Where’s the eCommerce Delivery Choice?
Today, consumers have a few options when it comes to how they want their online purchases delivered. The service level choices are typically next-day, second-day, or economy, all of which are offered by FedEx, UPS, and the US Postal Service. Omni-channel retailing, which ties together online shopping and local retail stores, is leading to the emergence of new delivery options. Retailers are also being pushed by eBay, Amazon, and Google. Storefront pickup, hotshot (delivery within a few hours of ordering), AM/PM (order it in the morning, and receive it that same afternoon), and scheduled delivery are all new service-level options that are emerging for consumers.
Once a retailer ties its local store inventory to online shopping, it’s ready to offer storefront pickup (also called “will call” or “buy online and pick up”). It is also ready to offer a variety of other service levels, all of which are accomplished through local delivery programs. eBay Now offers one-hour delivery, and Google Shopping Express offers an outstanding scheduled delivery experience.
My bet is that all of these players will eventually offer the more cost-effective AM/PM same-day delivery service and charge a premium for the others.
How these local delivery programs that leverage local inventory are going to be rolled out remains to be seen. UPS and FedEx do not offer these services and have labor forces and infrastructure that don’t match up well (sort centers, scheduled line hauls, and aircraft are no help in local delivery). Dedicated fleets are a possibility for very large retailers with high online sales volume.
More likely is the use of the local delivery industry, which already provides all of these programs, for companies such as Grainger who are selling to business buyers. Delivery service choice for e-commerce is a great thing for consumers, but who are the losers here? That would be online retailers with no local inventory and retailers that fail to leverage their local inventory.