Companies see revenue bump with same-day delivery

A vast majority of companies in a recent survey reported increased revenue after the introduced same-day delivery.

The research found that 80 percent saw their revenue climb.  The study was published by Roadie in partnership with studioID, sheds light on the return on investment companies see from implementing same-day delivery.

Nearly one-third of retailers reported a revenue increase of more than 10 percent. The primary benefits cited by executives were higher customer satisfaction (80 percent), an increase in sales (70 percent), and improved retention rates (66 percent).

“Same-day delivery isn’t just a competitive advantage for retailers, although it’s a critical one. It’s also a money-maker,” said Marc Gorlin, founder and CEO of Roadie.

“To compete, retailers have to offer a menu of delivery options to let the customer choose when and how they want their purchase, each and every time they buy. But the potential payoff is clear – same-day delivery is a data-backed revenue-generating channel.”

Of the companies surveyed, most  that offer same-day delivery have done so for three years or more (63 percent), and 68 percent found their same-day delivery ROI trends consistently upward year-over-year. The survey found ROI unlocks insights that help make decisions about:

• Product and service offerings (65 percent)
• Expansion of same-day delivery in new regions (59 percent)
• Warehouse space (54 percent)
• Distribution facility locations (51 percent)
• Logistics investments (45 percent)
• Labour (37 percent)

However, operational costs rose for 79 percent of companies after rolling out same-day delivery according to the survey, highlighting the need for cost-efficient delivery models.

As a result, most companies increased their prices when they launched a same-day delivery service, but in a variety and combination of ways. While 29 percent raised the prices of their products to offset delivery costs, 24 percent offered a free trial first, 17 percent charged an annual fee, 14 percent charged a one-time flat fee, 13 percent charged a same-day fee on each order, and 13 percent charged a monthly fee. Only 21 percent did not charge customers or raise prices, and seven percent actually decreased their prices after adopting same-day delivery.

“Retailers can mitigate some of the up-front costs of a same-day delivery program by piloting with partners that can help keep start-up costs to a minimum. That can allow them to experiment, play with pricing and service levels, and optimize to ultimately find the sweet spot,” added Gorlin.

“Though operational costs might rise at first, same-day delivery opens up new potential in sales, market share, and customer loyalty.”