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Retailers test same-day delivery

December 24, 2012

Retailers test same-day delivery
Oregon Small Business Association:

Giant retailers are offering same-day delivery in selected cities to try to gain a competitive edge. Amazon started same-day delivery several years ago, filling orders from its own warehouses.

“Amazon created this monster and everyone has had to jump on board to compete,” expert analyst Kerry Rice told the Wall Street Journal.

Walmart announced it would test same-day delivery in October in several key cities. They charge a flat $10 delivery fee, no minimum purchase required. Orders are filled from local Walmart stores and delivered by UPS. Orders must be placed before noon for same-day delivery. Most US residents live within close driving distance of at least one of Walmart’s nearly 3,100 Supercenters, giving Walmart a strategic advantage over Amazon, at least until Amazon can build more distribution centers.

E-Bay Now has also jumped on board, offering service in San Francisco and New York City. Their goal is to become a national platform for local commerce, getting goods to customers faster than any other retailer. Minimum order is $25; delivery fee is $5. When an order is placed, E-Bay Now sends a courier to shop for the item, using software that does comparison shopping in local store inventories. From the time the order is placed to the time the courier is handing the order to the customer: less than one hour.

No same-day delivery service at this time is making a profit. The point is to attract customers and get them into the habit of using a particular company’s online service. The profit will theoretically be made later.

So far, the clear leader in same-day service is Amazon, according to Time Business & Money. Amazon is willing to withstand the loss because of gains it hopes to achieve in the future.

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