The Same-Day Delivery concept
The internet allows people to achieve instant gratification for things that they want as they can get what they want, when they want it. All you must do is open a search engine such as Google and request the information that you were looking for. For the most part you can get what you want within seconds. This driver of instant gratification has been introduced in today’s fulfillment practices as the concept of ‘same-day delivery’.
Same-day delivery is mostly used as a tool for online companies to increase their sales. Customers are willing to pay an extra fee to get their products as fast as they can. The main reason for this is because it allows to narrow the gap of instant gratification compared with brick-and-mortar store shopping. Effectively implementing this concept does, however, require a vast number of resources which results in large companies adopting this practice for the most part, and leaving smaller companies behind as they gain a competitive advantage.
The advantages and disadvantages for companies and consumers
According to Marlin W Ulmer (Ulmer, 2017) and the EconoCourier website (EconoCourier, 2016), the same-day delivery concept comes with both advantages and disadvantages which are listed and further clarified below.
A recent article published by Fulfillmentworks (Fulfillmentworks, 2020) states there are 3 main disadvantages for both companies and consumers that correspond with the same-day delivery concept.
Same day delivery can be limiting the flexibility of companies due to disruptions in planning and order prioritization. Companies that don’t utilize the same-day delivery concept are able to adjust more easily in their fulfillment operations such as re-routing, altering contents, cancelling, and holding orders, to optimize their fulfillment strategy. Companies that utilize same-day delivery, however, do not have this flexibility as changes within the fulfillment process will result in delays which can upset consumers who paid for the same-day delivery option (Fulfillmentworks, 2020).
Efficiency is a key important factor within all fulfillment operations. A strong way to improve the efficiency in shipping is to group or batch orders, also known as consolidated shipping as this can reduce travel times. Same-day delivery limits the possibility of grouping orders as there is less time that is available to accumulate orders in your picking queue before the orders get processed.
The final disadvantage for both companies and consumers is concerning the sustainability aspect. It is inadvisable for sustainable companies to adopt a same-day delivery concept as their sustainability practices are offset by the inherit nature of the concept. 92% of consumers are more likely to trust companies that support social or environmental issues (Fulfillmentworks, 2020). This means that stressing the positive impact traditional delivery standards can have on the environment may improve your brand’s perception more than same day shipping would.
- The gain of a competitive advantage for companies
Utilizing the same-day delivery concept allows companies to gain a competitive advantage over other companies that do not make use of this concept. Research shows that consumers want to get their products as fast as they can. This reinforces the statement of gaining a competitive advantage when using the same-day delivery concept. The more companies start to make use of this concept, the more it becomes a standard for consumers. This means that an increase in utilization of this concept will also increase the necessity for other companies to adopt this concept as they are otherwise disfavored by consumers (Ulmer, 2017).
- Reduction in capital expense for companies
Companies that utilize same day delivery see a reduction in their inventory costs. The reason for this is that by reducing the amount of safety stock of items, they are able to reduce the stock warehouses hold for retail stores (EconoCourier, 2016).
- Increase in margins for companies
According to (EconoCourier, 2016), companies that offer same-day delivery also require their customers to pay an extra fee to realize this concept. This is mainly due to the extra costs associated for the abrupt same-day delivery request.
- Instant gratification for consumers
Consumers that need a specific product fast can use the concept of same-day delivery and reduce the amount of time it takes before they acquire their product. This means that they can reduce the time spent before they receive gratification by obtaining their product (EconoCourier, 2016).
There are plenty of indications that same-day delivery will become an even stronger standard in today’s fulfillment practices since companies that do not apply this concept lose their competitive advantage.
ModusLink is ready to help you understand what it would take for you to be able to implement same day delivery. We can analyze where you do business and where you want to do business and give you proposals as to the best approach, whether it’s a “universal” same day offering or a geographic dependent same day offering or some other criteria. Contact us today to begin your journey.
Umer, M. (2018). Dynamic pricing and routing in Same day delivery. Informs, 1-2.
Ulmer, M. (2017). Delivery-deadlines in same day delivery. Logistics research, September. From inventoryops: https://www.inventoryops.com/articles/same_day_shipping.htm
EconoCourier (2016, December 22). The advantage of same-day delivery to businesses and shops. From Econo courier blogpage: https://econo-courier.com/advantage-day-delivery-businesses-shops/
Fulfillmentworks. (2020, June 10). The disadvantages of same-day delivery. From Fulfillmentworks home: https://www.fulfillmentworks.com/blog/post/disadvantages-of-same-day-shipping/
Clarkec, I. D.-P. (2020). Same-day delivery with drone resupply. Informs, 1-2.
DHL, T. R. (2019, May 16). DHL . From DHL launches its first regular fully-automated and intelligent urban drone delivery service: https://www.dpdhl.com/en/media-relations/press-releases/2019/dhl-launches-its-first-regular-fully-automated-and-intelligent-urban-drone-delivery-service.html
EHang. (2021, January 29). EHang home page. From EHang: https://www.ehang.com/ehangaav
CNBC. (2019, July 15). How Amazon delivers on one-Day shipping .
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