Same-day delivery is retail's new frontier

How sweet it would be to make an online purchase in the morning and receive a package that afternoon. That's nearly instant gratification.

By MSN Money Partner Jan 10, 2013 1:20PM

This post comes from Summar Ghias at Dealnews.

 

Dealnews logoEver purchased something online from the comfort of your home, only to wish your retail therapy had provided you with more instant item-in-hand gratification? We have good news: You won't have to wistfully twiddle your thumbs for days anymore, as major retailers are feeling the push to dole out various iterations of same-day delivery.

 

Image: Delivery © George Doyle, Stockbyte, Getty ImagesInstant access to online orders has become a battleground for retailers, as it affords them a means of beating out the competition. And this translates into comfy at-home pajama-clad shopping, while you marvel at the speed at which your purchases are delivered to your door.

 

While Amazon Prime users have enjoyed two-day shipping since 2005, same-day delivery on a grand scale has proved to be far less cost-effective. In 2009, the online giant launched same-day delivery (what they call "local express delivery") in 10 cities including New York, Boston and Washington, D.C., but never expanded further. Now, rumor has it that Amazon is gearing up for a broader launch as it opens warehouses across the country.

 

However, this time around, Wal-Mart, eBay and several others (including non-retailers) are not far behind. By utilizing third-party carriers, local stores and warehouses, or partnering with brick-and-mortar shops, these major players are looking to up the ante for customers who are no longer satisfied with standard mail.

 

Here's how you can expect to see your delivery options change in the coming year. (And if you're lucky enough to live in San Francisco, you might have access to several of these methods already.)

 

Amazon wants to shave a day off delivery

Speculation abounds with regard to Amazon's next move, but one thing is clear: The online retailer remains the competitor to beat. With service in 10 cities already in place, and more warehouses to open across the nation, and with talks of delivery lockers at partner stores such as Staples and 7-Eleven, Amazon company executives told The New York Times they'd be able to cut as much as a day off of two-day shipping times. You do the math.

 

EBay taps chains for delivery in two coastal cities

EBay launched eBay Now last August in San Francisco, and expanded the service to New York City in November. The pilot project involves partnering with Macy's, Target, Office Depot and Best Buy to deliver their goods the same day that they're purchased.

 

Customers use an app to order an item on their phone or computer, and an eBay valet hand-delivers it before the end of the day for $5. The project is meant to expand to other cities further down the line.

 

Wal-Mart uses its stores as warehouses

Perhaps the most-buzzed-about new same-day-delivery provider, Wal-Mart is setting out to give Amazon a run for its money. The massive chain is shrewdly deciding to use several of its 4,000-plus brick-and-mortar locations to test run same-day delivery in Virginia, Philadelphia, Minneapolis, San Jose, Calif., and San Francisco. Wal-Mart will use UPS to deliver select popular goods for a flat rate of $10 if customers place their order before noon.

 

The use of local stores, as opposed to warehouses, provides the company with an advantage that other retailers don't have -- a dense, widespread and well-established reach across the nation. But Wal-Mart won't expand the service to all stores just yet; it's still seeing how consumers react to the option during the test phase.

 

Google mysteriously buys up a delivery service

Google continues to be vague about its latest operations, but the company recently acquired BufferBox, a service that delivers e-commerce goods to kiosks. The intention, according to an emailed statement to Bloomberg, is to help consumers save time and money. It also ensures that customers get their packages at safe locations, so there's no need to be home for delivery.

 

While this differs from same-day delivery to the home, it competes with the likes of Amazon's locker system as a method of obtaining packages delivered close by.

USPS finds new revenue with Metro Post

The U.S. Postal Service is also testing a fledgling same-day-delivery service in San Francisco. Called Metro Post, it partners with 10 retail chains, including 1-800-Flowers, that have both online and physical storefronts in northern California in order to facilitate easy same-day shipping. Consumers would be able to place an order with a retailer until 2 or 3 p.m. and receive their purchases between 4 and 8 p.m. that day.

 

According to postal regulatory filings, Metro Post is projected to generate between $10 million and $50 million in new revenue from deliveries in San Francisco alone in the coming year. If all goes well, the service could be expanded to 10 other cities.

 

Shutl and the rise of third-party start-up carriers

Several third-party startup carriers are attempting to ride the same-day-delivery wave as well. Shutl, a London firm, aims to deliver online goods within the hour of purchase. The service is set to launch in New York and San Francisco, and products will be delivered once bought online from retailers that have brick-and-mortar stores within 10 miles of the recipient's home. Foot, bike and car carriers from existing courier services will deliver the goods.

 

Other companies like Postmates started offering similar deliveries at $6.99 for more than 20,000 products from more than 3,300 stores in San Francisco last year. But with failures from other startups such as Kozmo, retailers aren't sure if the trend will bring in the sales they would like.

 

Do we need instant retail gratification while shopping online?

Same-day delivery with online shopping still has a ways to go before it's a reliable household expectation, but the trend is popping up now with a vengeance. The verdict is still out on whether or not Amazon can get ahead of the pack, or if brick-and-mortar stores like Wal-Mart will prove the most savvy of them all.

 

Readers, what do you think of the increased focus on near-instant delivery? Do you think it's a necessary option? Are there any San Francisco residents out there who have tried these beta services? Sound off in the comments below.

 

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