CASE STUDY
The Future of Same-Day Delivery: Same as the Past?
Altho ugh home delivery of pizza has been successful for
decades in the United States, most other same-day delive1y
efforts have failed. Aro und 201 2, the same-day de li very
battle again heated up with Amazon, Walmart, and eBay
launching major e fforts to implement same-day deli very
and new players W<e I.nstacart setting up operations.
In 20 17, Amazon claimed to offer same day deli v-
ery to its prime mem bers in over 5,000 c ities on "over a
millio n ite ms w ith q ual ifying orders over $35."4 Wh il e it
was not c lear whether Amazon was making any profits
on such deliveries, some pundits felt that if it succeeded
in offering same day delivery at low cost to its custom-
ers, Amazo n wou ld serious ly damage the pros pects of
physical re tailers.
Wa lmart reacted to A mazon's efforts in 201 2 by
announc ing tests for same-day deli very in a few c ities
including Northern Vi rg inia, Phi ladelphia, Minneapolis,
San Jose, and San Francisco. By 2017, it bad shifted its
de livery focus to free same day pickup from its s tores
alo ng with free 2-day s hippi ng to its customers.5
Mean while, e Bay experimen ted with same-day
delivery for products it did not necessaril y stock. The
Wall Street Journ al re ported o n a c ustomer o rde r for
whi c h e Bay se nt a courier to M acy 's fo r the purchase
and then had it de livered w ithin an hour.6 The pape r
reported that e Bay had a team of fifty couriers in San
Francisco that "fetch and deliver goods d irectly to cus-
tomers' doorsteps within an hour of an online order." In
4 Sunil Chopra. Supply Chain Management: Strategy, Plann ing, and Operation. 7th Ed., © 20 19. Pearson Education. Inc., New York, NY.
5
Sunil Chopra, Supply Chain Management: Strategy, Planning, and Operation, 7th Ed.,© 20 19. Pearson Education, Inc.. New York. NY.
6 Greg Bensinger, "Order It Online, and ... Voila," Wall Street Journal, December 3, 2012.
20 15, eBay killed its same day delivery service e Bay
Now, an ind ication that it was unlikely to be proti table.
Instacrut, a San Franc isco based company, was val-
ued at over $3 billio n with a model where its employees
sho pped for groce1ies for customers and delivered them to
their door. lnstacaJt operated in most major cities in the U.S.
and had over a hundred partnerships with grocery retailers
inc luding Whole Foods and Cos tco. T hi s partn ership
offe red the retailers an opportunity to compete with Ama-
zon in te rms of responsive home delivery. While lnstacart
had grown rapidly, it had not generated profits until 20 17.
T he Iconi c, an Aus tralian company selling c lo th-
ing, shoes, and accessories, offered three-hour delivery
w ithin Syd ney for $9 .95. It promised to have goods
picked, packed , and del ive red w ithin three hours to Syd-
ney metro a reas, between 7: 00 a. m. and 6:00 p.m. on
busine ss days. Alt hough the company was young, thi s
service had been extremely well received. Seven-Eleven
Japan was another company offering home delivery- in
this case, its 7-Meal se rvice, targetin g Japan's aging
population. The service offered a menu of high-qua lity
mea ls that customers could c hoose to pick up at Seven-
Eleven stores or have delivered to the ir homes o r offices.
If his tory was any g uide, the profitable imple me n-
ta ti o n of sa me -day del ivery would be c hall e ng ing.
Urban fetch and Kozmo purs ued this business mode l dur-
ing the dotcom boom of the late I 990s. Urbanfetch oper-
a ted in de nsely populated areas s uc h as London ,
440 Chapter 14 + Transportation in a Supply Cha in

Manhallan, and Brooklyn, but was forced to shut down
in the fall of 2000 owing to a lack of funding; Kozmo,
whic h raised more tha n $280 million in funding and
operated in eleven cities, folded in ear ly 2001.
Opinions were clearly divided about the potential
for success with same-day delivery. One writer opined that
" this move lby AmazonJ will shake up the retail indus-
try,"5 whereas a New York Times article countered U1at
"some retail analysts are questioning whether the expense
and difficulty of same-day delivery would be worth it." 6
Study Questions
1. Wh y has same-day delivery of pizza been successful,
whereas the pract ice has fa iled in o ther setti ngs (e.g.,
Kozmo.co m)?
2. Under what conditions can same d ay delivery be offered at
low cost?
3. What are the characteristics of businesses that can succeed
with same-day delivery? Can Amazon, Walmart, o r Tnsta-
cart succeed w ith same-day deli very? Which model is
likely to do better? Why?

5 Farhad Manjoo, "I Want lt Today: How Amazon'sAmbitious New Push for Same-Day Delivery W ill Destroy Local Retail.'' S/me, July I I , 20 12.
6
Stephanie Cliffo rd, "Same-Day Delivery Test at Wai-Mart," New York Times, October 9, 20 12.