Is Affordable Same-day Delivery Possible in Ecommerce?
In an ideal world, all of your customers would receive their online purchase mere hours after placing it, giving your ecommerce business a serious edge in a crowded market. In reality, same-day delivery continues to be the domain of nationwide retailers who have the resources to build massive fulfillment networks and reach customers wherever they are.
But this doesn’t mean that offering same-day delivery is completely out of reach for small ecommerce brands. Same-day orders may be expensive and complex to fulfill, but the near-instant gratification it offers to customers is one of the best ways to boost loyalty and retention. To make same-day delivery affordable, you need the right partnerships and strategy.
What is same-day delivery?
Same-day delivery is an expedited delivery method in ecommerce that allows customers to receive an online purchase on the same day that the order is placed. For this to happen seamlessly, an ecommerce business or third-party logistics (3PL) provider must process, pick, pack, and ship the order quickly to guarantee on-time delivery.
The on-demand nature of this service, as well as the speedy delivery method needed to achieve it, makes same-day delivery orders far more expensive and complicated for brands to execute. However, the rewards can be huge; the convenience and immediacy of such speedy delivery make it one of the best ways to boost customer satisfaction, as well as compete effectively with ecommerce giants like Amazon.
Is same-day delivery guaranteed?
Given that even standard shipping methods can face delays, it’s understandable that many consumers view same-day delivery options with some skepticism. Because same-day services demand an extremely fast turnaround from receiving an order to dispatching it for shipping, this means there is very little room for error. Same-day fulfillment must be free of any errors or delays or orders will not meet the cut-off time to achieve on-time delivery. For this reason, the delivery performance of same-day orders is often poorer than for overnight or two-day delivery.
While there are factors outside of your control that can result in delivery delays, such as adverse weather, technology failures, or errors by the shipping carrier, it goes without saying that your business should not offer same-day delivery unless you have the operational capabilities to make on-time delivery realistic.
While same-day shipping and delivery is expensive and complex to coordinate, this investment opens up some serious perks.
The benefits of offering same-day delivery
Higher customer satisfaction
It’s pretty simple; online shoppers want their purchases fast. Offering rapid delivery is an easy way to boost customer acquisition within an extremely competitive marketplace. More customers are likely to give your brand a chance if you can guarantee a delivery timeframe that matches the likes of Amazon or Walmart.
Better operational efficiency
As supply chain and fulfillment operations grow more streamlined, keeping pace with the latest innovations in shipping and delivery doesn’t only ensure that your business stays ahead of customer expectations; it has knock-on benefits on the rest of your fulfillment operation, too.
Gain a competitive advantage
If you can’t continue breaking new ground in this area, there’s a high risk that your business will fall further behind competitors and lose market share.
Is same-day delivery a good fit for your business?
Although the same-day delivery market is expanding rapidly, being able to deliver orders ASAP might not be the right fit for your business – or your customers. The questions below will help you to determine whether same-day services are worth the investment:
Is expedited shipping popular with your customers?
Same-day delivery is an expensive and complex delivery service to coordinate, so there’s little point in adding same-day shipping and delivery to your online store unless there is strong demand for it.
If the majority of your customers are selecting standard or free shipping options, this may be a sign that cost is more important to shoppers than delivery speed. Consider sending out customer surveys to see whether your current customers would be interested in a same-day delivery service – and if so, whether they would be willing to pay for it, and how much. This will give you a good sense of whether customer expectations align with your delivery performance and capabilities.
Does same-day delivery align with your product assortment?
Some product categories will benefit more from same-day delivery options than others. For example, perishable goods such as groceries and medical supplies require same-day delivery to maintain product integrity. There are other product categories where offering same-day delivery is not required but may be compatible with consumer needs.
For example, beauty retailer Sephora now offers same-day delivery in as little as two hours, allowing customers to place rapid orders if they need a new product at short notice, such as for an event. If you sell a lot of gift products, your customers may prefer same-day delivery to ensure they receive their purchase in time for a special occasion, like Valentine’s Day or Christmas.
Can you offer same-day delivery to all of your customers?
Same-day delivery services can be easier for local businesses to implement, as their customer base tends to be located within a close radius of their facility or storefront. Nationwide businesses – depending on whether they are operating a single fulfillment center or a multi-node fulfillment strategy – may find that guaranteeing a same-day delivery schedule is only possible for customers in specific metro areas, while customers at a further distance may have to select next-day delivery.
Will you need to charge for same-day delivery?
