Will One-Hour Same-Day Mobile App Delivery Survive The Logistical Hurdles?

The same-day-delivery trend is not yet burning out, at least in terms of retail trials (Amazon (NASDAQ:AMZN), EBay  (NASDAQ:EBAY), Macy's (NYSE:M), Walmart (NYSE:WMT), Google (NASDAQ:GOOG), Sports Chalet (NASDAQ: SPCHA), USPS, etc.). Whether shoppers are especially engaged in same-day is a different issue, but the trials continue. Armed with a handful of drivers and some logistics coordination, transportation vendors are jumping in, too. One firm is now doing a mobile app trial in Seattle and San Francisco to promise shoppers delivery "in less than one hour."

The offer, from a vendor called Postmates (getting to be popular in the high-tech startup crowd, often for food deliveries), has a key pragmatic problem: traffic and lines. Maneuvering around any city—even on bike, as many of their couriers do—means unpredictable traffic and even more unpredictable lines and related delays.

A TechCrunch writer spent a day as a Postmates courier and wrote about the experience, including where he crashed his bike. Avoiding any commentary about the inherent physical coordination of the typical technology journalist, the bike accident is a very real issue, especially with repeated text messages from the Postmates dispatch people, messages that really do need to be read quickly. That leaves the option of repeatedly pulling over to review said messages—radically endangering the less-than-one-hour promise—and reading while in transit, which is what caused the TechCrunch writer's accident.

But even without accidents, there are so many reasons why 59 minutes may not be routinely do-able. The ideal scenario is that Postmates calls the retailer while the courier is enroute, speeding up the process. Reality being what it is, sometimes they can't get through on the phone—and sometimes the courier arrives before they complete the call, making it a waste. Sometimes things have been prepaid, other times not (couriers are issued pre-paid credit cards). Often, the courier has to work with the associate to figure out what has or hasn't been paid for. Terminals can crash. The store may be delayed in finding the item. Or perhaps they initially bring out the wrong order.

The point is that, from the courier service's perspective, that tight a timeframe is not realistic as a guarantee. That guarantee is the only thing that makes it attractive to shoppers and those shoppers are the only thing that makes it attractive to retailers.

This gets us to third-party nuance issue. Is it a better for a chain to contract with a courier service directly or to refer shoppers to a specific outfit—such as Postmates—in exchange for a revenue split? Or is it best to forego the revenue share and to hope that such a partnership will deliver more purchases? Also, will this idea ever be able to migrate to suburban and rural areas, where such services are needed the most? (There are plenty of delivery services in most major cities, making these services nice, but not essential.)

Then there's the mobile issue. This is that rare instance where there's not much functionality magic happening at the shopper's end. The consumer could just as easily—and efficiently—do this via the vendor's Web site. The mobile function with the couriers, however, can not only communicate while in transit, but geolocation makes tracking where deliveries are and coordinating who should get the 10 orders that were just phoned in (coordination with three datapoints: where all couriers are at this instant, where the new orders' pickup locations are and where the delivery point is) is a natural for mobile.

For more:
- See the TechCrunch story
- See Internet Retailer story

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