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New Survey Says Only the Affluent Are Interested In Same Day Delivery

And Only A Subset of That Market

net-a-porter-vans

Net-a-Porter same day delivery vans in New York (L) and London (R)

Just a few hours ago, we picked up on the report that Google is working on an Amazon Prime competitor that will try to differentiate itself by offering same day delivery from brick and mortar stores. According to a Boston Consulting Group survey of 1500 consumers, only 9 percent said same day delivery would encourage them to shop online more often.

“Urban shoppers aged 18 to 34 with household income over $150,000 a year – known as affluent millennials – are more interested in same-day delivery, but this group accounts for only 2 percent of the market, according to the consulting firm’s report.

Consumers said they would only use same-day delivery in certain circumstances, like when they needed to buy a last-minute gift or could not get to a physical store, the survey found.” {Reuters}

Cited by 75% of the respondents, free shipping actually topped the list of things more likely to drive online shopping, followed by lower prices.

The key to getting same day delivery to take hold seems to be a lower price for the cost of delivery. That doesn’t seem to conflict with what Google is planning. As we mentioned yesterday, the $64-$69/year service is unlikely to bring in significant revenue from subscription fees, and will probably actually lose money. Net-a-Porter, who falls perfectly into the affluent audience/high-margin product zone mentioned in the survey, offers same day delivery in New York for $25, and for no charge in London. It would only take 3 orders to exceed Google’s annual rate for the service in the US. While the London delivery service is likely still a loss leader for Net-a-Porter, it does seem to imply that the challenge of offering same day delivery at a low price point – one of the things cited as a factor in the low interest among this group – is one of logistics. i.e. Can Google, or any of the companies competing in the space, create the kind of well oiled delivery machine that takes advantage of existing delivery schedules and routes to pass along lower costs to consumers?






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