Is same day delivery really the “holy grail” of e-commerce?

A recent Wall Street Journal article (“Amazon, in Threat to UPS, Tries Its Own Deliveries,” The Wall Street Journal; April 24, 2014) described Amazon’s most recent efforts to get closer to the “holy grail of e-commerce”—delivery of goods the same day they are ordered—by developing its own delivery systems and, thereby, bypassing the firms that deliver most of its shipments today.

Sure, same-day delivery sounds like a great goal, particularly for a market increasingly used to immediate gratification. But does same-day delivery actually have a negative side in its impact on carbon emissions and the environment? And do consumers care?

To answer the first question, probably “yes.” Same-day delivery will likely be a challenge when building shipping density to optimize “last-mile delivery” (shipment consolidation by same street, same zip code, same city…).  Assuming we have a ways to go before drones can deliver packages to any address, this very likely will have some environmental impact.

To address the second question, we recently surveyed more than 600 North American consumers to understand the compromises they are willing to make for more sustainable delivery of products purchased online. The survey results revealed that a sustainable transportation model does rank relatively high on online consumers’ agenda, and consumers are willing to concede speed and would be willing to pay a premium to make home delivery “greener.”

More than half of the North American consumers surveyed said they are willing to pay at least five percent more for products ordered online if they are include sustainable delivery, and even more said they are willing to wait at least one extra day for climate-friendly transport such as alternative delivery windows. In fact, responses suggest consumers are much more likely to wait longer for sustainable delivery than they are to pay for it. And younger consumers in the 18-25 age group are those most willing to wait.

The results mirror a similar study of 1,100 European consumers by our partner BearingPoint. The big difference between the two regions is that US consumers are mostly unaware that such delivery options do exist and, thus, are less likely to have used them to this point.

If our survey speaks the truth about online consumers’ expectations and potential behavior, then that suggests same-day delivery may not really be the “holy grail” of e-commerce. More likely, distributors will need to strive for a comfortable balance between speed and “green” that is appealing to today’s—and tomorrow’s—e-commerce/online consumers. And they will need to do a much better job of educating consumers about the options that are available.

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Chicago, IL 60606
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