June 3, 2016 | Written by: Michael Dobbs
Categorized: Channel Collaboration
As an Amazon Prime member, I can get most products delivered free on next day delivery. Over the past months, Amazon has expanded its network of cities that offer free same day delivery. (And after falling under fire for not expanding this service into poorer neighborhoods, Amazon has now increased it’s “same day footprint” by expanding across income and racial barriers). This begs the question … in this world of on-demand eCommerce … how fast is fast enough? Do people really need same day delivery, or is this just an extra cost for a service that people don’t need.
I recently ordered new headphones from Amazon on Same-Day Delivery. I was going to buy them at Walmart because I needed to have them before a trip and didn’t want to risk missing the delivery. A 10-minute trip to a SuperCenter was, for me, a small price to pay for getting the product on time.
I decided to check Amazon’s price on-line since Walmart will do a price match. Amazon had the best price, AND they offered free same day delivery. I had forgotten that Amazon offers same day for free in Nashville and decided to give it a try. As I was checking out, I noticed that while Amazon offered same day for free, the default delivery was 2nd day for free. To get same day I needed to change the default offer…which I’m sure some people don’t see. (Great way for Amazon to save some money, but also disappoint consumers).
Sure enough, a few hours later there was a ring at the door and a delivery man dropped off my new Power Beats 2 Wireless Headsets. [I think I’ve mentioned these in a previous blog…best earphones on the market]! I don’t think this guy ever had someone so interested in his job! We spoke for 5 minutes after which he politely started walking away to get back to work (sorry guy…very curious!). They are a [small] private delivery company using what looked like private cars to deliver packages for Amazon. 100% of their business is Amazon Delivery. Each driver has a territory and they have 2-3 runs a day. The delivery cost is probably marginally greater than 2 day in markets with dense package delivery and easy transportation.
So how fast is fast enough when it comes to eCommerce?
Well, in the case of my headphones, same day got Amazon the sale. In the future, I’ll remember the same day aspect and will use it again. For Amazon, same day is an eCommerce differentiator and great convenience. But if Amazon wants to become dominant in Grocery sales, same day may not even be fast enough…as they are experimenting and growing a 1-hour food delivery network!
The market place and eCommerce are changing. Is your business ready? If not, give me a call! I’d love to talk to you about how you can compete in this changing retail and mobile world!
The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions.
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