BIZMOLOGY — The country’s leading retailers are gearing up for a major-league battle over same-day delivery service for items ordered online. But the better question may be: Do today’s shoppers even care about the faster service?
A newly released study from The Boston Consulting Group reveals only 9 percent of US consumers think same-day delivery would be a key factor to improving their online shopping experience. Consumers instead selected free delivery (74 percent) and lower prices (50 percent) as key factors.
While Amazon.com has offered same-day delivery of certain items in selected cities for several years, more companies have entered the market in recent months. Why? Same-day delivery could generate up to $850 million annually in revenues, according to The Boston Consulting Group, and companies want to earn shoppers’ loyalty early on.
Who else has joined the same-day delivery party? Google reportedly has started offering it through its Google Shopping Express program. Startups like Shutl and delivery companies including FedEx have also started serving the niche. Wal-Mart began testing same-day service in select markets in fall 2012.
While most online shoppers are not ready to hop on the same-day bandwagon, there is one small but wealthy consumer group willing to pay a premium for same-day delivery: the “affluent millennial.” These shoppers aged 18 to 34 have a household income over $150,000 and live in urban areas. Willing to pay up to $10 for same-day service, this coveted demographic makes up 2 percent of the market, but spends two times more than the average US consumer, according to the Boston Consulting study.
Until the typical online consumer is willing to pay a premium price for fast service, same-day delivery services will have to compete for the attention of the digitally savvy and luxury-minded affluent millennial. The good news is that this select group is typically among the first to adopt new technologies and could be swayed by same-day convenience. Especially for the latest designer find that they can’t wait until tomorrow to try on.