Retailers can scale back their efforts to offer same-day delivery to online customers. A new study from The Boston Consulting Group found that free delivery and lower prices significantly ranked above same-day delivery as a means to improve the shopping experience.
Only 9 percent of the 1,500 U.S. consumers surveyed cited same-day delivery as a top factor that would improve their online shopping experience; while 74 percent cited free delivery, and 50 percent cited lower prices.
The survey did find that "affluent millennials" — ages 18 to 34 and with a household income exceeding $150,000 — who live in urban areas might be an attractive market for same-day delivery. Affluent millennials are willing to pay up to $10 to receive a delivery the same day, according to the survey, while other consumers are likely to pay up to $6, less than the fee charged by most retailers today. At those rates, same-day delivery would generate between $425 million and $850 million annually in delivery revenues if — as the consumer survey data suggest — up to 2 percent of online orders are fulfilled on the day of purchase.
BCG's analysis suggests that Boston and Washington, D.C., which have large shares of affluent millennials and population densities similar to other U.S. cities, would be more promising places to test national acceptance of same-day delivery.
"National carriers are understandably looking to expand their portfolio of offerings, guard against innovative competitors and protect share from smaller, specialized players," said Mel Wolfgang, a senior partner at BCG. "But they need to be selective in their approach and test scenarios before committing to large rollouts, and they need to experiment creatively with new technologies and partnerships with regional carriers."
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