Same Day Delivery: Towards a Product Replicator
13th November 1 Comment
Does anyone remember those funny machines on the USS Enterprise that produced every imaginable food and beverage item? From the Earl Grey tea Jean-Luc Picard (hands down the best Star Trek captain there ever was and will be) used to order to almost lethal Klingon cocktails – the replicators could do it all, instantly. When I read about the concept of Same Day Delivery (SDL) I cannot help but think about these 24th century machines.
If you’re dealing with electronic products such as music files, digital magazines or eBooks, things can be so simple: You identify the file you want, buy it by means of some real-time payment system – such as a credit card or PayPal – and download it to your device. Just moments after the purchasing decision, the product is ready for consumption. Instant satisfaction that would have every United Federation of Planets‘ engineer beam with pride. No wonder Apple is estimated to make about $5bn in 2012 with the App store: Purchasing an app means nothing more than clicking and entering your password.
Of course, distributing physical goods is so much harder. (If by any chance you have customers who would shell out ten-thousands of Euros for a 3d printer, you’re lucky.) You need an elaborate logistics network, software, warehouses, you name it. Amazon has clearly mastered the art of getting goods from A to B, investing heavily in their fulfillment processes. They’ve purchased companies such as Kiva Systems to further improve their processing by making use of automated mobile robots in their warehouses. Usually, products that are ordered via the Amazon site are delivered on the next day. This is the default customers have gotten used to in the past years. Buy it today, get it tomorrow is the credo we’re all used to.
But would Captain Picard be happy waiting for his scented tea for more than a day? Very unlikely. So around the world, retailers keep themselves busy with coming up with new ways of getting stuff to their customers on the same day. And this, Jen, is Same Day Delivery. In the States, especially in the San Francisco area, customers can order certain products via eBay for example and enjoy them a little later on. In a pilot project called eBay Now, retailers such Macy’s, Home Depot and Radio Shack are trying to get one step closer to the replicator dream by delivering within an hour. (Would Jean-Luc Picard be willing to wait an hour? Probably, if he’d enjoy a couple of Shakespeare sonetts and have a little chat with Dr. Crusher in the meantime.) Google is also experimenting with Same Day Delivery, allowing employees to have products shipped to their doorsteps on the same day.
Amazon is in the SDD business as well, even offering this service in Europe. In certain designated areas in Germany, for example (unfortunately, ecomPunk HQ is not included), it is possible to use the Evening Express service. This means that all orders that are placed before 11.00h are fulfilled in the same evening. And there are a number of startups which concentrate on short-term delivery services, such as Tiramizoo from Germany of Shutl from the UK who specialise in short-term delivery.
So what now?
Having things delivered on the same day is yet another step on commerce’s evolutionary ladder. A couple of years ago, being able to receive ordered goods within a week was considered fast, today over-night express is not a revolution anymore. Undeniably, the real-time web has its effects on the physical world and the perception of which span of waiting time is acceptable.
Of course Same Day Delivery has its limitations. While it seems comparably easy to install this model for urban areas, I doubt whether we will seefull coverage that also includes rural areas. Or in other words, it will take quite some time until the SDD market has reached such a size that makes it possible to cross-finance fast delivery to remote areas by lucrative urban logistics. Also, not all products will be delivered like this. Mytheresa.com, for instance, an online shop for luxury fashion offers short-term delivery in Munich, which makes perfect sense: If you spend over € 1,000 on a Burberry tote, you’re very likely to have the extra € 15,00 for a 3 hour delivery. For other, low-margin products, this wouldn’t make any sense at all.
The last example shows two important points. For one, SDD fits into the mode of spontaneous impulse-shopping: seen it, gotta buy it, gotta-for-the-love-of-god-have-it-now! Apart from some mild forms of fetishism, nobody would seriously buy office supply or toothbrushes with the same vigour, right? Also, retailers who have local stores, like Mytheresa or notebooksbilliger.de, have a vantage point because they can pick directly from their local supply and deliver products quickly. Or, if you like it more buzz-wordy, multichannel retailers have an advantage here.
I like to end this post with a quote from Jean-Luc Picard, directed at Data, which both pleases my linguist’s soul and comments on my subject: “Mister Data, your resourcefulness never ceases to amaze me.”
(Image by JD Hancock, CC BY 2.0)