Drive-thrus, Uber and same-day: Is this the new normal for retail?

JULY 2, 2015 | BY ADAM FORREST

With consumers’ “I want it now” mentality, today’s retailers seem to be investing in ways to get products to customers faster. Retailers are scrambling to get their products to customers with overnight, same-day, four-hour, one-hour and other delivery options. Such offers help on two fronts: they satisfy the needy customer and give the perception that one retailer is offering more options than others to differentiate the brand. But the question is: Is this the new normal for e-commerce, or is it a PR ploy to gain mindshare of consumers while only having to minimally deliver on this option?

Nordstrom recently announced its new option to allow customers the option for curbside pickup. Customers buy something online, text or call the store when they’re getting close, and a Nordstrom associate will run items out to their car when they arrive.

Ridesharing service Uber plans to launch a same-day delivery service through its UberRush couriers and Uber drivers, according to TechCrunch. With a few simple taps shoppers can enlist the services of an Uber driver who will pick up one or several items at a location they specify and then deliver them to a second location. Neiman Marcus, Louis Vuitton, Tiffany’s, Cohen’s Fashion Optical and Hugo Boss are all reportedly interested in this service.

And let’s not forget about Amazon, with its latest introduction of Amazon Prime same-day shipping to 14 metro areas in the United States, with at least 1 million products eligible for quick delivery. Amazon is uniquely equipped to ramp up service levels to impatient consumers, to the point where same-day delivery becomes almost the status quo in heavily populated areas. In the same-day delivery wars, only Amazon.com has the best chance for survival, despite the huge capital requirements involved.

Nordstrom has offered the buy online, pick up in store option since 2008, and will now have a store associate on hand to deliver the package to the customer curbside upon arrival. Sounds great right, Nordstrom has always had amazing customer service. But doesn’t Nordstrom value the relationship with the consumer more than a drive through pick up? Will the convenience of not having to park your car encourage repeat purchases, or does Nordstrom have a bigger plan for this service in the future. Perhaps to hold bags while customers continue shopping or pick up tailored items at a later date – we’ll have to wait and see.

Uber continues its pattern of using technology to disrupt a relatively safe business category, this time the courier service. If you work in or frequent Manhattan, you know that bike couriers are often the fastest way to get physical goods through the traffic jammed city. Most often used by businesses to do deliveries, UberRush now has brought the courier service to the masses through the ease of mobile technology. Consumers will be much more likely to try using courier service for everyday needs, like picking up items purchased on line, if they can easily schedule the pick up on mobile, pay through mobile and track the pickup and delivery of the item. With relatively low rates (about the price of a cab/Uber in Manhattan to go pickup the item) this service in major metros could see some serious pickup from consumers.

Amazon, well Amazon continues to spend lots of money and lots of media airtime on speeding delivery. From opening a store in Manhattan to Prime same day delivery to the noise of drones – Amazon is making sure that all consumers are aware of the investments they are making. A major step in actually showing consumers they can do this was the introduction of same day delivery for Prime products and consumers in 14 metros and has rolled out one-hour delivery in Manhattan. Products above $35 will get free delivery and less than that will have a $5.99 delivery fee. Now that is less than an Uber delivery, but does it have the assortment you want for an additional fee, or are you ok with going a day or two to get your item? That question still remains.

Nordstrom has always been on the forefront of innovation and could be onto something, Uber continues to disrupt and Amazon will continue to spend lots of money for customer retention. But based on a recent consumer survey only 14% of consumers really want same-day delivery of the items they purchased online. I believe this trend is a bit ahead of its time.

Eventually I think retailers will likely find that offering these types of services is too expensive to sustain. In the meantime, retailers will benefit more from the PR buzz and goodwill from customers more so than the use of the service itself.