The answer to this question hinges partly on your answer to the previous one. If your customers are all located close to your fulfillment center (let’s say within a 5-mile radius) then it may be possible to offer same-day shipping and delivery for free due to the short transit time. However, free same-day delivery to customers who are located outside of this radius may prove too costly, especially for small ecommerce businesses. In this case, you may have no choice but to pass on some or all of the shipping cost to the customer. While this may be offputting for some consumers, this needs to be weighed up against the benefits of offering more choice and flexibility in delivery options.
In sum, whether offering same-day delivery is a competitive advantage for your business depends on several factors, including target audience, inventory selection, operational capabilities, and fulfillment location. Even if all of these factors are in your favor, there are still several challenges that your business needs to reckon with to offer same-day delivery.
Common barriers to offering a same-day delivery service
If same-day delivery was easy, every e-commerce business would be doing it. But, the reality is that there are challenges that come along with fulfilling same-day orders.
Same-day delivery will undermine profitability
This is the most common challenge that prevents businesses from offering fast shipping methods. The faster the delivery speed, the more an order will cost to ship. Given that online shoppers are very reluctant to pay for shipping in ecommerce, you may find yourself under pressure to foot this cost yourself, which erodes profit margins. In addition to the cost of shipping, operational investments like more labor, automation technology, and additional facilities can put same-day delivery out of touch for small ecommerce businesses.
Meeting shipping cut-off times
To achieve on-time delivery, same-day delivery orders must meet a specific cut-off time. Otherwise, there is not enough time left in the day for orders to be delivered. Often, this cut-off is extremely tight – if your business guarantees same-day fulfillment and delivery on orders placed before 12pm, this gives you only a few hours to pick, pack, and ship orders. Even minor inefficiencies in your order fulfillment process can derail delivery performance.
Small shipping coverage
If your customers aren’t based in one densely populated area, this makes offering same-day delivery a lot more challenging for your business, especially if you only have one fulfillment center dispatching orders. Customers located in rural areas or a long way from your facility may not be candidates for same-day delivery, as shipping is either too expensive or not fast enough to make this guarantee realistic.
Making same-day delivery scalable
It’s easy to offer same-day delivery when your order volumes are small and each order can be filled on-demand. But when your business grows or hits a peak demand period like the holiday season, this can put your fulfillment operation under serious strain. If you can’t scale seamlessly to meet increased demand, this can lead to decreased customer satisfaction and damage to your brand’s reputation.
Lack of integration between systems
Offering same-day delivery requires various technology systems to share information seamlessly and in real-time, including order management, inventory management, shipment tracking, and more. A minor delay in processing or transmitting an order to the warehouse to begin fulfillment can result in that order being delivered late.
How partnering with a 3PL enables brands to achieve same-day delivery speeds
Leverage a nationwide fulfillment network
A 3PL with numerous facilities can help you implement a more comprehensive same-day delivery strategy that uses multi-node fulfillment to increase geographic coverage. Multiple fulfillment and delivery nodes reduce transit times and achieve better route optimization, enabling brands to more customers in less time – and for a lower cost. This puts same-day delivery in reach (literally) of customers all over the country
Benefit from economies of scale
Partnering with a 3PL is more cost-effective for smaller brands than investing in their own fulfillment infrastructure without the guidance of industry experts. By outsourcing fulfillment, brands can benefit from the scale of a larger partner to reduce their overhead costs and invest resources more efficiently into fast delivery options.
Scale same-day fulfillment with ease
With a 3PL, you don’t have to worry about accommodating fluctuating order volumes and seasonal spikes in demand. Your fulfillment partner can scale storage space, labor, and processing timeframes operations up or down based on your exact business needs, without having to invest in additional infrastructure or resources.
Track same-day shipments in real-time
A 3PL with an advanced technology stack can streamline order management and fulfillment so you always know the status of your same-day orders. By integrating with the 3PL’s systems, you can check inventory levels, track shipments, and monitor efficiency to ensure seamless same-day delivery.
Same-day delivery with ShippingTree
ShippingTree offers same-day delivery throughout the Los Angeles area, a major customer and transportation hub that gives ecommerce businesses a serious competitive edge. Your inventory is fast-tracked from our warehouses to one of our micro-fulfillment centers in Los Angeles, so customers within a 15-mile radius of your inventory’s location can select same-day delivery. In return, your business benefits from an 8% increase in conversion rates and a 34% increase in AOV!
Find out more about ShippingTree’s same-day delivery service here.
