KEY POINTS

  • Same-day delivery is a likely source of e-commerce sales and revenue growth: Offering shoppers quick gratification means capturing online sales that might otherwise go to local offline stores. The potential is there: Four in 10 US shoppers said they would use same-day delivery if they didn't have time to go to the store. 
  • Consumers are beginning to use same-day delivery and expect it as an option. We estimate that 2% of shoppers living in cities where same-day delivery is offered have used such services, which equates to roughly 800,000 consumers. In dollar terms, we estimate that roughly $100 million worth of merchandise will be delivered via same-day fulfillment this year in 20 US cities. This figure will grow at a five-year compound annual growth rate (CAGR) of 154%, surpassing $4 billion in 2018. 
    • In a survey, one in four shoppers said they would consider abandoning an online shopping cart if same-day delivery was not an option. 
  • Deep-pocketed tech companies and startups — including Amazon, Google, eBay, and Uber — are competing fiercely over same-day delivery with prices wars and super-fast fulfillment. Traditional retailers such as Wal-Mart are also launching similar services. Consolidation is inevitable. In New York City, for example, there are at least five same-day delivery services to choose from.
  • Millennials (those aged 18-36) are the core demographic for same-day delivery services. Consumers of same-day delivery services tend to be men, live in urban areas, and earn above-average incomes. Based on these characteristics, we've identified Washington D.C., San Francisco, San Jose, and New York City as the markets with the largest demand for same-day delivery services. 
  • Same-day delivery services address very specific shopping needs that can't be offered easily by offline shops. The most common purchases that people make using same-day delivery are gifts and heavy or bulky products. People are also willing to pay more of a premium to have those products delivered the same day. For many goods, same-day delivery isn't going to be attractive: 92% of consumers say they are willing to wait four days or longer for their e-commerce packages to arrive. 

bii sameday delivery forecastBI Intelligence


SIZING THE SAME-DAY DELIVERY MARKET

Until now, one of the biggest advantages that brick-and-mortar retailers still had over e-commerce companies was immediacy. Historically, if consumers wanted to purchase something and have it right [...]