It was two-day delivery that really changed the game for ecommerce. Then came along overnight delivery. But in 2021, same-day delivery is the new kid on the block.
By 2022, the same-day delivery market is forecasted to reach $9.6 billion in the United States – and more and more retailers are clamoring for a slice of this lucrative pie as consumers come to expect ever-faster delivery timeframes. Yet a recent Gartner analysis reviewed the fulfillment offerings of 50 U.S. fashion, apparel, and footwear retailers and found that only 8% offer same-day delivery services.
But is your business ready to offer same-day delivery? More importantly, should same-day delivery even be on your radar as a retailer?
That’s exactly what we’re going to cover in this post. We’re exploring what same-delivery is, why it matters, and what your business needs to consider if you’re thinking about adding a same-day delivery option.
Same-day delivery is pretty self-explanatory; it’s the delivery of an online order the same day that the order was placed. To ensure delivery within this timeframe, most businesses will implement a cut-off time that customers need to place orders by i.e., by 2pm to ensure delivery the same day.
Offering a same-day delivery option gives merchants some distinct advantages. It means higher customer satisfaction and lower shopping cart abandonment due to lengthy delivery times. It also gives retailers the ability to compete in a marketplace dominated by the ecommerce giants and their rapid delivery timeframes.
But same-day delivery also poses some pretty major hurdles for online sellers. Because if you’re going to offer same-day service, you need to be absolutely certain that you can deliver (pun intended).
It’s no secret that what qualifies as ‘fast’ delivery is getting progressively speedier. Where Amazon Prime’s two-day shipping perk was once a game-changer, this has become a standard expectation for merchants at large. And the bar is only getting higher; 96% of consumers now consider ‘fast delivery’ to mean same-day delivery!
Yet this trend towards ever-faster delivery isn’t just down to the Amazon Effect. The COVID-19 pandemic has resulted in an explosion of hybrid online-to-offline (O2O) retail services that offer consumers near-instant gratification – and all signs show that this is here to stay.
BOPIS (Buy Online, Pick-Up In-Store) and curbside pick-up can have items ready in a little as an hour, while the growth of store-based fulfillment has made same-day delivery a reality for many consumers for the first time.
By comparison, two-day or even overnight delivery options are increasingly lacking. For online retailers, this has made same-day delivery an immensely valuable asset.
Same-day shipping and same-day delivery are often talked about interchangeably, which can be very confusing for consumers. But same-day shipping does NOT guarantee that consumers will receive their order on the day they placed it.
Same-day shipping is often used as a marketing pitch to entice consumers who want to receive their orders as fast as possible. However, this can be very misleading.
The delivery speed depends on the shipping method used, and how quickly an order can be processed and fulfilled. So, even if an order is shipped the same day, it could still be 2-3 days before the customer actually receives it.
If your customer is expecting same-day delivery only for it to be ‘delayed’, it’s likely that they’re going to be pretty unhappy – especially if they’ve paid extra for this service.
It’s very important that the shipping page on your website clearly states the timeframes for different delivery options. Using a term like ‘next-day delivery’ or ‘two-day delivery’ is much more accurate than focusing on the shipping timeframe. It’s best to reserve ‘same-day’ only for services that are actually guaranteed to arrive on the same day as ordering to avoid confusion.
Now that we’ve set the scene for the rise of same-day delivery, the question remains: Should you be offering it?
While the obvious answer might be ‘yes’ due to rising consumer demand, it might not actually be within your best interests as a business.
Here are some questions to ask yourself to determine whether same-day delivery is right for you and your customers:
Same-day delivery is most successful when your customers are clustered within one or more large metro areas where you have a facility. This means shorter last-mile delivery times and low carrier fees because goods are only traveling a short distance.
But if your customer base is widely dispersed across multiple regions, same-day delivery is unlikely to be cost-effective – or feasible – for your business. If some of your customers are located in rural areas a long way from your warehouses or major transportation routes, it’s highly unlikely that you’ll be able to make a same-day delivery guarantee.
As we’ve said before on this blog, there’s no such thing as ‘free’ shipping. The bill needs to be footed by someone – and you need to decide whether it’s going to be you or your customer.
While customers have traditionally shown reluctance to pay for shipping, many are showing a willingness if it means they get their order faster. A study by Statista found that nearly half of U.S. consumers would pay extra for same-day delivery – but only if the cost was no more than $10.
As a retailer, you need to shop around carriers to see whether or not you can keep same-day delivery costs low enough to entice consumers. This depends on a variety of factors, such as customer locations, or whether you’re shipping high enough volumes to qualify for a carrier discount.
Offering same-day delivery en-masse when you only have a single facility is a very precarious business; even with a highly optimized operation, it only takes adverse weather or a power outage to completely derail your fulfillment efforts. To achieve same-day delivery capabilities, you need to operate robust local fulfillment networks.
Furthermore, your shipping costs are likely to vary between orders by a large margin – especially when your facility is serving a large geographic area. This makes it a lot more difficult to create a cohesive shipping strategy that takes into account variables between orders.
By using a network of micro-facilities, you can allocate your orders to whichever location can deliver to your end customer the fastest. This could involve turning strategically located stores into partial fulfillment centers or partnering with a fulfillment provider who has a nationwide network of warehouses at their disposal.
A successful last mile is critical to seamless delivery. But with same-day delivery, you have even less margin for error. If your customer is going to receive their order as promised, you can’t afford to fall foul of traffic congestion or ineffective travel routes that could prevent one or more of your orders from reaching their destination on time.
Investing in some route optimization software ensures that your drivers are only using the most efficient routes when making delivery drop-offs. You should also consider notifying your customers by SMS or email when their order has been dispatched to minimize the odds of a failed delivery attempt.
When you’re considering same-day delivery, it really comes down to one question: Can you actually deliver?
Putting same-day delivery on the books to attract customers is all very well – until you start having to field messages from frustrated customers asking where their order is. There are few things that drive customers away from a brand more than a delayed delivery, so if you’re going to jump into this space, you need to be absolutely certain you can make it work.
That’s why it’s a good idea to partner with an experienced omnichannel fulfillment provider who can give you the infrastructure you need to make same-day delivery a reality. Whether it’s optimized picking and packing for faster fulfillment or leveraging carrier relationships for more affordable shipping, partnering with a 3PL is key to ensuring the very best delivery experience for your customers.
By taking this weight off your shoulders, you can focus on ensuring that your business is making the most of its growth opportunities. Make same-day delivery a reality today!
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