Online retail giant Amazon (NASD: AMZN) has led the way in the industry, pioneering much of the virtual marketplace as we know it today. In recent years the firm has sought to overcome one of the major issues in e-commerce, the delay in receiving your product, by offering same day delivery service for some products in select major markets. The offering has caught on, and competitors are now seeking to emulate that success.
E-Bay (NASD: EBAY) CEO John Donahoe said in an interview last week that his company will this year begin rolling out same-day delivery options for eBay.com transactions in which the buyer and seller are located in the same geographic area. Buyers will be able to choose immediate delivery or pick a time window later in the day to get the delivery. They will also have the option to pick their product up or opt for normal shipping. Buyers currently can only choose from traditional shipping options. EBay has been testing the same-day delivery function up to now with its eBay Now mobile app and mobile website, which let shoppers in Manhattan, San Francisco and San Jose order from stores such as Macy’s (NYSE: M), Home Depot (NYSE: HD) and Walgreens (NYSE: WAL) , and get delivery in about an hour. EBay employs the delivery person, and charges customers $5 for the service. Customers must spend $25.
E-Bay is joining a quickly crowding field in trying to accomplish this unique delivery model. Google (NASD: GOOG)recently introduced Google Shopping Express in the San Francisco Bay Area, as it looks to boost its giant local advertising business with local deliveries.
To build scale, eBay likely won’t be able to continue to do this all in house. E-Bay is at it’s core, a strong player in the virtual marketplace, helping to bring together buyers and sellers. It is not in the logistics industry, nor should it aspire to. Delivery of goods is outside their core competency. eBay has said it will start experimenting with outsourced delivery to complement its own delivery people, who are a mix of part-time and full-time employees. Donahoe said eBay could, for example, look to outsource to businesses that own trucks but have significant downtime, such as newspaper companies. He also wouldn’t rule out experimenting with a “pure collaborative consumption” model, where individuals unaffiliated with a company deliver on behalf of eBay.
What may be a niche today very well could prove to be the wave of the future. Embracing the changing times and adapting to succeed in them will be of paramount importance in the still evolving electronic market place.
