Same-day delivery: Has the future trend already been canceled?

A convenience paradise for online shoppers and a guarantee for smoky soles for online retailers: Ordered in the morning, delivered at noon - that's same-day delivery. A few years ago, same-day delivery was all the rage in e-commerce. What does it look like today? Who offers same-day delivery, and do you need to integrate Speedy Gonzalez-style delivery into your store service?

Small spoiler: This blog post takes the foot off the gas pedal.

The short-lived hype surrounding same-day delivery

In 2014, the consulting firm saw McKinsey same-day delivery as the game changer in retail logistics and predicted that the market for same-day deliveries in Western Europe would grow to around three billion euros by 2020.

This prediction collapsed like a soufflé taken out of the oven too quickly. DHL, DPD, Hermes - all of them have since scrapped their same-day delivery offer.

The reason for this is simple: the demand is not there. German consumers are not keen on having everything delivered on the day it is ordered.

When same-day delivery makes sense, when it doesn't

However, this does not mean that there is no justification for same-day delivery. But it depends entirely on the product.

Delivery services such as Gorillas make this clear. With the slogan "Faster than you", Gorillas offers same-hour delivery of groceries within minutes. If you want to cook dinner and you're missing a few ingredients, that makes sense. Next-day delivery is then not an option.

The same applies to certain medicines or, in the B2B sector, office supplies such as printer paper. Some things are simply needed quickly. But for most products, same-day delivery is not worthwhile for either customers or retailers.

The effort for retailers is enormous. In addition to the organizational effort, logistics costs a lot of money, which has to be passed on at least partially in the price. However, most customers are not willing to pay this because the benefit is too small.

Under what conditions can retailers offer same-day service?

At the end of the day, same-day delivery is a question of profitability. And not just for the buyers.

For retailers, it is crucial that the delivery volume is large enough to reduce average costs. Four conditions must be met to enable same-day delivery:

1. The products must be available locallySame-day delivery is actually only an option for metropolitan areas where the storage location and sales market are close to each other.
2. IT must work to the secondRetailers need a real-time overview of their stock levels so that only goods that are actually available for same-day delivery are displayed during the ordering process. For most store operators, this means additional investment in their IT infrastructure.
3. The picking and packing processes must be fast-paced: Same-day delivery providers have found that considerable investment in logistics is required to shorten the lead time. And the learning curve is steep. Retailers could use the introduction of click and collect as a preliminary stage to practise rapid processes.
4. Delivery services need maximum agilityLast mile delivery must be flexible enough to pick up and deliver orders ad hoc or several times a day.

So it turns out that there are major hurdles to overcome before same-day delivery becomes a successful reality. But the good news is: unless you sell fresh fish, of all things, next-day delivery should be good enough.

Conclusion: next-day delivery beats same-day delivery

Same-day delivery is a good example of how online retailers don't have to jump on every bandwagon that rushes through the e-commerce landscape.

If you simply free your mind from the 0 o'clock barrier that separates two days, things look very different anyway. Very often, orders that are received no later than the evening before are delivered the next day.

This is then formally Next-Day-Delivery. But since no 24 hours have passed, it is de facto same-day. Perhaps this is another reason why it is quite rational for both customers and retailers to shy away from the additional costs of "real" same-day delivery.