The Battle for Same Day Delivery of Online Purchases

The fight between shopping online & vs. offline has been a matter of trade offs for consumers.

Want the best selection? Online.
Want to touch it first? Brick & mortar.
Want the best price? Online.
Want it today? Brick & mortar… uh… wait…

When FedEx was founded by Fred Smith in 1973, even the idea of overnight delivery was absurd.  Yet somehow, through logistical magic, they were able to keep their promise.

Overnight delivery is certainly the holy grail, but far too expensive for delivery of everyday online purchases.  Online shoppers have been very understanding that they can’t get their online purchases delivered by tomorrow.  Of course I won’t pay $20 to get my new Xbox delivered in a day. Three days is sufficient.

The biggest draw for Amazon Prime has been free 2-day shipping.  With Amazon Prime, I’m in the elite 2-day club.  It’s almost overnight!

Given this history, it’s almost absurd that any company would even attempt same day delivery for consumer goods — they haven’t even made overnight delivery cost-effective yet.  Yet that’s exactly what’s been happening.  Google and Amazon are currently duking it out with their field tests to provide same day delivery in urban areas.

Google with their retail partnerships and Amazon with their regional warehouses are both perfectly positioned to give this a go.

This isn’t to say that online stores are about to get the advantage over brick & mortar stores. They’re just playing catch-up.  If online stores can perhaps perform the magic squeeze to deliver goods the same day, physical stores were born for this.

Major physical stores such as Wal-Mart already allow a seamless experience from online to offline.  You can purchase your set of towels online and then pick them up at your nearest store.  As reported in Wired, individual Wal-Mart stores now get credit for online purchases made in their area.

One of Google & Amazon’s tactics is to set up a local physical presence in their delivery schemes.  Google just purchased BufferBox and Amazon has their lockers.  Instead of delivering online purchases directly to your residence, they delivery to a secure location locally.

Just show up at a Radio Shack, Staples, or 7-11 to pick up your Amazon purchase.  To be clear, the Amazon Locker program isn’t being marketed as a tool for same day delivery — instead it is being positioned as a way for on-the-go professionals to conveniently pick up their packages.  Yet if their same day delivery push continues, you can bet they’ll employ this new infrastructure.

As you can see, the advantages are blurring between online & offline commerce.

What are smaller online retailers to do?  Work on your value proposition. You probably can’t compete with the big dogs on speed.  Also be on the lookout for services that can add value to your own shipping.

Tagged same day delivery