Order in the Morning, Have the Loofah Sponge by Afternoon
Delivering a product on the same day that it is ordered is difficult to coordinate and costly. But in a business environment where Amazon is king, it has become the new must-have offering. Tom Allason, founder and CEO of a British same-day delivery service that will soon expand to the U.S., believes “There’s lots going on in this space, and it’s all driven by Amazon.”
Amazon began offering the option in 2009 to customers in areas near warehouses and only on certain items. For its part, Amazon has hinted that it will expand the same-day delivery option in 2013. This is not the first time that this near-instant-gratification service has been popular. During the dot-com boom, companies like Kozmo.com and Webvan failed miserably because it was simply too costly to be profitable. “It’s the old idiom ‘time is money.’ People want it now, they want it fast,” said eBay’s Lina Shustarovich. Wal-Mart debuted the same-day option this holiday season in five markets for $10. Smaller retailers are resorting to a different tactic for fast delivery. Shoptiques, an online company based in New York City, has free shipping and delivery on all orders more than $100.
Yossi Sheffi, director of the M.I.T. Center for Transportation and Logistics, is “skeptical” this approach will be successful. He estimates that even with efficient robot-operated warehouses, the cost would be run from $10 to $50 per order. Tom Allason believes that the desire for same-day delivery is coming. “People don’t need immediate delivery today, but they will need it tomorrow, because as soon as you know it’s available, you start expecting it and you start demanding it.”