Same-day delivery has transformed the way we perceive online shopping. With the change of perception has come a change in expectations, and speed that was once considered a luxury is more often than not taken as a matter of course.
While this service is great news for shoppers, is it equally positive for the other end of the chain, the businesses? The question smaller companies need to ask before diving into the trend with the retail giants is whether same-day delivery is an improvement that benefits the business as a whole or simply a waste of resources.
In an attempt to answer this question, this article will explore same-day delivery from its roots to its present form, from both the customer’s and the business’s perspective.
A Trend That Started with Sacrifice
This story, as any other great epic, begins with a sacrifice. According to a 1992 Supreme Court ruling, only companies with a physical presence in a given state were required to tax their customers in that state. Thus, for many years Amazon enjoyed the unprecedented advantage of offering cheaper merchandise than its competitors. This did not go unnoticed, and many states and businesses continually fought to revoke the law.
In 2012, to everyone’s surprise, Amazon put a stop to the sales tax war.
Why would anybody give up such an advantage?
Paying taxes allowed Amazon to open warehouses anywhere, including the largest metropolitan areas in the US, allowing them to get much closer to their customers. Their new goal was immediate delivery. Back then, we all asked whether Amazon would be able to pull it off.
Today, thanks to the success of Amazon Prime, we know this was a risk well taken. In fact, in 2016, Amazon launched 23 new fulfillment centers. They intend to invest even more in warehouses and logistics in 2017.
If Amazon was willing to sacrifice tax advantage in favor of same-day shipping, it must be worth the hassle, right? The truth is, it was worth it—for Amazon.
Small and medium businesses face an unearthly challenge when attempting to repeat the success on their own. Let’s face it, quick delivery is a huge logistics pain point riddled with complexity and variables. So, can they escape it?
Raising the Bar
Inadvertently, Amazon managed to raise the bar of customer expectations of online shopping. Same-day delivery not only inspired more people to shop online, it also inspired consumers to shop more often. Already in 2014, users of same-day delivery services were shopping more often (once every three months on average) than shoppers who opted for other delivery options. In fact, 11% shopped once a week and 6% more than once a week.
More recent surveys reported that 49% of surveyed shoppers are more likely to shop online if same-day delivery is available and 61% of consumers are willing to pay extra for it. There is no question that the perception of what qualifies as fast shipping is…