If you think the battle for retail has been fierce so far, you ain’t seen nothing yet! The next battle-front will be in online retail and will feature same-day delivery service. Amazon has been testing same-day delivery in several large cities already, and now Google Shops is getting ready to join the action.
Why so much attention? According to Forrester Research, e-commerce sales will reach more than $327 billion by the year 2016, and consumers will be purchasing everything from low-dollar items such as shampoo and toothpaste, to luxury items costing well into the thousands of dollars (and soon, even cars will be purchased online). This means that quickly getting the goods to consumers is a critical value-added feature in the competitive online retail world.
Google Shopping Express is now being tested in the San Francisco Bay Area and includes same-day delivery on items purchased from retailers including Target, Walgreens, Staples, and more. The new service will rival Amazon’s popular Amazon Prime, but at a reportedly lower rate.
Google Shopping differs from Amazon in that Google does not warehouse inventory, but instead depends on retail partners to fill the orders. Google takes the order and collects payments; retailers get a valuable portal to Google’s vast user base.
More companies are entering this new same-day delivery arena: Start-up company Shutl (www.shutl.com) will soon be operating in New York, San Francisco, and Chicago. The service ideas are not new, but recent technology innovations have brought these into the realm of possibility. The question is the consumer – is same-day delivery worth a premium?
Timing is everything.
Group Activities and Discussion Questions:
1. Start with a discussion of supply chain and its importance in marketing.
2. Bring up Google’s Shopping Express site and discuss benefits/risks: http://www.google.com/shopping/express/about/3. Next, bring up Shutl’s site and discuss how the company will operate: www.shutl.com.
4. Have students diagram a supply chain/distribution model for products such as soda, bread, shoes, books, music, and furniture.
5. What is the timeline for these deliveries?
6. How does same-day delivery impact the consumer? How does same-day delivery impact the retailer?
7. Divide students into teams. Have each team develop a promotion that can keep consumers coming to brick-and-mortar stores.
8. Conversely, have each team develop a promotion to get consumers to shop online more frequently.
Source: Brandchannel.com, Ad Age Daily, 3/6/13