Many big name retailers coast-to-coast are doing all they can to unlock the benefits of same-day delivery. Investments are pouring in from Amazon, Google, Macy’s, Target, eBay, and even the recent Barnes & Noble move to heighten sales. Online retail has increased annually 16% and as the holiday season rolls in, retailers are trying to stake their claim in the market as the best, cost effective option for the service. Same-day delivery is what is driving Amazon’s growth into a number of major US cities, including Atlanta. This is without question a remarkable flood of mobile technology like never before and shoppers can indeed order from anywhere.
This has caused a greater demand to fulfill online orders fast with the convenience factor that shoppers enjoy. Google and Amazon have even gone a step further then just same-day delivery via people, but same-day delivery via drones. Amazon has stated its’ goal is the have same-day drone delivery implemented by 2015. Amazon CEO Jeff Bezos even appeared on 60 Minutes last year touting that same-day delivery drones is high on the e-retailer’s list and it will happen. Drone use would definitely pioneer a service level path never experienced in the business world, yet there are those that question is this really feasible. UPS is one of those companies.
In a recent report by Yahoo, UPS stated its’ opinion on the feasibility of same-day delivery and drone use. UPS delivers 17 million small packages per day and based off its’ know-how, differs from the buzz that same-day delivery will work. UPS even is a carrier for Amazon, as the retailer even performs same-day delivery under certain conditions. If it isn’t scalable now, why would it be with the addition of drones? However, the report stated UPS could in fact be considering drone-use, yet this is not known for sure if UPS is taking their crack at the service.
The service is nothing short of convenient and brilliant, however, UPS’s Alan Gershenhorn states the cost of it is the real issue. “We have a pretty robust service called Express Critical that serves the same-day needs in the marketplace”. he stated. In UPS’s case, same-day shipping is something it has wrestled with whether consumers would spend the money on it. UPS worked with comScore to produce the numbers on what customers deemed more important: free delivery or speed. ComScore found that 81% of the people survey preferred free delivery over speed. Only 35% valued expedited shipping options, which for UPS shows the company that it won’t make sense for their business model and it may not for others.“Same day by definition is something that everyone is trying to figure out right now because that’s the buzz in the market. It’s unsure if it’s scalable, especially if it’s a point-to-point delivery,” stated Bala Ganesh, head of retail at UPS, in the report. Ganesh’s main point here involves the cost effectiveness of point-to-point delivery, such as a pick up at Target and then, delivering the item to the customer’s front door. UPS feels this service type is inefficient, which is resulting in same-day delivery’s higher charges.
The carrier may have its’ points, yet it appears that same-day delivery must be feasible for other large companies with various factors in place. Large investments by web-based retailers and brick-and-mortar stores to make same-day delivery a normal part of shopping. Retailers are also partnering with a same-day courier like 1-800 Courier for delivery cost savings, instead of performing the deliver themselves. The San Jose courier has services nationwide and has the logistical expertise to implement a same-day delivery solution that is feasible and cost-effective.
Reference: 10.7.14, Yahoo Finance, Shawna Ohm, Same-day shipping & drone delivery may not be feasible: UPS
