Same Day Delivery

Same Day Delivery

Delivery start-ups have struck a chord with consumers. But brick-and-mortar retailers and parcel services could still compete by playing to their strengths. The B2C delivery market has been roiled by change in the past few years. In a 2014 McKinsey report on logistics trends, same-day delivery was considered “the next evolutionary step in parcel logistics.” Back then, a consumer survey indicated that latent demand for higher-convenience offers would give fast parcel delivery (service within 1 to 12 hours) 15 percent of the market for B2C domestic parcel deliveries by 2020. The supply side at the time, however, was just emerging. While early providers of same-day delivery gained market traction, they weren’t alone for long.

 

A new set of competitors—on-demand urban delivery providers—has since entered the B2C delivery market. These start-ups, including Deliveroo and Foodora in Europe, as well as DoorDash and Postmates in the United States, offer a different form of service: they integrate demand aggregation via their own mobile platforms with dedicated in-house operations to enable (almost) instant delivery. These innovations in the go-to-market approach and logistics model have attracted almost $5 billion in venture capital (VC) since 2014 in Western markets alone (exhibit), with leading players on average raising more than 90 percent of their total funding in that period. That’s shaking up the urban shopping and delivery landscape.

 

Source: https://www.mckinsey.com/industries/travel-transport-and-logistics/our-insights/how-will-same-day-and-on-demand-delivery-evolve-in-urban-markets

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