It's interesting to see so many e-commerce businesses warming up to the idea of same day delivery. Kozmo.com tried a more ambitious version of the idea (1-hour delivery) back during the tech bubble, and failed when the bubble burst, but now, Amazon.com, ebay, and Walmart are all looking to offer it to their customers. There are significant and expensive logistical hurdles involved in offering same day delivery, even for a brick-and-mortar like Walmart. It remains to be seen how online businesses who choose to offer this service will negotiate these difficulties.
If anyone is up to the challenge, its Amazon. For the time being, they STILL don't have to collect sales tax in most of the states. They've even worked out deals with some states to delay collection of sales tax for several years into the future, in exchange for building vast warehouses that employ thousands in these states. These warehouses will, in turn, serve as the logistical backbone that allows Amazon to ship products even quicker to their customers.
The benefits of offering same day delivery are quite clear. It is the holy grail of convenience shopping. Shoppers have had to choose between buying online for a lower price and waiting for delivery, or driving to a brick-and-mortar and getting the product right away. With same day shipping, online retailers offer even more instant gratification than their offline counterparts. Imagine you completely forget that its your SO's birthday. You order her a gift and a nice card while you're at work, and its waiting for you at your home (or Amazon locker) by the time you get back. You don't even have to spend time and gas driving to the store.
Its still unclear, though, if same day delivery will be worth the effort for a general retailer like Amazon. Already, Amazon's position as a cost leader is eroding. No doubt, adding huge warehouses stocking tons of products across the country won't help lower expenses. Amazon's acquisition of Kiva systems could potentially cut expenses considerably - we'll have to wait and see. Most importantly (in my opinion), for many products Amazon sells, convenience isn't a huge factor. Do you really need to get a book or a TV delivered right away, or would you rather wait and get the lowest price?
That's not to say I think same day delivery is a bad idea - in fact, depending on the product, I think its a great idea. Groceries and drugstore goods, for instance, fit the model well. Time-sensitive purchases also work (e.g. air conditioners, last minute buys, and broken important stuff). Even Kozmo.com managed to be profitable in a few regions before it closed down. And while Amazon doesn't really sell these types of products yet, it wouldn't be the first time Amazon jumped into new retail sector. Will definitely be keeping an eye on what Bezos decides to do.
Anyone got any thoughts on the issue? Will same day delivery work (and if so, how), or is it over-hyped?