The Secret to Same-Day Delivery: When Overnight Isn’t Fast Enough
In the 19th century, The Pony Express could deliver mail across the United States in 10 days. In the 1970s, FedEx popularized overnight delivery by bringing all its packages to a hub and flying them to its local location that night. More recently, Zappos and Amazon’s Prime Service made free two-day shipping the industry standard. At the same time, the U.S. Post Office (USPS) has struggled to keep up with similar services. While USPS delivers mail to more locations than ever before, total volume has dropped by 30 percent since 2006. Unfortunately for this agency, the cost of delivery is largely fixed.
Because of the Internet and cell phones, consumers are getting more impatient and want the products they order to be delivered to their homes or businesses "now." I remember when my children were younger, they struggled to understand why a toy that was just ordered on the Internet couldn’t be downloaded "right now." (I explained the bandwidth issue!) In this 24/7 world of immediate gratification, companies are being forced to offer a same-day delivery service.
This was first tested in 1998, when a few Internet startups like Kozmo.com delivered a limited list of items ordered on the Web within an hour. Now, large companies like Amazon, Walmart and eBay are using robots and military style algorithms to offer same-day delivery to customers for an additional charge of $5 to $10. At Walmart, orders placed by noon within a pilot metropolitan area can be delivered four to eight hours later. In its system, local retail stores become mini inventory warehouses for product fulfillment. This system can go national, since 60 percent of Americans live within five miles of a Walmart store.
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At Amazon, orders received by 10:30 a.m. can be filled by one of their large distribution centers picked by robots. They are then packed and put on a third-party truck for delivery. (Amazon has also tested using USPS mail delivery trucks for same-day delivery through its Metro Post service.) In some cities, 7-Eleven has even installed Amazon delivery lockers for customer pickups. eBay implements a different model using an urban city as its warehouse, where streets are aisles and individual stores are shelves. This system sends couriers to local chain stores to pick up items ordered via the eBay Now app. Many products can be delivered in less than two hours.
Small businesses don’t have big warehouses or an army of robots and employees. What can they do to be competitive and deliver more quickly?
1. Use a third-party service for same day delivery.
Smartphone apps such as Task Rabbit and Postmates can deliver anything inside a given local geographic location for a flat fee of $10. Bike messengers can also be used in large urban cities for quick delivery.
2. Minimize handling time.
A lot of time is wasted handling a product before it actually gets shipped. Streamline the process from when a customer completes an order to when it actually reaches a third-party shipper.
3. Maximize ordering time.
Provide an ordering window closer to the time when the last UPS or FedEx pickup is or their closest shipping office closes. This can sometimes be as late as 8:45 p.m. for next morning delivery.
Have your customers asked for same-day delivery service, and how do you provide it?
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