In a bid to take away one of the last remaining competitive advantages brick-and-mortar stores have over online sites, same-day delivery service is starting to take off
. The challenge for e-commerce
sites, however, is keeping prices low enough to where same-day delivery is still an attractive option. Otherwise, it could end up just another passing fad.
So says a new survey by The Boston Consulting Group (BCG). Out of 1,500 U.S. consumers surveyed on the topic of same-day delivery, only 9 percent indicated it as a top factor that would improve their online shopping experience. A whopping 74 percent preferred free delivery, and 50 percent cited lower prices. In other words, cheap and free rule the day.
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"Same-day delivery will be a niche service in the near future," said Rob Souza, a partner at BCG. "Retailers may choose to offer it to build customer loyalty, enhance brand awareness, or keep up with the competition. But it is unlikely to generate significant revenues for either retailers or carriers."
Not surprisingly, BCG identified "affluent millennials" -- ages 18 to 34 and with a household income exceeding $150,000 -- who live in urban areas as a possible target demographic. This group only represents a mere 2 percent of the market, but their online spending is typically twice as high as the average U.S. consumer.
According to BCG, affluent millennials are willing to pay up to $10 for same-day delivery, while other consumers put the cap at $6, less than what most retailers currently charge.