Monthly Archives: April 2015

Same-Day Delivery Versus In-Store Pick Up

Atlanta CourierRecent eBay moves suggest that the web-based retailer is headed toward focusing on in-store pick up versus same-day delivery.  In contrast, other e-retail leaders like Google and Amazon have all made heavy investments that emphasize same-day delivery with no signs of turning back.  The question is will either service weigh in more to bring retailers the piece of the market they are looking for.

The business will be there online in years to come.  Online retail has steadily grown annually at 16% and experts forecast it will reach $500 billion by 2018, as mobile technology creates the online purchasing convenience that wasn’t present a decade ago.  Also, the innovation of logistical algorithms is allowing companies to optimize costs and create efficient same-day deliveries.

Yahoo Finance discussed recently how eBay is turning from same-day delivery toward an in-store pick up focus.  EBay bought delivery start up Shutl late last year with plans to expand its’ same-day delivery program.  In December last year, however, eBay officially pulled it’s same-day service eBay Now from being a stand alone app, into an integration within its’ main mobile app and website.  With the app, customers shopped with it from local retailers and then had their online purchases delivered same day for $5.

This has been the benchmark fee for last-mile deliveries by other physical store and web-based retailers.  Macy’s launched same-day delivery late last year in 8 cities and set its’ pricing at flat rate of $5 for orders over $99.  Even Ace Hardware announced that it will be testing same-day delivery in 33 of its’ 4,400 stores in select cities in the US, including Arizona, Illinois, Colorado, Maryland, Texas and Florida for a $5 fee.  Apparently, eBay isn’t seeing why it should go on with same-day delivery, at least for now.

EBay recently signed a deal with Woolworths in Australia and previously with Argos in the UK to allow shoppers to make purchases on its’ site and then pick up at their stores.  This could be the future direction for eBay to meet customer demand.  In the article, a Harris Interactive survey of 2,241 US adults showed that 70% of consumers don’t want to pay extra for overnight or same-day delivery.  Shoppers are then more apt to simply go to the local store and pick it up, rather than pay to have someone deliver to their front door for a fee.

To the customer, the core difference between the two service options is the fee.  However, what if there was no charge for same-day delivery?  Wal-Mart’s “Wal-Mart To Go” in Canada offers same-day service free in some Canadian areas to gain market share and compete against Amazon.  In-store pick up may be free, however, shoppers will weigh in with their value on time and gas spent on a drive to the store versus allowing a retailer to drop it off for $5.  Many retailers partner with a same-day courier like AQuickDelivery to perform the actual deliveries.  The Atlanta courier can return defective items as well.

Same-day delivery versus in-store pick up, although different, have one thing in common–a shopper.  Both services will mean different things to each customer and they will have their place whenever the shopper needs one the most.  Mall retailers are also testing the same-day delivery and in-store pick ups in order to increase online traffic and in-store sales.

Reference:  3.9.15, Yahoo Finance, Patricia Garner, Why eBay is not interested in same-day delivery

Macy’s Seeks To Expand Same-Day Delivery Again

Atlanta CourierThere are a lot of retailers jumping into same-day delivery and one of the frontrunners to make it work is Macy’s.  Experts feels the department store leader has all the right pieces; however, its’ sales numbers this past quarter have went down.  It is no wonder why Macy’s has announced more service expansion to see if same-day delivery will be the right idea to improve short-term and long-term sales.

CBS News talked about how Macy’s has announced that it will be moving its’ fulfillment center in West Sacramento, California, to a larger facility to gear up for expected sales increase ahead.  Macy’s stated in the report that it expects capital expenditures to hit $1.2 billion this year, up from $1.07 billion in 2014.  It’s net income in this year’s first quarter fell to $793 million, or $2.26 per share, compared to $811 million, or $2.16, last year.  In the US, Macy’s operates in 45 states with 840 stores.

Demand appears to be driving Macy’s to push same-day delivery.  With the emergence of mobile tech gadgets, shoppers can order their online items fast and would like to get them just as fast also.  Online retail is forecasted to grow to $500 billion by 2018, and retailers are racing to position themselves for the increase.  Macy’s and others plan to compete, not only on the online pricing front, but also with the convenience that same-day delivery provides.

Big e-retailers like Amazon have spent billions on essentially a closer reach to their customers.  Amazon has added 50 more warehouses to accommodate its’ delivery model.  It also opened its’ very first physical store location in Manhattan, right in the heart of New York, including same-day bike service there, right before last year’s holiday season as well.  Macy’s is making the decision to pour big investments into the last-minute service.  Morningstar analyst Paul Swinand stated in the report, “It might be great when they kick it off, but I don’t know if it’s going to pay off in the long run since everybody is going to do it.  To me, it’s still a business model that’s a work in progress.”

