Are retailers at risk of overcrowding the same day delivery field?
By Dan Boaz
It's interesting that so much of what we've written about same day delivery in recent months has looked at how traditional retailers are looking to ride the wave that adding same day services will take them on. Many large retailers are in effect becoming their own warehousing or distribution centers in an effort to compete with the sales of online retailers while also refining their own delivery service options for customers who prefer to shop online.
While there appears to have been a rush to add same day delivery services by a number of large retailers, others have been working on improving their own delivery services to reliably bring next day or two-to-three day shipping services to their customers, a topic we'll explore in the near future. In recent times though it's been rare to hear of a large retail chain ask whether same day delivery is ideal for their particular business but that's exactly what Toys R Us VP Kacey Sharrett has said;
“Same-day delivery is not right for everyone. There will be a tipping point where not every customer is going to expect everything to be same-day delivered.”
It's a simple statement and the premise does appear to hold some stock. Perhaps in some situations the consumer want for same day delivery may be at risk of being misinterpreted as a need by some retailers as they seek elbow room in a service field that gets more crowded by the month.
Could it simply be that not every type of retail product is a natural match to the same day delivery model? More importantly I'd adhere to the logic that everything has a price that makes sense and in the case of urgent delivery that price is at risk of being constantly driven down in a race to the bottom for some retailers.
Indeed is the risk that the competition for retail same day delivery share will delay the same day pricing model from finding a level where it (the same day service) pays for itself or has the battle moved on to being purely about total sales and market share.
Kacey Sharrett spoke about some of these topics at the National Retail Foundation Big Show along with BabyAge.com co-founder Jack Kiefer who warned that retailers may be at risk of overreaching their fulfillment systems.
For retailers 2015 is poised to be a growing year for same day delivery and many more lessons are sure to be learned over the coming twelve months. Whether that means chains such as Toys R Us taking the position as an observer is most prudent remains to be seen. Incidentally there are a number of very informative videos about technology, retailing and delivery from the 2015 NRF show on their YouTube channel.
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