How Same-Day Delivery Can Save Brick and Mortar Retailers

Customers are getting more products delivered right to their doorstep than ever before these days. For the past decade, as the convenience, efficiency, and prominence of online shopping has expanded, it’s become increasingly common for customers to greet a package from Amazon, UPS, or the USPS when they open their doors. This process has only accelerated since the pandemic, during which customers had no choice but to shop online rather than frequenting their local brick and mortar storefronts. The penetration rate of ecommerce in the United States has jumped by 15% since 2020, reaching nearly 85% in 2024. A 97% rate is forecasted by 2029.

In the modern marketplace, in which ecommerce has become so dominant, brick-and-mortar retailers need to adapt, or else be forced to shutter. For companies with both an online and physical retail presence, the shift towards ecommerce presents inventory challenges, and new difficulties in determining how much stock to supply their brick and mortar stores with while maintaining enough product on hand at their distribution centers to meet ever-greater demand. It becomes even more difficult to determine as some customers treat brick and mortar establishments essentially as showrooms, where they can view the products they’re considering in person before ordering them online, often at a lower price. Certain retailers, such as Best Buy, have introduced a price-match policy, to help ward off online competitors and move the inventory in their stores more reliably. This combats two of the main issues physical retailers have been facing, namely price and convenience, as a customer can see the product they want, maybe even test it out at a store such as Best Buy, and ensure they’re still getting the best deal. They can also walk out of the store with the product already in hand, not having to wait the couple of days it would likely take to ship to their home.

But what about companies less concerned with external competition? For companies whose inventory difficulties are about striking a balance between their distribution centers and their own retail locations, a new solution has recently cropped up, once again as an outgrowth of the pandemic.

Food delivery services boomed during the second half of 2020 and in the years since, as restaurants pivoted to delivery models as they struggled to keep the lights on while seats were made empty. For restaurants with existing delivery services, the order demand outstripped their delivery capacities, as one or two on-staff drivers couldn’t keep up with the order surges at common lunch and dinner hours, and sat around during the lulls in between. The phone order model that had proven effective in the decades before the pandemic simply could not handle the volume brought about by stay at home necessities. This void was filled by the emergence of non-traditional third party logistics services, such as Uber Eats, Postmates, and DoorDash. While most of these food delivery applications existed well before the pandemic, the intersection of cost and convenience that would come to popularize them wasn’t yet met. With the massive surge in demand from 2020 onwards, and decrease in demand for rideshare requests, companies such as Uber invested more in developing this sector. Gig workers who previously worked as part-time taxi drivers for the apps now became food couriers, zipping around cities from restaurants to homes to keep diner lights on and customer bellies full. With social distancing measures in place, couriers would place the bags of food at the same doorsteps often cluttered with Amazon boxes. In this process, rideshare companies staffed by gig workers came to function essentially as third party logistics companies, delivering food in the “last mile” from restaurant to home. They became an integral part of the restaurant supply chain, providing in many cases the only avenue for restaurants to stay in business. This was especially true for restaurants without any preexisting delivery infrastructure, and an inability to create one during the capital-strapped times of the pandemic.

In the years since the pandemic, food delivery services haven’t wavered. Generating approximately $350 billion in revenue in the US alone, and estimated to surpass $500 billion by 2028, food delivery services are still going strong, accentuated by accompanying grocery and meal kit delivery services. Having grown accustomed to greeting a bag of food at their doorstep, customers have continued to use delivery apps even with dine-in options once again available.

Now, customers may also be getting accustomed to greeting retail bags at their doorsteps. Many retailers that boast both an online and brick and mortar presence are introducing same-day delivery options, by which products are delivered directly from a retail store to a customer’s home, rather than from a distribution center within a few days of ordering. This development will be key in helping companies maintain efficiency at the end points of their supply chains, and avoid inventory buildup in stores and inventory shortages at distribution centers. By allowing retail stores to function both as an in-person shopping option and a fulfillment center of sorts, companies can move inventory effectively even amidst the challenges posed by an increasingly ecommerce-driven market.

This same-day delivery feature is often enabled by services strikingly similar to food delivery apps. Convenience stores and pharmacies, including 7/11, Walgreens, and CVS, as well as larger retailers such as Target, already list available products directly on apps like Uber Eats, and the gig worker-driven delivery network initially constructed through food delivery is now helping retailers move products off of shelves and into homes. Other retailers contract out delivery services to companies with the existing delivery infrastructure to meet their needs. Sur La Table, for example, offers same-day delivery to customers within 20 miles of their stores, and uses Walmart GoLocal to fulfill their orders. A customer places an order on the Sur La Table website, which then gets sent to a Walmart GoLocal driver who accepts the request, drives to the Sur La Table store to pick up the order, and delivers it to the customer’s home. It’s functionally the same as the food-delivery services consumers have flocked to in recent years. This is a very important development in last mile logistics, as it benefits both companies and their customers. Customers are able to enjoy the convenience of online ordering and same-day delivery they’ve gotten used to through food delivery services and broader use of ecommerce platforms, and companies can resolve inventory discrepancies by routing more customer orders through their retail locations, without even needing them to set foot in their stores. The customer is satisfied, and the company is moving inventory.

It will be interesting to see how many more companies develop their own same-day delivery infrastructures with the intention of offering their services to other retailers, in the same vein as Walmart GoLocal. Walmart has massively built up its online presence in the past decade, offering free shipping, free same-day store delivery, and more benefits for a monthly membership fee via Walmart+, similar to Amazon Prime. Few companies have the scale and existing delivery infrastructure as Walmart, let alone the national retail presence the Arkansas-based giant has, but that doesn’t rule out smaller competitors from cropping up, utilizing the same gig-worker delivery model that has been a boon to food delivery and rideshare apps. In any case, same-day delivery made possible by app-based ecommerce may well be an important factor in keeping physical retailers afloat, and we’ll keep an eye on how this trend continues to develop.

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