Retailer demand for same-day delivery service has pushed prices down to the $4-to-$50 range, according to an industry group for couriers. Another factor: Amazon (NASDAQ:AMZN) and its relentless push to drive down its own delivery costs.
"With larger companies like Amazon.com driving down shipping prices to consumers, our industry has been finding ways to meet the demand for lower prices charged to retailers," the president of the Customized Logistics & Delivery Association, Rob Johnstone, told Internet Retailer. "Our members are using more technology, and serving denser, big city areas where they can deliver for multiple customers and charge lower prices."
The group's members have historically been small courier and messenger companies that were heavy users of triplicate paper delivery orders. Now some are using mobile devices to scan the progress of a delivery. Some courier companies also offer warehousing services and, in a few cases, assembly or installation of products they deliver, Johnstone said.
That begins to close a gap in the same-day delivery process. Getting the starting price for deliveries below $5—the floor used to be $15, Johnstone said—means some medium-size bricks-and-mortar retailers can also begin to look at same-day as an option for something smaller than a major appliance, because the cost is low enough to keep customers happy and the financial risk is on the couriers.
Ironically, the couriers seem to be making more headway in driving down the cost of same-day delivery than the large retailers that have experimented with it. Those chains, including Walmart (NYSE:WMT) and Nordstrom (NYSE:JWN), have typically done same-day as an experiment and are willing to take a loss. Couriers can't afford that luxury. If couriers have really figured out how to make same-day both cost-effective and profitable—or at least a marginally profitable sideline to business deliveries, with added-value services like product assembly and setup—that could make same-day much more attractive to both customers and retailers.
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