and Miami

There's clearly no turning back for Amazon, as some e-retailers have done when it comes to same-day delivery. The retail giant is all in and makes it clear with its' latest move that expansion of the service will continue. Bloomsberg recently reported that Amazon has expanded its' same-day delivery program to Baltimore and Miami. The initial roll-out of the Prime Now service will be available in certain zip codes and then expand into more areas within both cities.

“Since launching, we’ve seen high demand on everything from essentials like water and paper towels to more surprising deliveries like getting a customer a hard-to-find, top-selling toy,” Dave Clark, Amazon’s senior vice president of worldwide operations said. Thousands of products are available from Amazon with the service, from electronics to your everyday shampoo and household products. With a number of items at customer's disposal, Amazon creates the volume needed to make consolidated deliveries profitable. This is the idea behind same-day delivery, which does requires economies of scale and the right demographics for it to really work.

For its' 40 million Prime members, Amazon's two-hour delivery will be free and one-hour delivery is $7.99. The membership is $99 annually, plus the additional charge for service. Other competitors prices for same-day delivery are similar. Google Express is $4.99 per order or customers can pay $10 per month and $95 per year. Wal-Mart's same-day service is a flat $10 fee, regardless of the customer's order. Macy's has fees of $5 per order over $99 and shoppers with smaller orders pay standard shipping plus $5. Newcomer Ace Hardware is testing the service, charging $5 bucks also.

Amazon's aggressive city expansion is no surprise. Late last year, the e-retailer launched same-day delivery in major US cities into its' same-day delivery program, including New York City, Dallas, Indianapolis, Washington DC, Philadelphia, Dallas, and Atlanta. Baltimore was initially in the list, however, the launching appears to now be official. The article mentions that more cities are to come this year for Amazon as well.

Plans for retailer are strategic and vast, as Amazon pursues to stay ahead of competitors. It opened its' very first physical store location before the holiday season last year in Manhattan, New York as a small hub for same-day delivery from its' inventory and a location for shoppers to pick up online orders. Amazon also expanded same-day shipping in Vancouver and Toronto. Amazon.ca is competing there, namely against Wal-Mart Canada's free same-day service in Greater Toronto.

As the big retailer expands, other e-retailers and physical store retailers are following suit, jumping into same-day delivery to get their product moved. A same-day courier like A-1 Express is a viable partner to implement the service in any major US city. The Baltimore courier has a national footprint and utilizes the latest in courier technology as a platform for innovation for fast deliveries. Online retail will continue to grow. The competition will have to keep up and offer same-day delivery, or get left behind by retailers that can meet current shopping demands for convenience.

Reference: 3.19.15, www.bloomberg.com, Annie Massa, Amazon Expands Same-Day Delivery to Baltimore and Miami

Will EBay Turn From Same-Day Delivery?

It's eBay and a few other e-retail giants that all started a hot pursuit for same-day delivery. However, eBay could be turning away from it. Yahoo Finance discussed how eBay isn't interested in the sought-after service any longer.

EBay acquired UK-based delivery start up Shutl late last year with growth plans to oversee its same-day operation, but not to perform its US city deliveries. However, in December last year, eBay pulled it's same-day service eBay Now and officially pulled eBay Now from the app store. The app allowed mobile customers to shop with it from local retailers and have their online purchases delivered same day for $5. The e-retailer was planning to integrate the stand alone app within eBay’s main mobile app and website instead. Now, eBay may have decided to pull away from same-day delivery altogether, rethinking what model really works for it.

Now, eBay has signed a deal with Woolworths in Australia, where eBay shoppers can make a purchase on its' site and then pick up the goods from Woolworths supermarkets. The article mentions how this is not the first time for eBay, partnering in a similar way with Argos in the UK. This could be a pattern to come for eBay within the US. One reason for the shift is eBay feels customers will buy in to faster delivery without paying for shipping. It also believes this model is beneficial for returning defective items directly to a physical store, instead of eBay.

The report revealed stats suggesting that customers are indeed more interested in free shipping than same-day delivery. A Harris Interactive survey of 2,241 US adults shows that 70% of consumers don't want to pay extra for overnight or same-day delivery. This could mean customers are more apt to simply go to the local store and pick it up, rather than pay to get their online purchases quicker. Shoppers without the time to pick up, can also turn to a same-day courier like A-1Express to perform same-day delivery and return items to stores for them.

Some of the best outfits for same-day delivery are physical store retailers implementing same-day delivery themselves. Wal-Mart has same-day delivery in a number of major US cities. Wal-Mart's "Wal-Mart To Go" is also in Canada. Regarding pricing to compete with heavy hitter Amazon, the retail leader even has opted to offer same-day service free in some Canadian areas to attract enough shoppers to gain a good share of the market. Macy's and Bloomingdale's have launched same-day delivery in 8 major US cities. Petco has also joined up with Instacart to perform same-day deliveries of pet items also.

Amazon has put in its' share of investment into the service. As a web-based retailer, it has built more than 50 fulfillment centers nationwide, which act as its own locations for distributing same-day. It opened its very first physical store location in Manhattan, New York last year before the holiday season. The location is being utilized for same-day delivery and online customer store pick ups. Being as close to shoppers as one can get could be the long-term objective for Amazon.

As eBay shuffles into its optimum model for quick deliveries, Google and Amazon continue to expand same-day delivery. Other physical store retailers will continue to at least test the service to see if it will pick up their sales, especially with mall retailers. A-1 Express is a Houston courier with a nationwide footprint, able to partner with any web-based or store retailer seeking after last-mile deliveries to meet their online shopper demand.

Reference: 3.9.15, Yahoo Finance, Patricia Garner, Why eBay is not interested in same-day delivery