When today’s customer wants something, he wants it now (or at least, very quickly). Amazon, Target and other e-commerce giants, with their fast shipping options, have spoiled customers who once thought it was acceptable to wait a week or even longer for their shipments.
Now, instant or near-instant gratification is the norm when it comes to online shopping. In fact, it is estimated that 65% of retailers offer same-day delivery today.
Is your company and logistics prepared for same day delivery?
In this note we will tell you the importance of same day delivery, what it is, how it works and what the challenges are for your business.
The importance of same day delivery
Unless you ship from abroad, sell a custom product, or a niche item that consumers can’t easily obtain elsewhere, to compete with large e-commerce retailers, you generally have two options:
Same day delivery (tracking and monitoring).
Next day delivery
The marketing portal, The Fulfillment Lab, conducted a study in which it has been shown that 90% of consumers are willing to wait a little longer for an item if shipping is free. Many smaller e-commerce businesses, however, don’t have the luxury of taking that kind of financial hit. That is why knowing what same delivery is and how it impacts the online market is of great importance for small businesses.
So the alternative is to offer a fast product delivery process or a 24-hour delivery, because if people can’t get it for free, they want it fast (although almost 50% want it free and fast).
Today, studies show that 64% of millennials and 56% of members of Generation X are more likely to make an online purchase if same day delivery is an option (Baby Boomers are not far behind , with 40%).
Therefore, what is the positive side of knowing what same day delivery is and how to use it? The silver lining here is that if the customer can afford same-day delivery, more than 60% of consumers say they are willing to pay more for it.
What is same day delivery?
Basically, same day delivery means that the customer will receive their order on the same day it is placed. Often the order must be placed at a certain time of day for this to apply, such as before noon.
Same day means “same day”, being more specific, same day delivery translates to “delivery on the same day”.
How is effective same day delivery achieved? To deliver orders quickly and meet the agreed time and date, inventory must be fulfilled locally from distribution centers, MFCs, or stores that are relatively close to the customer.
The challenges of same day delivery
Now that you know what same day delivery is, let’s look at the challenges that await your company in the coming months.
Despite opportunities to capture market share and increase customer satisfaction, brands and logistics providers struggle to offer their customers competitive same-day delivery and fulfillment options.
To understand why same day delivery is so challenging from a business and operational perspective, it is important to review how it works:
How does same day delivery work?
Same day delivery works as follows:
When customers shop online and select items to check out, internal systems check inventory availability in close proximity to the customer. After payment, the order is sent to a driver, according to certain pre-established rules. The delivery man picks up the order from the location and delivers it to the customer on the same day.
These are the biggest challenges of same day delivery that can turn this process into a bad experience for customers:
· Limited staff (drivers and delivery vehicles).
· Inefficient or manual dispatch and routing.
· Travel distance from customers.
· Order visibility and tracking across many drivers and multiple delivery carriers.
Is your supply chain ready for same day delivery?
Did you know that if your data and resources are not connected, same day delivery can be a logistical nightmare?
Same day delivery of orders requires real-time integrations between multiple systems. For example: NorthStar Courier, order management systems, inventory management systems, warehouse management systems, and in some cases, logistics providers’ TMS.
Is there sufficient availability of drivers? If the order requires special skills or specialized delivery vehicles. For example: large items or food delivery that requires cold storage, how is shipping selected?
Operating same day delivery requires digitalized operations that use automated dispatch software and route optimization software.
