CASE STUDY The Future of Same-Day Delivery: Same as the Past? Although home delivery of pizza has been successful for 2015. eBay killed its same day delivery service eBay decades in the United States, most other same-day delivery Now, an indication that it was unlikely to be profitable. efforts have failed. Around 2012, the same-day delivery Instacart, a San Francisco bused company, was val- battle again heated up with Amazon, Walmart, and eBay ued at over $3 billion with a model where its employees Launching major efforts to implement same-day delivery shopped for groceries for customers and delivered them to and new players like instacart setting up operations their door. Instacart operated in most major cities in the US. In 2017, Amazon claimed to offer same day delive and had over a hundred partnerships with grocery retailers ery to its prime members in over 5,000 cities on "over a including Whole Foods and Costco. This partnership million items with qualifying orders over $35. While it offered the retailers an opportunity to compete with Ama- was not clear whether Amazon was making any profitszon in terms of responsive home delivery. While Instacart on such deliveries, some pundits felt that if it succeeded had grown rapidly, it had not generated profits until 2017. in offering same day delivery at low cost to its custom The Iconic, an Australian company selling cloth- ers, Amazon would seriously damage the prospects of ing, shoes, and accessories, offered three-hour delivery physical retailers. within Sydney for $9.95. It promised to have goods Walmart reacted to Amazon's efforts in 2012 by picked, packed, and delivered within three hours to Syd- announcing tests for same-day delivery in a few cities ney metro areas, between 7:00 a.m. and 6:00 p.m. on including Northern Virginia, Philadelphia, Minneapolis, business days. Although the company was young, this San Jose, and San Francisco. By 2017, it had shifted its service had been extremely well received. Seven-Eleven delivery focus to free same day pickup from its stores Japan was another company offering home delivery in along with free 2-day shipping to its customers this case, its 7-Mcal service, targeting Japan's aging Meanwhile, eBay experimented with same-day population. The service offered a menu of high-quality delivery for products it did not necessarily stock. The meals that customers could choose to pick up at Seven- Wall Street Journal reported on a customer order for Eleven stores or have delivered to their homes or offices which eBay sent a courier to Macy's for the purchase If history was any guide, the profitable implemen- and then had it delivered within an hour. The paper tation of same-day delivery would be challenging. reported that eBay had a team of fifty couriers in San Urbanfetch and Kozmo pursued this business model dur- Francisco that "fetch and deliver goods directly to cusing the dotcom boom of the late 1990s. Urbanfetch oper- torners' doorsteps within an hour of an online order." In ated in densely populated areas such as London, Manhattan, and Brooklyn, but was forced to shut down in the fall of 2000 owing to a lack of funding: Kozmo, which raised more than $280 million in funding and operated in eleven cities, folded in early 2001. Opinions were clearly divided about the potential for success with same-day delivery. One writer opined that "This move [by Amazon) will shake up the retail indus- try," whereas a New York Times article countered that "some retail analysts are questioning whether the expense and difficulty of same-day delivery would be worth it. 1. Why has same-day delivery of pizza been successful, whereas the practice has failed in other settings (e.g., Kozmo.com, Urbanfetch)? 2. Under what conditions can same day delivery be offered at low cost? 3. What are the characteristics of businesses that can succeed with same-day delivery? Can Amazon, Walmart, or Instacart succeed with same-day delivery