Online Retailers Compete with Amazon by Offering Same-Day Delivery
By Karla Robinson
December 5, 2012
December 5, 2012
- In select cities, same-day delivery is becoming more common as companies such as eBay and Walmart try to gain a competitive edge in online sales by sending out delivery couriers.
- “Driving this proliferation is the desire to give consumers instant gratification with their online orders to drive sales, as well as giving customers another incentive to skip lines at their local retailer,” reports the Wall Street Journal. “Many of the companies are hoping to compete with Amazon, which has built a reputation for speedy, low-cost deliveries through its network of sprawling warehouses.”
- For the eBay Now same-day delivery service, eBay hires people for $12.50 per hour to drive around San Francisco and New York, picking up products and delivering them to customers. The company only charges users $5 per delivery with a minimum order of $25. The company also offered a promotion that delivers the first three orders for free and adds a $15 credit to the first delivery.
- Similarly, Walmart offers same-day delivery for $5 to $10, and the company is looking to expand into new markets next year.
- The promising same-day shipping initiative Kozmo.com, which drew venture capital interest and a $60 million investment from Amazon during the dot-com boom, fell in 2001 after trying to spread to too many markets too fast.
- “If we learned one thing, you have to take a careful approach to this, roll it out slowly and study the markets you go into first,” says Joseph Park, one of Kozmo’s co-founders who is now chief executive of online fashion retailer Bluefly.
- For the time being, same-day delivery will be a money-losing venture, no matter how many companies join in.
- “Retailers are clearly subsidizing this service to improve the customer experience,” says Needham & Co. analyst Kerry Rice. “Amazon created this monster and everyone has had to jump on board to compete.”
No Comments Yet
You can be the first to comment!
Leave a comment
You must be logged in to post a comment.