Monthly Archives: March 2016

Same-Day Delivery Can Boost Overstock’s Revenue

same day delivery

same day delivery

When a company is competing against so many giant e-retailers, it’s vital to be generating all of the revenue that you can get.  Overstock.com is one of those retailers that is solely online and every sale counts.  Recently, Internet Retailer took a look at Overstock and the numbers for the retailer in last year’s fourth quarter.

Overstock.com’s revenue last year equated to an increase of 10.7%.  The figure came out to $1.66 billion, which is up from $1.50 billion in 2014.  Yet, the e-retailer’s sales growth was slower during the fourth quarter, going up by only 2.1%.  This is up only $480.3 million from $470.4 million the prior year.

Also, a key figure was that the company’s gross profit in the fourth quarter went down 2.7%, equating to $83.1 million, down from $85.4 million in 2014.  Most retailers, whether online or brick-and-mortar, are expecting sales to pick up during the last quarter of the year, considering revenue that’s generated between Thanksgiving and Christmas.

The article discussed the reasons for the slow growth.  A source for the low revenue could have been due to Overstock’s increasing popularity of its’ multi-tiered Club O loyalty program.  It mentioned how in the e-retailer’s filing with the U.S. Securities and Exchange Commission, Overstock changed Club O into a two-tiered system, silver and gold, that allows shoppers to earn rewards instead of coupons, which may have hurt Overstock’s short-term sales.  The shift could have caused some shoppers to not receive their immediate gratification that coupons provide.

Overstock.com commented on the impact of moving away from coupons to a rewards system, which is a change for shoppers.  Overstock stated, “We believe that the shift from coupons to rewards will benefit us in the long term, but we have experienced some difficulties with the transition, and in the short term we believe it slowed our revenue growth as customers take time to become accustomed to this change.  We are continuing to test and refine our approach in this transition.”

Also, another interesting stat was Overstock’s partner revenue.  During last year’s fourth quarter, Overstock.com’s partner revenue increased to $446.7 million.  This is a 4.4% jump from $427.8 million in 2014.  Partner revenue involves Overstock orders that were fulfilled by other retailers that sell on its’ website.  Physical stores is a prime source for e-retailers to get their online orders fulfilled.  Beyond the actual order, a number of retailers are seeking to initiate Same-Day Delivery to get shoppers to get their online items even faster.  Amazon, Google, Macy’s, and more have all brought a higher level of order fulfillment.

E-retailers like Overstock are implementing strategies to capitalize on online shopping.  The industry is forecasted to reach to $500 billion by 2018, therefore, there is revenue ahead to gain for the retailer that can create the right mix of offers and services.  AQuickDelivery is an Atlanta Courier that can help create the value-added services that shoppers are looking for that meet the growing convenience demand.  Overstock has the rewards program to benefit the company long-term, yet the addition of same-day delivery can build online revenue as well.  The Same-Day Courier supports multiple companies nationwide with order fulfillment and can do the same for Overstock.

Reference: 2.10.16, www.internetretailer.com, Matt Lindner, Overstock.com’s sales grow 2.1% in Q4, 10.7% for the year

Kate Spade Expands Online, Offers Store Pick Up Services

Online ShoppingKate Spades had “great success with our buy online, ship from store” program, which allows us to sell more full-price product while capturing incremental sales and managing our inventories efficiently,” said CEO Craig Leavitt in regards to the luxury apparel and accessory manufacturer’s buy online, store pick up option offered during the holidays last year.  The results the company had were so well, it appears Kate Spades feels its’ time to take shopping online to another level.

In the article by Internet Retailer, Kate Spade has announced it is planning to launch a buy online, pick up in store service later this year.  Spades did not state how many of the 175 stores will participate worldwide with the new upcoming program.  The fourth quarter numbers during last year’s holiday season provided all the proof Spades needed to officially implement the service.  Net revenue last year increased to 7.6% to $429.0 million, from $398.6 million the previous year.  Sales from Kate Spade North America reached $371.3 million, up 13.7% from $326.7 million.

Also, sales from Kate Spade International of $52.1 million, down 13.3% from $60.1 million last year.  The retailer’s net income went drastically down as well to $61.5 million, a 51.4% drop from $126.5 million the previous year.  This means that along with the positive numbers, Kate Spade had some negative ones, and maybe the online order and store pick up program will aid in creating the upswing in net income its’ looking for.

Investing into online retail is indeed the direction that companies, especially retailers, need to go in.  Spade chief operating officer George Carrara said the company is looking to blur the lines between offline and online shopping as consumer preferences evolve.  He said, “We know that regardless of which (way) she actually transacts, whether that’s online or in a store, that that journey is increasingly starting in the online space, which is certainly advantageous to us in terms of our ability to tell great stories and build engagement in the online experience”.

