Retailers Missing Opportunities in Same-Day Delivery

Retailers that are looking to keep up with Amazon need to ramp up their delivery services. With 89 percent of shoppers defining fast delivery as being within two days, instant gratification is being the norm rather than the exception. Even though Amazon is the clear leader in same-day delivery services, there is still plenty of room for the competition. Right now, Amazon only offers same-day delivery in 27 markets.

According to data from L2, a quarter of shoppers say they would abandon their shopping cart if they could not get same-day delivery, yet less than one fifth of the 97 retailers studied offered this service. In addition, 40 percent of shoppers say they would turn to same-day delivery if they were unable to get to a store, which means there is a huge opportunity here.

Customers Willing to Pay for Instant Gratification

Even though people have come to expect free two-day shipping thanks to Amazon Prime, most are still willing to shell out for an upgrade to same-day delivery – with customers willing to pay as much as $5 more to get their goods by the end of the day. However, that amount is not enough to cover the average cost of the service, which is $10 more. Firms have a few options here, including offering two-day shipping for free or at a certain order threshold and absorbing the cost or charging customers outright for the shipping fees.

Businesses that are not prepared to invest in the infrastructure needed for such an offering do not have to be left out; startups like Deliv and Uber can step in to make this a reality.

One firm that is making strides in keeping up with the demand for same-day delivery is Macy’s. Despite falling revenue and 150 store closures, its ecommerce sales are making double-digit gains. A partnership with Deliv allows Macy’s to bring customers reasonable same-day delivery options, with a $99 free shipping threshold and a mere $5 charge for same-day delivery in certain markets.

This blog post was based off of an article from Multi-Channel Merchant. View the original here.

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