Are eBay quietly withdrawing from the same day delivery market?
By Dan Boaz
Slowly but seemingly rather quietly eBay continue to contract their same day delivery services which some observers suggest reinforces the lack of readiness and cost appreciation of same day services by the internet giant. Over the weekend eBay silently removed their eBay Now app from the iOS App Store. Prior to removal of the app mobile customers were able to shop via their mobile devices from specific nearby partner retailers to receive same day delivery for a flat $5 fee.
These contrasting actions for a company that were quick to jump aboard the same day delivery wave would infer that costs were behind the decision to withdraw a service that had only launched on a wide scale in June of this year after initial testing in San Francisco in 2012. The lack of fanfare surrounding the removal even extends to the Apple and Google Play links for the app just being simply removed rather than an explanation being provided.
eBay themselves offered a rather misty statement that they were moving eBay Now 'to their core' and it does at present still appear on their main website with service within San Francisco, San Jose, New York, Chicago and Dallas but their earlier hopes to expand to many more metropolitan areas throughout the United States appear to have been shelved.
With an expanding list of companies adding same day delivery services in certain areas for rates that are suprisingly low it remains to be seen whether eBay are potentially losing a piece of this demand to competitors by changing course or perhaps making a wise early withdrawal due to unrealistic cost projections, I'd suggest the latter is more likely although the sector supporting retail including new start-ups is sure to see many more changes, additions and modifications over the coming years.
Where this leaves the many large retailers who signed up for eBay Now is now unclear but those companies such as Office Depot, Walgreens, The Home Depot, Target, Macy’s, GNC, Walgreens, Best Buy and Toys R Us will likely each be assessing if the eBay service can and should be replicated internally or externally. In tandem with that the continuing questions remain about the ideal pricing threshold for retailers offering same day delivery and which markets are the most logical will also come into play. I think that while consumers are very keen to see same day delivery services from most of their favourite retailers, pricing that defies good economic sense only holds the potential of starting a race to the bottom.
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