Will same day delivery take
off this holiday season?
24/Oct/2013 by Cathy Roberson.
According to a recent Boston Consulting Group
survey, most consumers are more interested in free delivery versus paying for
same day delivery. However, will the upcoming holiday season see a shift in
thought? It appears many providers are banking on just that.
This week, eBay announced
its intentions to acquire UK-based Shutl. According to eBaymarketplaces
president Devin Wenig, "Today, approximately 75% of what people buy is
local, found within 15 miles from their home." Indeed, eBay has embraced
this concept as it launched its eBay Now, a one-hour delivery service available
in Chicago, San Francisco and New York and with plans for an additional 25
markets in 2014. The acquisition of Shutl now allows eBay to expand its
delivery service into the UK market along with utilizing its click and collect
service it introduced last month with its retail partner Argos.
Amazon also offers same day delivery via its
Amazon Fresh service as well as its Local Express Delivery service which
operates in Baltimore, Boston, Chicago, Indianapolis, Las Vegas, New York City,
Philadelphia, Phoenix, Seattle, Washington DC for $8.99 per shipment, a bit
more than eBay Now's delivery fee of $5.00.
Google has also officially
introduced its service in San Francisco. It is similar to Ebay Now and also
charges $5.00 per delivery.
Meanwhile, other startups
are entering this space including Instacart, Zipments, Postmates, Deliv and
Kozmo; the same Kozmo that rose to fame during the late 1990s and was out of
business by 2001. Perhaps it was a bit before it time, but Kozmo has recently
announced plans to re-launch its website.
Even the large parcel
carriers, FedEx and UPS, along with the USPS and regional parcel carriers, are
interested in this market, each providing its own version and/or trialing with
partners.
Why the interest in this
market? Boston Consulting Group estimates that the 2013 same day delivery
market will generate $425m to $850m in revenue - small change for the likes of
FedEx and UPS. Perhaps many view this as a way to compete against the market
giant Amazon or as a way to improve the customer experience? Perhaps Ebay's Mr.
Wenig is correct in his statement that most consumers buy within 15 miles of
their home. If so, consumers will indeed benefit from this type of delivery
option, if they are willing to pay for it.
Regardless, this niche market
is likely here to stay and will definitely be tested this holiday season –
particularly in the last remaining hours leading up to the holidays
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