Other big name companies have opted to provide in-store pick up as well.  With 885 stores nationwide, it makes sense for Macy’s to exhaust every online option to move product from its’ physical stores.  Online order and store pick-up services makes shopping more attractive and convenient for Macy customers, especially its’ repeat customers.  Macy’s not only offers in-store pick up options, but also Same-Day Delivery.  Macy’s has strategically partnered will Deliv to provide same-day delivery in several major US cities, including San Francisco, Los Angeles, San Jose, Houston, Seattle, Washington DC, New Jersey, and Chicago.  Bloomingdale’s, its’ sister company, also offers the service in San Francisco, Los Angeles, San Jose, and Chicago as well.

Several retailers and e-retailers have turned to same-day delivery to attract shoppers online.  A Same-Day Courier like AQuickDelivery is a viable delivery company to partner with for last-mile services.  From store deliveries to customer returns, the Atlanta Courier can do it all.  If Kate Spade’s new program goes well, same-day delivery could be next.

Reference: 3.7.16, www.internetretailer.com, Matt Linder, Kate Spade will launch buy online, pickup in store

With Same-Day Growth In India, Will Snapdeal Keep Up On-Time Rate?

Online shoppingNo more is Same-Day Delivery highly sought after in the US.  It has spread to a number of thriving countries in the world, showing that online retail is making the business world smaller and customer reach more extensive than ever before.  Online retail is forecasted to hit $500 billion by 2018.  In the US alone, same-day delivery is expected to reach $987 million by 2019, which will probably be even more globally.  With the pace of technology growth, shoppers are going to gain access to faster online purchasing.  This mix will ultimately take same-day delivery into more of a global staple component to e-commerce.

One critical implementation within same-day delivery is the ability to establish on-time service as it grows.  Snapdeal is one company in India seeking to expand its’ same-day service, which will effect 600 towns there.  First Post recently reported how Snapdeal has partnered with dPronto in order to provide same-day delivery across India.  The purpose behind Snapdeal’s partnership is to enable the e-commerce company to reach a larger customer base.  Snapdeal raises $200 mn in fresh funds led by Canada’s Ontario Teachers’ Pension Plan as well.

Snapdeal has an on-time success rate of 90% with same day delivery, and it’s looking for dPronto to keep it there, even make it better.  DPronto is a last-mile delivery company with a niche for working with e-commerce companies, including hyperlocal market places.  The article mentioned that the dPronto offers last mile logistics services for e-commerce companies by leveraging trained fresh manpower supply, disruptive technology and efficient processes that minimize delivery turnaround times and optimize costs.

DPronto will train its’ delivery staff to pick up packages from Snapdeal’s sellers and/or fulfillment centers for same-day deliver same to Snapdeal customers.  One key contribution that this move is making that the partnership will create jobs for kids in India.  Ashish Chitravanshi, Vice President, Operations at Snapdeal, commented in the report, “dPronto’s initiative of empowering the less privileged youth by making them employable is highly commendable.  We are excited to be partnering with them to further strengthen our last mile delivery capabilities as we remain committed to our promise of catering to every customer in every pin code.”

With the expansion of servicing a large amount of additional cities there, coupled with the hiring of new employees, Snapdeal will have the challenge of maintain on-time deliveries, as well as accuracy.  Same-day delivery is a time-sensitive based service and the companies that can master it on a large scale with be the ones trusted by shopper markets the most.  Within the US, AQuickDelivery is an example of an experienced Atlanta Courier that retailers partner with in Georgia area, yet at the same time, has the reach to implement a nationwide same-day delivery program.   The Same-Day Courier has the driver fleet and courier technology to help any large retailer to have on-time delivery success.

Reference: 3.3.16, www.firstpost.com, FP Staff, Snapdeal partners with dPronto to expand its customer base for same day delivery

Google Launches Same-Day Grocery Service

google grocery deliveryAmazon Fresh has been steadily growing for a while, yet here comes Google Express officially launching Same-Day Delivery of groceries.  The Wall Street Journal (WSJ) Google has begun delivering produce, meat, eggs and other perishable goods in parts of San Francisco and Los Angeles. The service is part of Google Express, which partners with retailers in some U.S. cities to deliver goods to consumers fast, even with a few hours.

Last year, Google began testing the service, delivering foods like fruits and vegetables in the San Francisco Bay Area.  The retailer’s plan was initially to  partner with large grocery store chains like Costco and Whole Foods.  A grocery store like Whole Foods engages in bulk food orders, which Google will then pick up and delivery them.  Now, Google appears to have moved beyond the testing into rolling out the actual same-day grocery services for not only Whole Foods and Costco, but Smart & Final and upscale Vincente Foods as well.

