retail news in context, analysis with attitude

Bloomberg BusinessWeek reports that both FedEx and United Parcel Service (UPS) "are testing strategies for a same-day delivery market fueled by Web retailers trying to match the instant gratification their brick-and-mortar competitors offer shoppers." There are some estimates that the same-day delivery business could grow to be a $12 billion segment, triple the size of the business in 2007, the story says.

Some excerpts from the story:

"Delivery programs under way at Internet retailers such as Amazon.com Inc. and eBay Inc. signal an opportunity in business- to-consumer shipments for delivery firms where the high-value overnight market between companies has been hurt by a slower economy. It’s a space that larger companies have mostly ignored since the collapse of Kozmo.com Inc., which was partially backed by Amazon, in 2001."

"Traditional retailers are already adapting, offering same- day service through their websites to fend off e-commerce rivals. Wal-Mart Stores Inc. enlisted UPS for a holiday pilot program that charges customers a flat fee to deliver popular items such as toys, electronics and sporting goods. Conducted in four markets, the service costs $10 for buyers in northern Virginia, Philadelphia and Minneapolis and $5 to $10 for customers in the San Jose/San Francisco area, Wal-Mart said."
KC's View:
It is extraordinary how the same-day delivery option has become the hot topic so quickly ... and this does not feel like something is going to go away, because it seems directly related to hotter competition between Amazon and Walmart, and between both of those giants and everybody else.

BTW... Tom Furphy, of Consumer Equity Partners (and the guy who helped create Amazon's CPG and Fresh businesses), and I will be doing a session on Friday morning at the Produce Marketing Association (PMA) Fresh Summit, and we'll be exploring this and other issues. I hope you'll join us.