Same-day delivery is in the nascent stages in the U.S., but physical retailers from Wal-Mart to Nordstrom, as well as e-commerce sites Amazon, eBay, Google and Postmates, are in various stages of testing the service.
The reason for same-day delivery is clear: immediate gratification. It’s the leg up brick-and-mortar retailers have over e-commerce. “This highlights one of their key competitive edges,” said Matthew Nemer, a retail analyst at Wells Fargo. While Amazon’s delivery model utilizes its distribution centers, Nemer said, “The model of products being delivered from the store to the home is the better model. The only way to make the same-day delivery model work is if there’s a store. If you pick up from the retail store, it’s always going to be closer to home. This will be an incremental way to utilize the store and a tool for retailers to fight Amazon.”
Same-day delivery has relatively low consumer adoption rates — 7 percent, according to Shop.org. Nemer, who wrote a research note about same-day delivery, “Battle of the Couriers,” test-drove the various services.
Nemer sampled Wal-Mart To Go and Google Shopping Express, which are still in the beta phase. EBay Now is operating only in San Francisco, San Jose and New York; Instacart is available in the Bay Area, and Postmates is serving San Francisco and Seattle. Start-up Shutl operates in 70 towns in the U.K. and is planning to launch in 19 U.S. cities by the end of 2013. “As Amazon expands its fulfillment network, we expect it to continue to refine and expand its Local Express Delivery program, which is available in 10 cities, though not in the Bay Area,” Nemer said. RELATED STORY: Amazon Launching Men's Prestige Site >>
Despite the lack of interest from consumers, Nemer believes new models could break down resistance. “Same-day shipping provides offer a good experience, and further innovation will likely drive adoption for customers with above-average income in medium-sized cities and urban markets,” said Nemer. “It’s not a panacea for traditional retail, but it does bridge the competitive gap with Amazon Prime and could drive higher average order values.”
For the economics of same-day delivery to work, there needs to be a third-party player who aggregates it. For example, a third-party courier could be aggregating orders from Wal-Mart, Macy’s and Nordstrom.
“I don’t think the single retail model is going to be successful,” Nemer said. “[Third party] is an expensive model, but that will change as adoption rates go up. Shutl works because it’s using an existing courier network so it doesn’t have to hire its own people. Also, the couriers are doing multiple things at the same time, delivering something from Wal-Mart and picking something up to be returned to Bed Bath & Beyond. Shutl will be listed in the retailer’s checkout along with other shipping options.”
In terms of how much consumers are willing to pay for convenience, Shutl found that 5 percent of the order value is the sweet spot.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion