Same-day delivery isn’t a novel idea. Businesses routinely need an item that’s critically important right away — not tomorrow, not next week, but within hours.
Take the retailer that runs out of stock of a hot-selling, highly profitable item, and needs to restock immediately while demand is still high. Or the factory where a broken pump has shut down an assembly line, costing the company thousands of dollars an hour, and needs to get a replacement pump as soon as possible.
What’s new about same-day delivery is the need to perform at scale. The entire buying experience has been transformed by the “Amazonifaction” of the customer journey, and delivery is no exception. Not so long ago, consumers were satisfied with next- or even second-day delivery. But thanks to Amazon, they now crave speed, simplicity and optionality. Consumers want what they want, when they want it: whether it’s two-day, same-day, or even Amazon’s latest offering, “Choose Your Day.”
The traditional same-day delivery process for emergency use cases is highly manual and inefficient because it involves one-offs in the larger logistics picture. It’s OK to be sub-optimized when the cost of failure is your relationship with a key customer. But as e-commerce growth continues to fuel demand for urgent delivery, same-day at scale has to operate with fail-safe reliability within the entire supply-chain ecosystem.
A McKinsey study projects that same-day delivery volumes will account for $200 billion in U.S. online sales — about 25% of the nation’s e-commerce market — within the next six years. The stakes for retailers are high. To add pressure, a survey by research firm BigCommerce showed that 58% of consumer respondents have stopped shopping with a particular retailer because of a negative delivery experience.
The ability to provide same-day at scale matters. Failure to do so effectively will cost you.
Successful same-day programs go beyond identifying a delivery partner for each market. Same-day affects multiple components of the supply chain. Preparing the supply chain for same-day means taking a holistic approach to inventory visibility, management, customer experience and last mile.
To get an order to a customer within a few hours, the retailer needs to know: Where is the product? Where is the most efficient place from which to fulfill the order? Are there resources on the ground to pick, pack and stage the order for pickup? Is there a service provider that can schedule delivery? And last but not least, is there enough inventory to fulfill online orders, as well as walk-in purchases, at each site?
Reducing the physical distance between inventory and buyer is one of the most impactful ways to get closer to offering same-day in communities large and small. One way top-performing retailers are achieving this (without massively expanding their physical footprint) is by leveraging traditional brick-and-mortar facilities to do double duty. Local stores are now serving as product-staging fulfillment centers for customers who buy online and choose delivery from the store, as well as walk-in sites for those who prefer in-person experiences.
Do you remember the last time you clicked a tracking link, only to see that your order was “out for delivery”? Once, being able to see the last known location of a package was a good customer experience. Those days are gone. A recent study shows that one-third of customers want real-time tracking for orders. Consumers want an Uber-like, on-demand experience, with reliable, accurate, real-time visibility across pre- and post-pickup processes. If one retailer can’t deliver, another one will.
There’s no one-size-fits-all solution; every logistics model has strengths and weaknesses. Particularly in the case of same-day delivery, ensuring the best customer experience means deploying the most cost-effective service for each and every order.
Asset-heavy solutions such as hub-and-spoke networks are great at logistics, just not when it comes to same-day delivery. Hub and spoke is excellent at getting recurring parcel shipments where they need to go on set schedules. But the efficiencies gained through those kinds of networks conflict with the demands of same-day: speed and visibility for items large and small.
Traditional same-day solutions, such as couriers, have their limitations as well. There’s little to no flexibility to adjust for larger items or longer distances, or to respond when an urgent last-minute order comes in and the truck has already left the dock.
Crowdsourcing offers a creative yet practical solution for retailers who need flexibility and scalability to meet same-day demands. By using a crowdsourced model, it’s possible to tap into resources already on the road — such as nearby employees, customers, and commuters — to create a “just-in-time” delivery service. The result is an asset-light logistics solution that better meets the need for faster, more efficient delivery, allowing retailers to flex up and down as demand ebbs and flows. Choose a crowdsourced delivery provider that can play well with your supply-chain infrastructure; can flex to meet a variety of sizes, distances and volumes, and has coverage in as many of your delivery zones as possible.
We’re only at the beginning of the market for same-day, even two-hour, delivery services. Retailers, service providers and consumers are still sorting out the balance between speed and price. But it’s clear that consumers are willing to pay for convenient same-day delivery.
It’s the new normal. Developing a winning strategy and deploying a successful same-day delivery service provides retailers and other businesses with yet another way to differentiate themselves to their customers. Solving for increasing demand for same-day service with innovation and flexibility is the only way retailers can meet rapidly evolving consumer expectations — and stay one step ahead of the competition.
Valerie Metzker is head of business development at Roadie, a crowdsourced delivery service.
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