“Ordered today, delivered tomorrow”: a promise well known to many online consumers. This commitment, which brings the e-commerce experience closer to physical commerce, combines the convenience of shopping on the web with the immediate satisfaction of buying a product in store. While same-day delivery appears to be the next evolution in e-commerce, this model is proving particularly complex. Its advantages are obvious to everyone, but its challenges are underestimated, for both hot start-ups and established carriers. Many have already ventured to offer same-day delivery at scale, but so far few have managed to turn it into a lucrative business model.
What are the challenges of same-day delivery and what is its future? Here is our analysis.
What is same day delivery?
Same-day delivery is a typical e-commerce term indicating that the order will be delivered the day it is placed. In practice, same day delivery means, in fact, that the package will be delivered within 12 hours.
Same-day delivery: nothing new after all
Before looking at the future of this particular delivery, let’s take a quick look back. Same-day delivery has been a business model that has garnered a lot of attention since the early days of e-commerce. In no time, we have seen new startups flourish promising to deliver home orders quickly at the cheapest shipping from China to Australia.
An obviously attractive promise, since these companies have easily managed to collect millions for their growth. Unfortunately, it quickly turned out to be “too good to be true”. Take the example of meal delivery startups going bankrupt one after the other. It is clearly difficult to make same-day delivery a profitable model.
Same-day delivery is not impossible: the example of Many online shopping sites
Few succeed, but there are companies that manage to offer same-day delivery, mostly behemoths like Amazon or discount. For these large brands, it is an additional service that has “marketing value”. These companies do not need to make a direct profit and thus have an advantage over other online shops. Moreover, this type of delivery represents an unprecedented budget deficit for the wholesalers of the market, which is absolutely not viable for 80% of online stores today.
Same-day delivery changes consumer expectations
The same goes for (very) fast delivery: as soon as the consumer discovers it and uses it often, any other shipping option that requires more time feels like a step backwards. In other words, offering consumers a new and better experience changes their expectations. Money obviously plays an important role and shipping costs are the biggest need for most consumers. But as the price of same-day delivery drops compared to next-day delivery, more and more customers are opting for this method of delivery. This situation requires innovations from the industry and strong cooperation with online retailers. Online stores that succeed will use same-day delivery to differentiate themselves and attract new customers until “12-hour delivery” becomes the dominant shipping option and online stores must once again look for new ways to distinguish themselves. Many brands ship offers cheapest shipping from china to Australia.