Same-day delivery has become a key differentiator for many retailers, but as shipping costs reached record highs in 2024, industry leaders have started to question whether ultrafast delivery still makes sense for them.
High up-front costs, operational challenges and the environmental impact of same-day delivery may give retailers pause, but a recent report from Roadie found that ultimately, the long-term, strategic benefits of same-day delivery are worth the effort.
For many in the industry, same-day delivery has become an asset that distinguishes the best from the rest. Not everyone can do it, so retailers that can successfully roll out same-day delivery programs stand to gain an advantage. For one, customers like to have it as an option when making a purchase and are quick to take their business elsewhere if their needs aren’t met. While making same-day deliveries can strain your resources if logistics is not at the core of your business, many businesses still offer it.
The challenges of same-day delivery can’t be ignored, but your company doesn’t have to be left behind. By focusing on the potential costs and benefits, retailers can build a business case for same-day delivery that combats these challenges and pays off in the long run.
When to invest in same-day delivery
There are several reasons to invest in same-day delivery, but its positive impact on business financials makes the most significant statement. Eighty percent of retailers surveyed by Roadie report an increase in revenue as a result of same-day delivery, with nearly two-thirds seeing an increase of 6% or more and approximately 30% increasing revenues by more than 10%.
It’s important to note, however, that these results are likely the result of a combination of efforts. Retailers who can profitably implement same-day delivery are likely to take steps to improve operations or absorb the associated costs elsewhere. Whether that means charging a fee for same-day delivery or setting higher product prices, retailers must consider what works best for their customers to see the best results.
In addition to increased revenues, retailers who can give shoppers a way to get their orders faster are not only attracting new customers but also retaining and building loyal customers out of those who’ve made purchases in the past. More than three-quarters (77%) of leaders surveyed confirmed an increase in net new sales after deploying same-day delivery, and nearly eight in 10 companies say repeat purchases improved.
Other benefits reported include higher customer acquisition levels (45% of companies), efficiency improvements (44%), improved conversion rates (43%), making delivery a profit center (30%), lower inventory cost (27%) and reduced environmental footprint (27%).
Same-day delivery doesn’t work in every situation, though, and retailers must be aware of the consequences. Failing to meet customer expectations with late or inaccurate deliveries can damage brand reputation and customer trust. Retailers must ensure the right systems and partners are in place to maximize ROI and reduce missteps.
Retailers should also avoid making promises they cannot keep. For example, retailers with a large geographical footprint may have limited reach, as same-day delivery can be challenging in rural or remote areas. Being prepared and managing these expectations with open communication and transparency goes a long way in achieving the best customer experience for all.
Recouping the costs of same-day delivery
Despite the possible ROI, the costs associated with implementing same-day delivery are not lost on retailers. Almost half of those surveyed by Roadie report six-figure startup costs, with a median cost of $400,000, and for 79% of respondents, operating costs increased after putting same-day delivery into service.
As a result, many retailers must consider an approach to recouping or maintaining the costs associated with implementing same-day delivery. This starts with a focus on streamlining operations to reduce inefficiencies in fulfillment. The more inefficient the process is, from taking a product off the shelf to placing it on a delivery truck, the higher costs will be.
In addition to finding efficiencies at the distribution point, retailers should consider the following:
- Automation
- Direct distribution or selling directly to customers
- Micro-fulfillment
- Order consolidation
Another option is diversifying your delivery partners. While most retailers rely on traditional parcel carriers to provide same-day delivery services (80%), crowdsourcing is an affordable alternative, offering benefits other carriers can’t provide. For one, crowdsourcing is easy to deploy quickly. With Roadie, no minimum volume commitment or upfront capital investment is required. Crowdsourcing is also flexible and scalable based on demand. Drivers and delivery vehicles are ready when large numbers of unexpected orders are placed at the same time.
Retailers can also improve ROI by offsetting high same-day delivery costs in other business areas. By making better decisions about expenses, companies free up money that can be used on other customer-experience initiatives. These types of strategies include:
- Raising product prices
- Charging delivery fees
- Offering fast delivery to those who join loyalty programs
Choosing the right strategy here comes down to understanding your customer’s spending habits. Based on customer behavior, retailers can see which method works best when the trade-off is same-day delivery.
Calculating your return on investment
The concerns around implementing same-day delivery are valid, but Roadie has made it simple to prove the delivery strategy’s worth. Roadie’s Same-Day Delivery ROI Calculator helps retailers build a business case for fast delivery that benefits both your bottom line and your customers.
By tracking ROI, businesses can easily evaluate how their revenue, conversions and repeat purchases are improving thanks to same-day delivery. ROI not only acts as a measure of success but also helps industry leaders make better, data-driven business decisions.
Continuously calculating your ROI takes the worry out of same-day delivery costs while guiding decision-makers on how they can best invest in their future supply chain strategy.
