Recent 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