E-tailers embrace same-day delivery, but U.S. shoppers shrug -survey
By Alistair Barr | March 5, 2013 10:56 PM EST
Same-day delivery, one of the hottest e-commerce trends, is too expensive for most U.S. consumers, raising the risk that this turns into another online shopping fad that goes cold, according to a survey released on Tuesday.
The Boston Consulting Group recently asked 1,500 U.S. consumers what would get them to shop more online and only 9 percent cited same-day delivery. Almost three quarters said free delivery would do the trick, while half of the respondents said lower prices.
The consumers said they would pay $7.50, on average, to get a $50 online purchase delivered on the same day, the survey found. That is lower than the fees charged by most retailers and e-commerce companies now providing these services, the consulting firm noted.
Same-day delivery has become the latest retail battleground, with Wal-Mart Stores Inc, eBay Inc and several other big companies chasing Amazon.com Inc, which has been offering the service on selected items in certain cities since 2009.
Shutl, a startup backed by United Parcel Service, has offered same-day delivery in the UK for three years and will be launching the service in the U.S. in a few weeks.
The U.S. Postal Service and FedEx Corp each have recently started same-day delivery in some areas of the U.S.
But these players may find little room to make money because same-day delivery is destined to be a niche service, The Boston Consulting Group survey concluded.
"The demand for this service and the willingness to pay do not match the cost of providing it," said Rob Souza, a partner at The Boston Consulting Group, who worked on the survey and has advised companies on same-day delivery.
"We're pretty skeptical about the ability of a stand-alone business to make money from this," added Vladimir Lukic, a principal at the consulting firm, who also worked on the survey.
Urban shoppers aged 18 to 34 with household income over $150,000 a year - known as affluent millennials - are more interested in same-day delivery. But this group accounts for only 2 percent of the market, according to the consulting firm's report.
Consumers said they would only use same-day delivery in certain circumstances, like when they needed to buy a last-minute gift or couldn't get to a physical store, the survey found.
Retailers should only offer same-day delivery for a select number of products that are small, light, and carry high margins, such as electronics, office supplies, and apparel, but even for these items consumers do not usually want to pay extra to have them shipped swiftly, the report said.
All this means same-day delivery will be a niche service that retailers offer to build customer loyalty, or keep up with rivals, Souza explained.
(Reporting by Alistair Barr; Editing by Phil Berlowitz)
Most Popular Slideshows
- Still The World Champions: Team USA Overpowers Serbia, 129-92 To Win 2014 FIBA World Cup [PHOTOS]
- Pope Francis: World War III Has Started On Piecemeal
- After Win Over Maidana, Mayweather Says He Is Prepared To Negotiate A Fight With Pacquiao
- From Fat To Fit: Celebrities Who Were Overweight Before They Became The Beauties That They Are
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- iPhone 6 vs iPhone 6 Plus vs Galaxy S5 and HTC One M8: Performance, CPU and Health
- Google Release Roundup: Nexus 5 2014, Nexus 6, Nexus 8 and Android L Killer Features
- Samsung Attacks iPhone 6 Plus Through New Galaxy Note 4 Commercial: Apple Claims Imitating Galaxy Note Phablets
- iPhone 6 And IPhone 6 Plus Sold Out, New Stocks To Arrive In October
- Moto G (Gen 2) vs. Xiaomi Redmi 1S—Specifications, Features And Price Showdown
- Nexus 6, 8 Release Dates Imminent as Moto X Pre-Order Begins & Nexus 7 Deals Ramp Up
- iPhone 6 And iPhone 6 Plus Shipping Has Begun, Expected To Reach Customers’ Doorstep On Sept 19 Launch Date