Online retailers like Amazon and eBay are trying to differentiate themselves by offering same-day delivery. Even though retailers possess advanced technology using complicated algorithms, same-day delivery programs often involve good old-fashioned elbow grease. eBay is hiring “valets” to race the streets of Manhattan and other large cities to purchase items and rush them to the customer the same-day. Valets are used to support eBay’s “eBay Now” app that offers local shopping services. The eBay Now app uses valets to act as personal shoppers, often delivering products within an hour of purchase. The eBay now effort is part of eBay’s strategy to outshine Amazon in delivery. eBay announced in October that it plans to extend eBay Now to 25 cities.
One valet explains that the job involves resourcefulness. Bulky purchases like air-conditioners or space heaters often require valets to forego their bikes for the subway or even a cab. Valets have to deliver in strange places, including restaurants and bars. Customers can pay $5 a delivery and each delivery requires a minimum $25 order. Customers can use a feature on the app that allows them to actually track the valet en route. While this labor intensive strategy doesn’t necessarily equal an immediate boost to profits, eBay does hope that “owning the moment that matters” will build a loyal customer base. eBay believes that immediate delivery is involved in creating immediate gratification.
It wasn’t that long ago that Amazon revolutionized delivery by offering overnight delivery. Amazon developed a comprehensive infrastructure of 40 fulfillment centers around the country that are “as close to customers” as possible. With 20,000 full-time employees staffing these centers, Amazon is now able to offer same-day delivery in 11 cities.
Google also offers a shopping service that uses “retail partners” to act as distribution centers to reach more customers faster.
Deliv, a start-up company, uses crowdourcing by engaging anyone with a vehicle and extra time, Deliv just announced a deal to work with mall operators to execute same-hour delivery from stores in some of the malls.
1. How are Amazon and eBay able to provide same-day delivery?
2. Does same-day delivery provide a basis for sustainable competitive advantage?
3. Is same-day delivery important to you? In which situations? Are you willing to pay extra for it?
Source: Hillary Stout, New York Times, November 23, 2013