“Their apparel — especially their women’s apparel — has been challenged lately,” said Consumer Edge Research analyst Stacie Rabinowitz, adding that many other retailers have the same problem. “Women are buying less clothes. … Macy’s is definitely not a position to accelerate their topline overnight. They have a lot of ideas percolating right now. … We are going to see some surprising and positive things from them down the line.”  With all of the expansion, Macy’s same-day delivery outlook must be favorable.

Late last year prior to the holiday season, Macy’s launched testing of same-day delivery in 8 major US cities, including San Francisco, Los Angeles, San Jose, Chicago, Houston, Washington DC, New Jersey, and Seattle.  Sister company Bloomingdale’s rolled it out in 4 of those cities:  San Francisco, Los Angeles, San Jose, and Chicago.  Competing with other web-based and physical store retailers in those same cities, Macy’s followed suit with a fast same-day delivery window time for all online orders placed by 1pm.  Orders must be placed by 11 am on Sundays.

A same-day courier like AQuickDelivery is a delivery partner for retailers to perform their actual same-day deliveries fast.  E-retailers can implement a same-day delivery program with the Atlanta courier and grow their online business.  As Macy’s and other retailers grow, it’s going to make sense to partner with a courier that can expand quickly and efficiently also.

Reference:  2.24.15, CBS News Money Wathc, Johnathan Berr, Macy’s: Can same-day delivery deliver results?

Ace Hardware Goes Same-Day Delivery

Atlanta CourierWhen it comes to tools, we all think of Ace Hardware.  Now, we’ll also think same-day delivery.  Yep, Ace has gone same-day.

The Chicago Tribune reported Ace Hardware has launched testing for same-day delivery in 33 store locations throughout the US.  Those cities consist of Florida, Illinois, Colorado, Maryland, Texas and Arizona. Ace has 4,400 stores in the US and this is only the beginning of more store roll outs to come.  This is expected when it comes to same-day delivery, as a testing phase allows companies to work out any kinks, and also tailor the service and pricing for flat fees.  Ace has stated that same-day delivery will be an extension of its’ buy online and pick up in store service, which is available at 1,600 Ace stores.

More than likely, as same-day delivery is launched at more stores, Ace Hardware will expand online pick up.  Most retailers offer same-day service as an additional option, resulting in the creation of omnichannels for a seamless shopping experience.  As far as the delivery aspect of same-day delivery, most brick-and-mortar retailers partner with a same-day courier like AQuickDelivery, which already has the logistical expertise to ultimately minimize transportation costs.
Costs indeed are the core drivers for a successful same-day delivery program, as they will affect service pricing.  The $5 mark has, in most cases, been found as the ceiling amount shoppers will pay for the service.  However, membership fees have made customers more flexible.  Google Express, formerly known as Google Shopping Express, charges $4.99 per order or customers can pay $10 per month and $95 annually.  Amazon offers Prime members same-day delivery for $5.99 and Non-Prime members pay a fee of $9.99 for the first item and $.99 cents per additional item.  Wal-Mart even offers same-day delivery in multiple US cities and Canada. Walmart To Go costs $10, regardless of the order size, and to compete with Amazon, the service is free in some parts of Canada.

Department store leader Macy’s same-day service is priced at a flat fee of $5 for orders over $99.  Shoppers with smaller orders pay standard shipping rates, plus the flat rate.  Macy’s launched the same-day delivery late last year in 8 major US cities, including San Francisco, Los Angeles, San Jose, Seattle, Houston, Chicago, Washington DC, and New Jersey.  Bloomingdale’s launched the service in some of those cities also.  There is a $5 fee.

Ace has the same advantage of Wal-Mart.  The hardware store has multiple locations that are local, in reach to customers and can be utilized as warehouses for last-mile deliveries.  For a $5 fee, which will be Ace Hardware’s same-day delivery charge, a small travel radius will help create profit from it with consolidated orders.  A store associate will make the deliveries.  AQuickDelivery is an Atlanta courier that is a viable option for retailers that opt not to take their store associates from their daily operation.

Amazon, a web-based retailer, has worked hard to position itself with local inventory via massive, strategic order fulfillment centers.  Time will tell whether Amazon will build more physical store locations, as it opened its’ first store in Manhattan, New York late last year.  Ace Hardware can expect to see its’ numbers jump making getting tools a convenience.

Reference:  2.17.15, Chicago Tribune, Alexia Elejalde-Ruiz, Ace Hardware tests same-day delivery near some stores