Same day delivery: Opportunities and challenges for retailers

According to a McKinsey study, the market for same-day delivery is set to grow to three billion euros by 2020. Competition between online retailers has been heated for quite some time. Who can supply the customer with their orders the fastest? New distribution centers are emerging in the best inner city locations in order to be as close as possible to the customer.

Amazon is, once again, one of the trailblazers. Modern distribution and logistic centers are growing in city center locations in Berlin and Munich to maximize convenience to the customer and provide same-day delivery, sometimes even within the hour. These distribution centers however no longer sprawl over many square metres but have taken over outdated retail and storage space reaching over several storeys. Certain products, depending on the delivery address, are packed within an hour or two and brought to the customer’s front door by courier. What is more, you can track your own “personal” delivery driver by GPS and find out precisely where he is at any one moment.

Munich startup Tiramizoo has turned same-day delivery into a reality for several German online and retail stores. Lodenfrey, Notebooksbilliger and electronics retailers MediaMarkt and Saturn, for example, are able to integrate delivery directly into the online shop. Rapid delivery however comes at a price. Whereas for Amazon Prime Now at least 20 euros must be spent, Tiramizoo charges at least 9.90 euros for delivery within a same-day two-hour timeslot. The amount ultimately depends on parcel size and distance.

SportScheck offers same-day delivery in collaboration with its partner Liefery. For 5.95 euros any customer can have their in-store purchases delivered the same evening easily and conveniently. Municipalities have been taking initiatives too: In Stadtlohn, 12 retailers have joined together and founded SMS-StadtMarketing Stadtlohn e.V. the first ”carry-home service” in North Rhine Westphalia. Customers can try on and examine goods as usual and get advice in the store. Then they can have their purchases delivered conveniently to their home, free of charge, saving themselves the trouble of carrying bags around.

One of the biggest German marketplaces for products from physical retail stores, LocaFox.de, offers customers same-day delivery within an hour and a half if they make their purchases within the Berlin S-Bahn circle and want their products delivered within the same area. Transport, as with Amazon Prime Now, is by specialist courier. This platform enables customers to search for products they want from currently more than three million articles offered by 3,000 retailers in eight major German cities, to compare prices and see at once what shops nearby stock the products. Same-day delivery is available for 160,000 of these items. By contrast with other providers, dispatch is comparatively cheap. The price for same-day delivery is five euros.

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Florian Schöps

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