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Is a Same-Day Shipping Service a Smart ECommerce Offer?

Geoff Whiting

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The eCommerce world is moving faster than ever before, and many service providers are pressuring shops like yours to offer a same-day shipping service to customers. Unfortunately for eCommerce, that’s often not only unaffordable but unworkable for the vast majority of orders and customers. We want to better understand why this demand is happening and see if you need it. Let’s start with a look at the rise of same-day shipping service offers and when they make sense.

same-day shipping service

What does a same-day shipping service mean?

Generally, when you see a same-day shipping service option, this means the carrier will deliver the order that same day it is made. This is why you’ll most often see the service on carrier websites and retail locations. Or it may be an offer from major retailers near you. So, local Target or Best Buy stores may give you this option when the products you want are in stock.

For businesses, some smaller companies now offer a same-day shipping service in your city. Services like Shipt allow local businesses and stores to sell products and deliver orders to local customers. Such options typically have a small service radius, often about 20 miles. You might have also seen this option for your own shopping if you used an app like Instacart. You can purchase groceries, health supplies, and other goods locally with same-day delivery.

What’s important is that the service provider has a local workforce — whether direct employees or contractors. These teams are already in your city or area and will drive goods from one location to another. In recent years, we’ve all seen this rise, often driven by food delivery companies expanding with more types of partners.

ecommerce sales button for same-day shipping service

Does every company need a same-day shipping service?

Many companies with a large footprint of physical retail locations now find they need a same-day shipping service or same-day delivery partner to compete. That availability can make the difference for someone choosing between CVS and Rite-Aid or Target and Walmart. Winning the sale here comes with ultimately lower margins because they’re paying for the same-day shipping service. But, it can build loyalty.

Outside of these large companies and local restaurants, same-day shipping service isn’t necessarily needed. Having a national customer base means you would need a national footprint of locations to make same-day shipping services viable for every customer. Most physical and eCommerce sellers don’t have this. Plus, it could be cost-prohibitive to expand to enough fulfillment centers to offer this to shoppers.

Creating a same-day shipping service offer also means you need to be near major metro areas. That raises the cost of warehouse space you lease, salaries, and often taxes. You also may end up paying more for shipping all other orders if it causes you to ship across more zones. It’s often more practical to create a national fulfillment strategy first, and then look for other ways to support customers.

Customer service for your retail store online

What do customers want?

In most cases, your eCommerce shop would likely be fine to offer standard and faster shipping options. They do well without pushing to offer same-day shipping services. Your online shoppers want reliability and affordability. If you don’t have your own trucks for delivery, both you and your customers will face increased costs for any same-day deliveries. Not only that, but you’ll need to adjust your warehouse (or a partner’s warehouse) to allow for individuals to come in and pick up orders as they’re made, which increases the risk of shrinkage and can create backlogs at loading docks.

So, the goal here is to ask your customers what they want and what they’re willing to pay to get. At the same time, ask your fulfillment team or partner what’s possible. You may find a lot of overlap that doesn’t come with the same high per-order costs of same-day shipping. In many cases, you’ll discover that they want a mix of fast and free shipping but won’t be willing to pay for the added costs of same-day shipping services.

That’s especially true when you look at how potentially high these costs can be depending on when a customer orders and when a product is delivered, like this example from FedEx’s online pricing tool:

FedEx pricing for same-day fulfillment service

That’s a minimum of roughly $2 more per order for shipping anything within Zone 2 when we used the same specs as one of the samples from our DIM weight calculator.

Our coverage with national and regional carrier support

Can Red Stag help me achieve faster shipping?

3PLs like Red Stag Fulfillment will often help you fulfill orders faster through a variety of methods. Our U.S. fulfillment plan with warehouses in two strategic locations is designed to help you reach more than 95% of homes in the contiguous U.S. in two days or less. That capability will meet just about every order that your store can expect.

Our guarantees ensure that your orders will be processed quickly, based on your chosen service level of Next Business Day, or a 3:00 pm EST or 5:00 pm EST cutoff. We also promise a 100% order accuracy, so there’s no time lost dealing with returns and replacements due to picking errors. Customers get the products they want quickly, without unreasonable expectations or potential frustration.

We also think it’s important to speak plainly about what’s possible for you and how you should set expectations. In the covid-era, your customers know that logistics and shipping can be difficult to time. Carrier delays are becoming more common, and their networks are facing a capacity crunch.

Promising same-day fulfillment services is especially tricky. Customers then expect the product in their hands quickly, and — because this typically comes with a high fee — they may be less willing to accept a delay. When carriers can’t meet this promise, customers may request a refund on shipping. To recoup your losses there, you’ll have to submit a claim with the carrier. This process can take considerable time.

package delivery to hands

Instead, promise what you can deliver

Don’t fall into the same-day shipping service trap that sets customer expectations you can’t reach. Not only will most of your audience not need this level but having it as an option on your site will create confusion. It isn’t affordable to offer everywhere. And, you don’t want eCommerce shoppers to misunderstand and demand it for their home.

Work with your customers and give them the reasonable, fast, and free options they desire. Promise accurate packages with tracking numbers and ongoing support. Keep shoppers excited and costs controlled. So, when you’re ready to promise even more reliable fulfillment than ever before, contact us for a faster, more accurate, and more affordable operation.

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Red Stag Fulfillment is a 3PL founded by ecommerce operators, and built for scaling businesses.

A team of fulfillment fanatics who care about our clients’ businesses like their own. We see things from our customers’ perspective, and have the guarantees to prove it.

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