With news that Google began testing same day delivery services with a major retail player – Target – many retailers are wondering if this is the new mobile commerce. Should you be thinking about same day delivery in your business plan?
First, lets consider the reasons some consumers might choose to visit a store instead of order online:
If there’s an item you need today, a trip to the store is inevitable. At the moment, this is the fastest way to get a product in your hands.
Save on Shipping
Though many retailers offer free shipping at a certain order value threshold, if you’re just shopping for a single item, shipping costs are often prohibitive.
Many consumers still like to try things on, hold the product, or read the labels before purchasing.
Remember when Amazon Prime was introduced? Analysts and the general public were skeptical that people would be willing to pay the convenience fee upfront for a year’s worth of two day delivery. We all know what happened next. Amazon Prime is a runaway success. Those same shoppers, used to paying a little extra for convenience, will be the shoppers that make same day shipping a success.
Many skeptics will point to the failure of dot-com services like Webvan as a reason same day delivery won’t take off. But truthfully, the world is in a different place now than it was then. We’re more connected, and we expect instant reactions and gratification. We’re also addicted to being the first to discover – and broadcast our use of – the next big thing.
The reality is that if Google and Amazon are doing it, you can be certain that the major players in the retail space will follow shortly after. Retailers with large distribution channels or retail locations already in place will benefit the most, since they already have the infrastructure needed to make it a success. The costs of that infrastructure will be prohibitive to smaller businesses, but we predict there will be a rise in niche fulfullment providers that work with several retailers at once to provide those services.
Would you consider using same day delivery? We’re interested to hear what dollar amount would be ideal to get you to use the service, so tell us in the comments below!