Ever since the advent of eBay and Amazon, shopping has never been the same. The major leap towards ubiquitous access to eCommerce and online shopping has transformed how Americans and much of the world purchases products. As groundbreaking as the emergence of leading online retailers was in the 1990’s, the impending disruption that will result from same day delivery will be greater.
Same-day delivery, if executed correctly, can provide expansive options for consumers and brands hoping to grow their business. While critics may see same day delivery as a downfall for smaller retailers, it can potentially offer competitive advantage for businesses of all sizes.
Below, I explore some of the key factors that will contribute to the success or failure of same day delivery:
Large Retailers Set to Lay the Groundwork
Amazon has pondered over the feasibility of same day delivery, but logistics behind making it a reality are time consuming and costly. Analysts see Amazon’s preparation for same day delivery as a response to the enforcement of state sales tax in 2012 and an impending Internet sales tax bill in 2013. To position itself for same day delivery Amazon is spending close to $1 billion on warehouses and facilities near metropolitan areas in Texas, New Jersey, Tennessee and Virginia.
EBay offers a beta same day delivery offering via couriers, delivering items from retailers in New York, San Francisco and San Jose to locals. The EBay Now iPhone app allows for orders to be placed and delivered for a $5 fee, sometimes arriving in an hour. While this is an early variant of same day delivery, a wider implementation by eBay to incorporate their online offerings is currently underworks.
Logistically Complex and Potentially Lucrative
The logistics required for making same day delivery a reality are daunting. Supply chain, delivery, customer support, advanced eCommerce software and warehouse facilities are all crucial to making the new tactic a reality. Amazon for instance, is revamping their logistical operations as shown by their recent acquisition of robotics company Kiva Systems.
Kiva Systems technology streamlines warehouse processes through automated robotics for inventory management and package handling. Automation of existing processes as well as a more efficient use of machine data to streamline operations will be necessary for same day delivery.
Enterprises are also likely to use machine intelligence technology such as Splunk for optimizing the flow of inventory and shipments. Machine generated data from warehouse equipment, delivery trucks, Kiva Systems’ robotics and any tools with embedded computers, can provide an enterprise with analytical insights for crystal clear perspective regarding same day delivery logistics.
SMBs Are Sure to Adopt the Offering
Small business will be affected by same day delivery from large corporate competitors, but there is room to adapt and benefit from such innovation. Hubbub Deliveries is a small business in London offering same day delivery within participating stores throughout the city. Shoptiques, a small fashion company that allows users to access offerings from boutiques in metropolitan areas across the globe, offer local same day delivery for a $25 fee.
By addressing the fact that shoppers do appreciate and are willing to pay for same day service, a new generation of startups and small businesses can offer expanded services that grow their business. Physical retailers can capitalize on same day delivery by creating more agile and light weight store locations that serve as physical browsing arenas for digital purchases. A shopper can visit a store, view and touch the item and place an order for same day delivery in their exact size and color.
Advanced eCommerce Systems Required
While logistical components required for same day delivery are daunting, the integration with a powerful eCommerce system is needed to ensure a fluid process. Updated inventory, alerts for delivery ETA and various other factors will need to be facilitated by a more robust eCommerce system.
While off the shelf eCommerce solutions are great for today’s eCommerce requirements, companies embarking on same day delivery will need custom solutions for integrating warehouse data, machine generated data and real time data regarding shipments and deliveries. In regards to advanced warehouse management systems, custom eCommerce solutions are required for complete control and stability.
Another challenge involves migrating data from older eCommerce systems into advanced systems required for same day delivery. While at its core same day delivery depends on logistical issues, software for maintaining eCommerce operations will be equally vital.
As same day delivery models are refined, it is likely for businesses of any size to begin offering the service. While logistics are a crucial component of same day delivery, the software systems required to facilitate and monitor the process are equally necessary. It is safe to say that there is no longer a question of whether or not customers are interested in same day delivery, it is now just a matter of timing and strategy.
*Originally featured on Wired.
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