Same-Day Delivery: From Competitive Advantage to Must-Offer Service
Traditionally, consumers have had several options for getting their online purchases delivered, including next-day, second-day and economy, all of which are offered by FedEx, UPS and the U.S. Postal Service. However, the rise of omnichannel retailing has lead to the emergence of new delivery options, including storefront pickup (also called “will call” or “buy online and pick up”), hot shot (delivery within a few hours of ordering), AM/PM (order it in the morning and receive it that same afternoon) and scheduled delivery.
Recent initiatives by eBay, Google, Wal-Mart and the U.S, Postal Service, coupled with the growth of Amazon Fresh, which boasts “same or next-day delivery of almost everything you want to buy — from fresh produce, meat and seafood to diapers, DVDs and toys,” have made it clear that same-day delivery is here to stay. In fact, it’s increasingly become an option consumers not only turn to and pay a premium for, but now expect to see.
To stay competitive in this new market, here are the seven key steps retailers must take to begin a functional same-day delivery program:
1. Adopt an omnichannel management approach. Same-day delivery requires integrated planning and coordination between e-commerce and retail stores. Prices must be aligned and centrally maintained, loyalty information shared across channels, goals set and shared across the various arms of the business, and incentives must be consistent throughout.
2. Gain real-time inventory knowledge across your enterprise. In order to realize the opportunities inherent in the omnichannel retail model, companies must upgrade their inventory systems to enable centralized visibility across the enterprise; take very frequent inventory counts; increase safety stock levels; and integrate their point of sale, inventory and e-commerce ordering systems so they know exactly which products they have in real time.
3. Expand your fulfillment strategy. The fulfillment strategy determines where you gather the product that’s just been sold, which is why local inventory knowledge and integrated systems are so crucial to any same-day delivery process. After analyzing regional sales volume, a company may decide to create “hub stores” or “micro distribution centers” from which all deliveries to certain ZIP codes are fulfilled.