Chat with us, powered by LiveChat What are the characteristics of businesses that can succeed with same-day delivery? | Abc Paper
+1(978)310-4246 credencewriters@gmail.com
  

Please make sure one of your references is base on the article listed in the attachment as well. 
 

What are the characteristics of businesses that can succeed with same-day delivery?
What are the potential trade-offs when companies consider this type of service to offer to their customers?
What factors related to innovation would increase the likelihood of success and why? In formulating your response, consider the following along with any other factors that you think are important:

Does home delivery reduce any costs?
Is the location of warehousing facilities important?
Can multiple customer orders be bundled together (urban versus rural market)?
Is the inventory mix important (e.g., simple or complex)?
Are there transportation or technology advances available?

©2013 by the Kellogg School of Management at Northwestern University. This case was prepared by Professor Sunil Chopra. Cases
are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or
illustrations of effective or ineffective management. To order copies or request permission to reproduce materials, call 800-545-7685
(or 617-783-7600 outside the United States or Canada) or e-mail [email protected] No part of this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical,
photocopying, recording, or otherwise—without the permission of Kellogg Case Publishing.

SUNIL CHOPRA KEL732

The Future of Same-Day Delivery: Same as
the Past?

Although home delivery of pizza has been successful in the United States, most other same-
day delivery efforts have failed. The same-day delivery battle has again heated up with Amazon,
Walmart, and eBay launching major efforts to implement same-day delivery.

Amazon has a new game. Now that it has agreed to collect sales taxes, the company can
legally set up warehouses right inside some of the largest metropolitan areas in the
nation. Why would it want to do that? Because Amazon’s new goal is to get stuff to you
immediately—as soon as a few hours after you hit Buy.

It’s hard to overstate how thoroughly this move will shake up the retail industry. Same-
day delivery has long been the holy grail of Internet retailers, something that dozens of
startups have tried and failed to accomplish. (Remember Kozmo.com?) But Amazon is
investing billions to make next-day delivery standard, and same-day delivery an option
for lots of customers. If it can pull that off, the company will permanently alter how we
shop. To put it more bluntly: Physical retailers will be hosed.1

Walmart reacted to Amazon’s efforts by announcing tests for same-day delivery in a few
cities.

The big-box giant announced this week that it too would be offering same-day delivery,
using its extensive network of superstores as distribution centers, and shipping products
to consumers via UPS. According to a report in The Wall Street Journal, the service will
initially be available in the Northern Virginia, Philadelphia, Minneapolis, San Jose, and
San Francisco areas. The service will cost $10 per delivery, with no minimum order.
Amazon’s own same-day delivery service costs $8.99, with a $0.99 per-item shipping
charge.2

Whereas Amazon and Walmart were offering same-day delivery for products they stocked,
eBay was experimenting with same-day delivery for products it did not necessarily stock. The
Wall Street Journal reported on a customer order for which eBay sent a courier to Macy’s for the

1 Farhad Manjoo, “I Want It Today: How Amazon’s Ambitious New Push for Same-Day Delivery Will Destroy Local Retail,” Slate,
July 11, 2012.
2 Christopher Matthews, “Walmart Announces Same-Day Delivery, Tries to Beat Amazon at Its Own Game,” Time, October 11, 2012.

This document is authorized for use only by Roman Moore in WMBA-6060B-6/WMBA-6060-6/MGMT-6659-6-Marketing for Competitiveness-SEM-Term-wks-9-thru-16-
(03/08/2021-05/02/2021)-PT4 at Laureate Education – Walden University, 2021.

THE FUTURE OF SAME-DAY DELIVERY KEL732

2 KELLOGG SCHOOL OF MANAGEMENT

purchase and then had it delivered within an hour.3 The paper reported that eBay had a team of
fifty couriers in San Francisco that “fetch and deliver goods directly to customers’ doorsteps
within an hour of an online order.” eBay had also started the service in New York and planned to
roll it out in other cities. Others testing same-day delivery included the U.S. Postal Service, with a
program called Metro Post, initially offered in San Francisco.

The Iconic (www.theiconic.com.au), an Australian company selling clothing, shoes, and
accessories, offered three-hour delivery within Sydney for $9.95. It promised to have goods
picked, packed, and delivered within three hours to Sydney metro areas, between 7:00 a.m. and
6:00 p.m. on business days. Although the company was young, this service had been extremely
well received. 7-Eleven Japan was another company offering home delivery—in this case, its 7-
Meal service targeting Japan’s aging population. The service offered a menu of high-quality
meals that customers could choose to pick up at 7-Eleven stores or have delivered to their homes
or offices.

If history was any guide, the profitable implementation of same-day delivery would be
challenging. Urbanfetch and Kozmo pursued this business model during the dot-com boom.
Urbanfetch operated in densely populated areas like London, Manhattan, and Brooklyn but was
forced to shut down in Fall 2000 due to a lack of funding; Kozmo, which raised more than $280
million in funding and operated in eleven cities, folded in early 2001.

Opinions were clearly divided about the potential for success with same-day delivery. One
writer opined that “this move [by Amazon] will shake up the retail industry,”4 whereas a New
York Times article countered that “some retail analysts are questioning whether the expense and
difficulty of same-day delivery would be worth it.”5

3 Greg Bensinger, “Order It Online, and . . . Voilà,” Wall Street Journal, December 3, 2012.
4 Manjoo, “I Want It Today.”
5 Stephanie Clifford, “Same-Day Delivery Test at Wal-Mart,” New York Times, October 9, 2012.

This document is authorized for use only by Roman Moore in WMBA-6060B-6/WMBA-6060-6/MGMT-6659-6-Marketing for Competitiveness-SEM-Term-wks-9-thru-16-
(03/08/2021-05/02/2021)-PT4 at Laureate Education – Walden University, 2021.

error: Content is protected !!