Retailers Walmart, Amazon Rolling Out Same-Day Deliveries

by Mark Friedman  on Monday, May. 19, 2014 12:00 am  

Wal-Mart started testing same-day delivery program for online customers in 2011, and now it’s offered in three cities.

“If you move to a model where you have to pay for the gas for every individual delivery that the company’s making, it’s … not going to be as cost effective” as the deliveries that are all in a large city, Dawson said.

Retailers Cautious

Retailers, though, are cautious about offering same-day deliveries because of the failures of companies such as Webvan, said Rob Howard, founder and CEO of Grand Junction Inc. of San Francisco, which offers software to support local carriers.

He said a retailer has to have enough business to support a fleet of vehicles. “And if you don’t have a lot of volume, your cost of delivery is really high,” Howard said.

He said now that Amazon is offering same-day service, smaller retailers will probably feel the need to offer it in order to compete with the online retailer.

“If your competitor is offering a same-day delivery program and you’re not, it’s a potentially lost sale,” Howard said.

Rosenblum, of RSR, said she thinks the only reason that Amazon is offering the same-day service is to see if the retailer can make money at selling groceries.

Same-day delivery of nongrocery items “is so niche, I don’t know why you would want to do it,” she said.



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