Much of the buzz in retail right now is consumed with home delivery. Online giants like Amazon and eBay are entering into the territory—literally—of brick and mortar retailers, opening warehouses in choice markets. This brings them a step closer to providing the immediate gratification inherent in the in-store purchase. But traditional retailers are fighting back with new retail formats, new technology, and also, home-delivery service.
Home delivery is not new; and same-day delivery services have been de rigueur for shoppers in the UK and Asia for many years. A decade ago, many etailers in the US tried home delivery. Start-ups abounded, but many failed. Many of them underestimated the cost and requirements for providing precise delivery. So what will be different this time?
A competitive response is required. But not doing it well can be a huge dissatisfier, jeopardizing potential lifetime relationships. In many sectors like service industries, precision-delivery schedules are a core part of their business offerings, and they make a profit at it, too. Thus, delivery is an opportunity for retailers to reorient their thinking from minimizing costs to maximizing revenue.
The decision to do home delivery is an executive decision, and needs to consider many factors of the business model not only to stay ahead of the competition, but to also remain profitable. These issues must be addressed before embarking on what can be either a huge calamity or a source of increased revenue and customer satisfaction.