The rise of same-day delivery has been fascinating to watch. If you’re old enough to remember life without it, you know that on-demand service used to be the exception - not the norm.
Restaurants offering food delivery and couriers ferrying legal documents were the main instances of same-day delivery. And then along came Kozmo.com promising one-hour delivery of small consumer goods in the late 1990’s. It lasted all of 3 years, then closed its’ doors in April 2001.
Although Kozmo.com didn’t last, it demonstrated high consumer demand for same-day delivery - even if it wasn’t profitable for businesses at the time. As Amazon has revolutionized the market and sped up shipping times, our expectations for on-demand services continue to increase.
MarketingProfs recently shared an infographic titled “The On-Demand Economy: Keeping Up With The Instant Gratification Market.” Published by 2Flow, a logistics solutions company, the infographic sheds some light on the state of same-day delivery today.
Here are our 3 key takeaways from the infographic:
Businesses have a big opportunity to distinguish themselves by launching same-day delivery.
Market penetration for same-day delivery is growing, but it’s still relatively low. Big players like Amazon, Walmart, and Google Express dominate, and a total of 280 companies across 16 industries offer same-day delivery.
However, 280 is not a large figure when you consider the total number of businesses. For example, only 15% of retailers worldwide provide same-day delivery, which means the other 85% don’t.
For customers interested in same-day delivery, many of them are willing to pay a premium for it. A survey of US consumers shows that 60% would shell out more than $10 for same-day furniture delivery - and that’s just one industry-specific example.
Businesses that get in early can capitalize on the competitive advantage of offering same-day delivery. It could be the key factor in convincing customers to try out a new brand.
Expectations for same-day delivery are expanding across industries.
A 2013 Bizrate study included in the infographic lists the percentages of web customers who wouldn’t follow through with their purchase if same-day delivery wasn’t offered. Who was at the top of the list? The Gifts & Flowers market segment with 41%. And that makes sense - gifts and flowers are often sent at the last minute, so same-day delivery is a necessity.
But other industries were creeping in as well. 31% of Computer & Software shoppers reported potential cart abandonment, along with 29% of Office Supplies shoppers, and 24% of Musical Instruments shoppers.
And these data point match up with our own survey we conducted, where 60% of consumers stated they’ve abandoned a purchase due to slow delivery times.
As same-day delivery is offered by more and more businesses across many industries, we begin to expect it everywhere, in every industry. In fact, those Bizrate percentages have likely gone up since 2013. Companies that decide to launch same-day delivery in the near future may be able to get ahead of that expectation - and learn a few things in the process.
Companies must take steps to understand all the implications of same-day delivery.
The data presented in the infographic is pretty compelling. By adding same-day delivery, there’s a large opportunity to gain on competitors and meet growing customer expectations.
However, the impact same-day delivery has on other areas of a business are equally as large. It can cost a lot if you don’t maximize operational efficiency. You might need to hire staff to manage, process, and deliver orders. And you have to ensure you have enough stock in the right locations to fulfill customers’ on-demand orders.
If all the inner mechanisms of same-day delivery don’t work, it can have long-lasting impacts on customer loyalty and future sales. Almost half of the customers surveyed said that on-time delivery affects their satisfaction afterwards. And in a recent Support.com survey titled “Connected Consumers And The Most Personal Brand Experience,” 40% said the most significant part of the brand experience came after purchase.
Before deciding to jump on the same-day delivery bandwagon, it’s important to understand the logistics required to successfully implement it, and what investments you’ll need to make to ensure its’ success.
Better yet, partner with a third-party same-day delivery expert like Dropoff that can help you think through and prepare for all of the operational considerations related to offering a same-day delivery option to your customers.
With just 76 companies in 6 industries offering same-day delivery in 2014 jumping to 280 companies in 16 industries in 2016, we expect to see more adoption of same-day delivery in the coming years.
Want to learn how a same-day delivery service might complement your current shipping strategies? Request a demo of Dropoff to better understand our offering.