Revenue increased 11.9% in Q1 of 2015, to $17.26 billion compared with $15.42 billion in the year-ago period.
Consumers didn’t think they needed bottled water either, notes Fluid vice president of client strategy Bridget Fahrland in a Q&A for InternetRetailer.com. For e-retailers, same-day delivery could provide a new delivery model shoppers would be willing to pay for.
What follows is a Q&A with Bridget Fahrland, vice president of client strategy at e-commerce design and technology firm Fluid Inc.:
Q. What's your digital shopping trend for 2014?
Same-day delivery. I considered try-on and return models—like Warby Parker—but I’m going with same-day delivery.
In 2014 we’ll see more same-day delivery services provided by the big guns—Amazon, Google, eBay and via start-up services such as Instacart, Munchery and Blue Apron.
I think Uber will get into this mix. They delivered kittens this year. Other items can’t be far behind
Q. What is driving this trend?
Customers expect free shipping. This puts a huge onus on retailers. Same-day delivery provides a way for retailers to circumvent this expectation and offer new a delivery model that consumers might pay for. It also allows retailers to rely less on UPS and USPS.
Q. What should smaller retailers do with this trend?
Partner with companies like Google Shopping Express or Instacart. Smaller retailers provide what the big players can’t—local flavor and differentiation. This is an advantage for retailers like Blue Bottle or even Whole Foods—and an advantage for the delivery partner.
Establishing a unique delivery system is a lot for a small retailer to do. Partnering is the way in.
Q. What should they look for in a partner?
I definitely think retailers should partner with multiple delivery systems—not just one. Take back the power a little bit – it’s good to not to throw all your eggs in one basket.
Q. What should most excite the big players about this trend?
Big retailers can now offer whole new verticals. Amazon Fresh has Amazon competing in a whole new niche. The things people want same-day are inherently different—it’s CPG, it’s grocery. It means making more money in a vertical than before.
Any brand involved needs to stay true to the consumer mindset—Google Shopping Express offers same-day from Guitar Center. Why do I need a guitar today?
I also see some brands getting inappropriately excited to be a logistics player. That’s a big undertaking. I’d be wary of taking that on.
Q. What will set these services apart from one another?
Speed of delivery. Ability to schedule time windows. Trust. Are you willing to give Google Shopping Express your garage code? Would they put a Nest in there while I’m not home?
It’s going to be about the brand I want, at the time I want, at a price that meets my needs.
Q. Who benefits most from this trend?
The environment. There will be a lot less packaging and less shipping. Delivery stays in a local area. The economy will also benefit. It will contribute to jobs in the service sector.
Laverne and Shirley would have a whole new world to work in.
Q. How will the businesses offering same-day/scheduled delivery benefit?
They will have a deeper knowledge of customers and interesting insight into the brand sphere that surrounds those customers. For instance, Instacart will know that people who buy Huggies also buy Colgate.
Q. How will you measure success of this trend?
This year, and the next few years, it will be adoption. It will be about figuring out if delivery increases purchase events or cannibalizes existing events. Will you shop Whole Foods more often or does delivery saves you the trip you would have taken?
Q. What most excites you about this trend?
It’s requiring that brands create reasons to use the services in the first place. Amazon Fresh let’s me know that I can order by 10pm and have sausage and eggs by 7am for breakfast. Now I want sausage and eggs for breakfast.
Customers may not think they need this service, but they could become addicted to it. Nobody needed fancy coffee or bottled water either. Same-day delivery is the kale of 2014.
Q. How will this trend impact digital design?
The way we think about groceries is list-based. Same-day delivery sites are currently set up like typical ecommerce sites. This is going to be their downfall. They need a new design experience. One that’s ripe for mobile.
It also involves different mindsets. Most of the same-day delivery stuff isn’t a pleasure to shop for in the real world—unless you get to stop at In-and-Out burger en route. The trend can end “Honey will you go to the store?” It will save marriages. It’s great for moms and busy professionals.
Q. What the last thing you ordered for same-day delivery?
Fluid Inc. is an e-commerce site design and technology company with offices in San Francisco and New York.