How to increase revenues with same-day delivery

Does your fulfillment operation offer same-day deliveries? What would it take to make the change? 

We’re asking because recent research has shown 80% of companies that adopted same-day delivery saw a related boost in their revenues.

The study, performed among organizations that offer the service, found revenue bumps that often outweighed the additional costs. 

In this blog we’re going to share some of their findings, and how you can leverage digital tools like dock scheduling to turn the initial costs of setting up same-day delivery into a success. 

The pros and cons

Let’s dive into what the research found. First, what are the extra costs involved in same-day delivery?

For 70% of respondents to the survey, operating costs and cost-per-order increased. And for half of them costs jumped between one and 40%.

That’s a lot of variability, and obviously it depends on factors like the scope of your operation, uptake of the same-day delivery option, increased transportation costs, and increased on-hand inventory.

Many also experienced increased order cycle times after introducing same-day.

But on the flip side, many realized tremendous benefits. We already mentioned that 80% saw revenues increase.

Breaking that down, 66% saw revenue increase by 6%, while for 30% that increase was more than 10%. 

More than three quarters of respondents also reported net new sales as a result of the service offering, while 80% experienced higher revenue per order.

This increase can be attributed to fees being charged for delivery, higher prices to cover delivery costs and/or order minimums being created to qualify for same-day delivery.

Other benefits included fewer cart abandonments, higher order values, higher conversion rates, and more repeat purchases.

Keeping tabs on results

No matter how delightful the new revenue results might be, it’s critical to keep tabs on whether you are actually making money from a same-day delivery gambit.

According to Dennis Moon, chief operations officer at Roadie, a same-day service provider and sponsor of the research: “If you’re not looking at all the critical metrics, then you’re missing out on quality data that helps drive revenue margin and company longevity.”

The areas that you need to consider include: 

• Product and service offerings – Do you need to keep more inventory on hand for fast-selling items? Conversely, are there items that are seldom purchased for same-day delivery that you can keep less of or store elsewhere? 
  
  
• Expansion of same-day to new areas – Will it pay off to expand into more geographies?
  
  
• Warehouse space – Do you need more space to support same-day delivery?
  
  
• Network design – Do you need to build micro-warehouses or bring a third party onboard to manage same-day deliveries across larger territories?
  
  
• Fulfillment technology – Does your system have enough features and capabilities to manage the growing volume of daily delivery orders? 
  
  
• Labour – Labour is a challenge. Is same-day making your workforce more or less efficient? How does that equation  interact with the question of new fulfillment technology?  
  
  

How to boost ROI using the right tools

Making a change to offering same-day delivery can seem daunting. It may mean a big increase in the speed of order fulfillment, and a lot of new pressure to meet deadlines.

Plus, if your operation is already working flat out it might seem like a very big ask indeed. 

But here’s where you have a great opportunity to eliminate inefficient processes in your facility.

One of the best ways to ensure the success of a change like this is to bring digital tools like C3 Reservations into play.

If you are still managing inbound and outbound loads manually, scheduling trucks with a spreadsheet or whiteboard, and managing your order picking and dock staff the same way, you’re in for a pleasant surprise.

You don’t have to do things that way anymore. By implementing automated dock scheduling, you’ll have visibility and control over inbound inventory like you’ve never had before.

You’ll be able to time the arrival of those truckloads of popular goods down to the minute, and ensure that you have the staff on hand to get that truck emptied and shelves replenished as efficiently as possible.

Less wasted time at the docks will give you the ability to allocate more staff power to picking and order fulfillment tasks, further increasing the success of the new same-day program. 

By eliminating the wasted time and efforts associated with manual processes, you are taking a critical step towards ensuring the success of your new same-day deliveries.

By getting it right, you’ll also boost customer satisfaction, creating an upward spiral of repeat orders and boosting revenue, just like the companies in the research study experienced.