The article stated how the same-day grocery results haven’t been the best thus far.  Google competitors, such as Amazon, Instacart, Fresh Direct LLC, and Safeway Incorporated, have found it challenging to profit from it due to high delivery costs and historically low profit margins of roughly 2% on grocery sales.  It also mentioned that when the internet was slower and spottier, Webvan Group Inc. loss $800 million before filing for bankruptcy in 2001.

Google’s reason for deeper expansion into same-day grocery delivery is Amazon.  Amazon’s same-day grocery delivery, Amazon Fresh, is available in Seattle, Los Angeles and others.  Free same-day service is now in Seattle and California.  More cities will probably be added for free, such as San Francisco Bay Area, Baltimore, Boston, Dallas-Fort Worth, Indianapolis, Phoenix, Philadelphia, San Diego, Tampa Bay, Washington DC, New York, and Atlanta.

The pricing for the new Google service involves raising the minimum size for an order including fresh groceries from $15 to $35.  Google Express members pay a $95 annual fee per year.  For Google Express members, fresh-food deliveries will cost only $3 an order, in comparison to $0 for most deliveries of non-perishable goods.  Non-Express members will pay $5 per order.

Google is establishing a same-day grocery service that is in line with the shift of today’s e-commerce, which is affording shoppers the ability to get their food items fast.  Companies can partner with a Same-Day Courier like AQuickDelivery to pick up and deliver groceries to customers.  The Atlanta Courier has the courier expertise to create same-day solutions to effectively grow within the online market.

Reference: 2.17.16, Wall Street Journal, Jack Nicas/Ben Bensinger, Google Launches Fresh-Grocery Deliveries

UPS Has It’s Sights On Same-Day Delivery

UPS TruckIt doesn’t take a genius to know that as Amazon goes with Same-Day Delivery, so does everyone else, even UPS.  Business Insider recently reported that UPS has made a strategic investment into start-up company Deliv in order to study the same-day delivery model and see how that market segment evolves.  UPS is the world’s largest package delivery company, and there must be a defining shift that’s taking place for UPS to finally begin in-depth analysis of same-day delivery.  More than likely, UPS is studying the service, and then, decide whether it will be profitable to dive in.

UPS’s managing director of the UPS Strategic Enterprise Fund, Rimas Kapeskas, commented about the move in the phone interview.  He stated, “We don’t participate in the on-demand business as much, and the consumer side of this is still a bit of a mystery to us.  This is a rapidly evolving marketplace and we thought we could learn more by being close to it.”  This is the venture arm of UPS, which is leading a $28 million funding round for Palo Alto, California-based Deliv.  The articled stated that UPS hasn’t been disclosed the investment size, yet UPS will take a minority stake in Deliv and sit in on board meetings.

“We are solving a different problem in the last mile,” Deliv Chief Executive Daphne Carmeli said in a phone interview as well.  She went on to say, “and they (UPS) are looking to learn that model and looking to learn about growth in same-day delivery as we are interested to learn from their success.”  Both are interested in learning from one another, which will ultimately help both companies compete with Amazon, which is the trailblazer among all online retailers.

One reason that UPS is diving more into offering similar services like Amazon is because Amazon is doing the same.  The retail leader is planning to develop a global delivery network, beginning in China, that will put it in direct competition with UPS and FedEx.  Online package deliveries is big for Amazon also and China’s e-commerce is expected to reach $1 trillion by 2020, meeting the demand of 900 million shoppers.  With its’ own global delivery network, customers won’t have to rely on UPS, FedEx, DHL, and others.  They will be able to ship directly via Amazon.com.

The e-retailer has began to flood the online market with not on the popular service, also offering the service for free is various major US cities.  Last year, Amazon launched free same-day delivery last year in 14 metropolitan cities the US, beginning with California cities.  It also has same-day delivery in the San Francisco Bay Area, Seattle-Tacoma, Dallas-Fort Worth, Indianapolis,  Philadelphia, Baltimore, Boston, Phoenix, San Diego, Washington DC, Tampa Bay, Atlanta, and New York.

UPS has a fight on its’ hands when it comes to Amazon, Google and a host of others that have set the pace with same-day delivery.  It’s clear that package delivery begins with the order, but ends at the front door-convenient and fast.  Many companies are partnering with a Same-Day Courier like AQuickDelivery to implement same-day logistics within their respective markets.  This Atlanta Courier has the courier expertise and driver fleet experience to help companies be successful at same-day delivery.

Reference: 2.22.16, businessinsider.com, Nick Carey/Mari Saito, With Deliv investment, UPS hopes to study same-day delivery market