Now even our friends at the Wharton School of Business have weighed in on this by analyzing what went wrong in the late '90s with Kozmo in a posting entitled " Same Day Delivery: This Time it May Actually Work" - an organization dedicated to same day delivery which went out in a flash of glory - and why this time it may be different. The basis of this argument? It is all about density.
The issues remain and the questions continue to go unanswered in my humble opinion. Some of them are:
- How will you get the density?
- How will you overcome the high costs of fuel?
- Will this really generate incremental sales?
- What happens when this becomes "an expectation"?
- Will this be given away for free and ultimately put pressure on margins?
- Do people even want it (beyond the procrastinators who are probably not your best customers)?
The answer to number 6 equates to the idea of sticking a knife in a horse to get one last gallop out of it before you run it to death (i.e., What Kris Kristofferson does in True Grit). Every retailer is fighting over that last incremental dollar as if it will make or break them. My analysis suggests the amount of money spent to get that very last dollar of revenue probably is not worth it however that is what they are doing as a crowd. They want that last dollar and appear to be ready to spend a fortune to get it.
In my next posting on Same Day Delivery, I will propose a solution to this issue and we shall see what they think.