I don’t know about you but I loved HomeGrocer.com….. ordering my groceries in my pajamas… or at any time for that matter… then scheduling delivery right to my door. I often thought it was too good to be true. I wondered about the business model. And I was right to do so. The company failed. I mean how could it not? Pretty much if I could think of it I could order even if it was a special request – it got to the point where it wasn’t just groceries….. need pencils? Looking for a special spatula? Organic cookies? No problem. I’m a marketer so even as I ordered and they obliged I was thinking, “Are you kidding me!?” I kept wondering what their hub infrastructure was and how large was their delivery fleet. I could never quite connect the dots on the business model but I loved it.
They were actually bought by Webvan which eventually went out of business. Well retail same-day delivery is back. As an experiment last year Rachel Metz San Francisco-based blogger, and writer for MIT Technology Review, ordered Halloween candy. Seems the options are proliferating; Google Shopping Express, Amazon, Postmates, Instacart and eBay Now. Why the come back? With product pricing already highly competitive and the heightening ability of consumers to compare deals through technology the delivery experience can be a way to stand out of the crowd. And, at least the largest online retailers are flush with cash and willing to spend it and take the hit on this service. In Rachel’s experience goodies were showing up within 2 hours of ordering and Google was actually sending couriers to Target, Whole Foods and Walgreens to pick up and then deliver her items. There was a $5 delivery price for each store they picked up from. And yep the four orders she placed with Google were delivered by four separate couriers. She also tested eBay Now which promises one our delivery in New York, San Francisco and Chicago. eBay discourages small orders by requiring a $25 minimum. She thinks eBay lost money on her order of cashmere socks she purchased through them from Macys. Delivered by courier (eBay calls them valets) she discovered they were not 100% cashmere and contacted eBay by email. They sent a valet to pick them up.
I still have the same questions as before about logistics; hubs, warehousing, required fleets, number of couriers/valets. Add to that the fact that when ranked by U.S. consumer preferences of what could most improve the online shopping experience same-day delivery ranks behind free delivery, lower prices, free returns and more secure websites.
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