Friday, May 10, 2013

Same day delivery? How about same hour delivery?

eBay now has $5 same-hour delivery in certain cities for certain items. This comes on the heels of Amazon announcing same-day delivery. Is this something food mail order companies should be worried about?

I don't think so. This is set up for self-buyers (people buying for themselves), not gift givers, and food mail order is largely a gift business. (Imagine the message it sends if a person wearing a one-hour delivery shirt shows up at your door with your birthday present.) Another reason is perishability. The way same-hour and same-day works is they need to park inventory in every city to have it ready to ship on a moment's notice. That's a real pain to do with food — at least the food people want to give as gifts — since it tends to expire at a rapid rate.

Should any business be afraid? In general it pays to be afraid of eBay and Amazon so yes, someone should be scared. If you sell commodity electronics or home goods — i.e. if you're K Mart or Sears — you might want to be extra fearful. Well, if you're one of those two you're probably already scared to death since you're so far behind in retail period. WalMart — they might get a little nervous too. They've announced same-day delivery as well, using their network of stores, but they've yet to make their online business connect like Amazon's does.

Then again maybe there's not much to worry about. Others have tried this and failed plenty of times. Most notoriously, I remember New York's Urban Fetch and Kozmo in the late 1990s. You could order a CD, a box of donuts and a pint of Ben and Jerry's (my first order) and a bike messenger would deliver them to you in an hour, often with free warm cookies! It was amazing, so amazing that it lost mountains of money and both were gone within a year.

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