HomeSame-Day Delivery: Is It a Must for Any Retailer?
Same-Day Delivery: Is It a Must for Any Retailer?
This is an archived post from OrderDynamics, now Tecsys retail division.
Same-Day Delivery: Is It A Must For Any Retailer?
Retailers are feeling the crunch of an increasingly aggressive market led by Amazon. They are searching for new ways to satisfy customer demands, especially for seamless brand experiences. And given the prevalence of demands for convenience and speed in this paradigm, many are giving into the pressures Amazon is applying. They do it by committing to same-day shipping promises. In fact, a recent study revealed that 20 percent of retailers now offer same-day delivery. This means that retailers who offer the service are now in the minority. And in the next two years, same-day delivery will essentially be table stakes for retailers, as two out of three will offer the service. The OrderDynamics Omni-1000 research found that retailers are not as capable as they claim when it comes to offering advanced fulfillment options. However, the fact that 20 percent of retailers offer same-day delivery shows a major shift in mindset among merchants and proves a movement is truly underway. But before committing to same-day delivery, the industry needs to make a few foundational changes to get their systems ready and protect their bottom lines.
Are We Ready For Same-Day Delivery?
Same-day delivery is a great concept. It caters to customer demands, and makes the omni-channel brand experience more seamless. Of course, same-day delivery is the natural evolution of two-day delivery. The question for each retailer is whether they can make the commitment to one-day delivery because of better technology and processes, or just a willingness to lose money on delivery in order to make sales. If retailers are already losing money on two-day delivery, how will they value one-day delivery? At the foundation of the argument is that same-day delivery will be pervasive in the near future. Furthermore, there is the notion that automation, robotics and self-driving cars will be able to mitigate the currently massive costs associated with rapid fulfillment. But before those technologies become mainstream, the costs outweigh the benefits for most retailers. However, in anticipation of the day in which robots and self-driving cars do make same-day or one-hour delivery promises a reality, there are a few critical infrastructure investments retailers can make to cater to the consumer need for speed. This without hemorrhaging profits as same-day fulfillment often does. In fact, these investments create the same conditions for a more seamless brand experience that one-day delivery promises, without the crippling costs.
Precursors To Same-Day Delivery Offer A Great Alternative
Same-day delivery relies on the same fundamental capabilities of existing processes like buy-online-pickup-in-store (BOPIS) and ship-from-store. That is, at their core they all require highly localized fulfillment options driven by real-time, organization-wide inventory visibility. And until retailers can master these processes, they need to leave same-day shipping on the lofty goals list.
Efficiently leveraging store networks is the single most important thing retailers can do to reduce the friction of omni-channel fulfillment. Same-day delivery can’t come across state lines cheaply. However, the lessons of how to start come from creating an efficient BOPIS program. BOPIS allows retailers to guarantee the nearly immediate ownership of goods researched and bought online. The only difference is that it asks the consumers to commit to a quick store visit to complete the transaction. It’s not as seamless as same-day delivery, but it is significantly cheaper for the retailer. And while it’s not a perfectly seamless process, in-store pickup creates new conditions for upsells. Consumers have new chances to engage with your assortment, see promotional offers, interact and get help or new information from associates. All this works to increase the potentially for long-term brand loyalty.
Real-Time Inventory Visibility
Whether it’s hyper-quick delivery or in-store pickup, retailers must take the first step of guaranteeing they have real-time inventory visibility. Without it, not only is efficiency not possible, the process itself really can’t work. Knowing where items are, when they can be made ready for pickup or delivery, and accurately conveying this information to both customers and associates in the store or warehouse is essential to infrastructure investments that an organization can make.
Same-Day Doesn’t Need To Happen Today
Yes, same-day delivery is a wonderful concept and something every retailer should ultimately aspire to. It’s the culmination of all the omni-channel fulfillment improvements and investments retailers are making today. But let’s not get ahead of ourselves; there’s work to be done first. Start with real-time inventory visibility and become a master of two-hour BOPIS. In-store pickup means retailers can offer 'same day pickup' which may have the same impact as same day delivery - but without the tremendous costs and logistics challenges. Eventually, robots will start running warehouses and self-driving fulfillment fleets will whisk items off to customers individually, and immediately. When that time comes, if you are ready on all other fronts of omni-channel retailing, then you’ll be ready to make same day delivery a profitable part of your business. Rather than a money losing proposition. Related: