E-tailers (online retailers) are jumping on the same-day delivery service bandwagon but are finding few buyers interested in the costly service. According to a survey from Boston Consulting Group, 1,500 U.S. consumers were asked to choose from a list of services that might entice them to shop online more often. Less than ten percent of them chose same-day delivery whereas nearly all of them said free delivery would be the key.
The survey continued by asking other questions, one of which was what price would the shopper be willing to pay for same-day delivery of a $50 online order. The average answer was about $7.50, far lower than the average being charged by current e-tailers.
When Amazon began offering same-day delivery on select items in certain locations back in 2009, it caused a stir in the industry. Many thought this would be the bridge that finally covered the gap between online and brick-and-mortar sales – instant delivery of the item purchased, one of the few things that entices many to physically buy products. So Wal-Mart, eBay, and others jumped into the game to try to seize the potential as industry buzz touted the idea as the next big profit maker.
Delivery services also grabbed on, hoping to cash in on the same-day craze. The U.S. Postal Service and FedEx both offer same-day delivery in select cities and areas of the U.S. and Canada.
Yet so far, the demand for the service and the willingness to pay for it has not been as expected. Most same-day delivery users are “affluent millenials” (urban shoppers aged 18 to 34 making over $150,000 per year), but those online shoppers only make up about two percent of the total market.
This means that same-day delivery will likely never leave the niche fad stage. Certain items that those affluent millenials often buy will certainly benefit from the idea – gadgets, games, etc. Otherwise, this latest survey and the industry’s numbers so far have proven that same-day service probably isn’t the “game changer” the industry thought it might be.
Same-day delivery has been around in some retail industries for a long time, of course. Furniture stores, some grocery stores, and of course, fast food, have all been doing this for a long time. In the large cities of much of the world, from Toronto to London to New York to Paris, same-day delivery for buyers who are largely getting around on public transport and on foot is commonplace. Still, paying extra for the service on frivolous items that can usually wait a few days for the mail to arrive does not often work well even where people are used to same-day delivery.
So the fad is likely to stay a fad for most e-tailers.