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Should Fashion Consider Same-Day Delivery?

Ulta Beauty and Abercrombie & Fitch are the latest retailers to offer shoppers ultra-fast delivery through partnerships with courier companies. While the service isn’t yet industry table stakes, experts say it’s an effective tool for driving loyalty.
Net-a-Porter car

More retailers are investing in same-day delivery ahead of the holiday season, embracing a service not so long ago seen as too difficult and expensive for most brands to pull off.

Ulta Beauty and Abercrombie & Fitch Co. both announced same-day delivery offerings in recent weeks. Through a partnership with food delivery platform DoorDash, Ulta’s same-day option is available in six American cities and will expand in 2022, while Abercrombie & Fitch announced its own same-day delivery service late last month, tapping Uber, Shipt, Postmates and UPS-owned Roadie as couriers for its entire fleet of stores in the US. Sephora, too, launched a same-day delivery option in October after partnering with Instacart in 2020, while Macy’s, H&M and Estée Lauder have all introduced similar programmes in the past year.

In the case of Ulta, shoppers would be able to receive their purchases as quickly as within an hour. It’s an extension of the beauty retailer’s buy-online, pickup-in-store and curbside pickup programme, which were popular shopping options throughout the pandemic.

A lot of it was just guests asking us and telling us that this was what they’re looking for.

“Same-day delivery was a natural extension of [this] journey,” said Joe Rago, senior director of digital experience and product management, e-commerce, at Ulta Beauty. “A lot of it was just guests asking us and telling us that this was what they’re looking for.”

Same-day delivery is not entirely new to retail. Bike messengers in big cities have long ferried flowers, gifts and documents. Luxury retailers like MatchesFashion and Net-a-Porter have been touting same-day offerings since at least 2017, and Amazon introduced its same-day service in 2020.

In recent years, however, the explosion of the gig economy, driven by companies like DoorDash and Uber, has created new opportunities for fashion companies. Working with couriers to provide immediate delivery is often cheaper than UPS or FedEx overnight, especially when the orders can be picked up from a store close to the customer’s home. New start-ups, including 1520 and Gorillas, promise customers delivery as quick as 15 minutes, though they primarily work with supermarkets and convenience stores.

Ultra-fast delivery isn’t quite ready for the fashion mainstream. It’s not cheap, especially in light of rising wages and gas prices this year. But a growing number of retailers say it’s worth the cost because it’s what their customer wants.

“Based on our research, our customers are telling us that they’d like speed options,” said Larry Grischow, executive vice president of supply chain and procurement at Abercrombie & Fitch Co.

You have to think about it in terms of how much are you investing in turning it on.

There are plenty of holdouts who say consumers don’t need their polo shirts or sneakers with quite the same urgency as paper towels or diapers. It can also be a pricey option for customers; Abercrombie & Fitch charges $10 for its same-day option, while regular shipping is free for orders over $75. Investing in up-to-the-minute inventory management and retrofitting stores and warehouses for ultra-speedy delivery isn’t worth the effort for what is still seen by many customers as a perk rather than a necessity.

“Today, not offering same-day is not a make-or-break,” said Kate Terry, chief revenue officer of Quiet Logistics, which was recently acquired by American Eagle Outfitters. “You have to think about it in terms of how much are you investing in turning it on. But if you already have [buy-online, pickup-in-store], if you have the mechanism to fulfil an online order in a store, why not turn it on?”

The Case for Same-Day Delivery

For Ulta Beauty, the process of fulfilling a same-day order is similar to that of fulfilling a BOPIS or curbside pickup order in terms of store processes, Rago said. Implementing same-day delivery for store inventory, therefore, did not require much training for store associates.

Ohi's microfulfilment centre.

At some point down the line, however, same-day will become a common offering among most retailers, according to Terry. Her company, Quiet Logistics, invested in same and next-day delivery startup Axlehire in April, and has since been implementing these capabilities in some of its warehouses, projecting that brand clients will become increasingly interested in the offering in the coming years.

Ohi, a fulfilment startup that operates micro-warehouses for e-commerce brands and works with the likes of Uber and Postmates to offer two-hour shipping in urban areas, said it has seen order volume across its network increase 400 percent in the past year. While the majority of its brands are in the food, beverage and convenience space, the benefits of same-day delivery are similar across categories, according to Ohi founder and chief executive Benjamin Jones. Ohi works with a number of beauty brands, such as Youth to The People and SolaWave.

The Choice Economy

Shoppers today are expecting more and more choices in general for how they shop, said Sarah Willersdorf, partner and managing director at Boston Consulting Group, and this is a key reason why retailers are keen to offer same-day delivery in addition to regular shipping options.

These choices shoppers make take into account a number of factors, whether it’s speed, convenience, cost of delivery or sustainability.

For instance, Net-a-Porter offers its standard packaging for online orders as well as a more sustainable option with less materials. Amazon also introduced an option for Prime members to receive their multiple orders in a single package per week, which may entail a later delivery but would save on packaging as well as the number of deliveries. Buy-now, pay-later services like Klarna and Afterpay are also part of the growing suite of options for how consumers can make and receive their purchases.

“The most important thing for consumers is having the choice,” Willersdorf said.

For both Ulta and Abercrombie & Fitch, same-day delivery reflects this expansion of customer services.

“We want to focus on the lifetime value of the customer, to drive up customer loyalty,” Grischow said. “Omnichannel is a situation where if you execute it well, the value of the whole is greater than the sum of its parts.”

The most important thing for consumers is having the choice.

The Ripest Categories

Some brands may be more suitable for same-day delivery than others. A label specialising in occasionwear, for instance, would have more shoppers looking for a last-minute outfit than a luxury watchmaker.

Luggage and travel accessories, as well as wellness products like supplements, “have more of a time component to them than a sweater,” said Terry. “I was also talking to a brand who does date night products and they are an example of a retailer that has a great need for same-day because people are always selecting pieces for their weekend at the last minute.”

Replenishable beauty products, like skin care or shampoo, also call for fast delivery in many use cases, according to Willersdorf.

But in the holiday season, any gift category would benefit from expedited delivery, she said, including jewellery and small leather goods.

“Most people are struggling to find time, especially in a post-pandemic world, so the ability to order presents quickly and have them either same-day or next-day — that’ll make customers happy,” Willersdorf said.

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The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
Voices 2022
© 2022 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions and Privacy policy.
Voices 2022