Same-day delivery derby heats up with Newegg's entry

Electronics and gamer-gear retailer Newegg is the latest e-commerce player to join the same-day delivery derby, announcing today that it would roll out same-day service to parts of Los Angeles.

Speeding up delivery times is the latest arms race among e-tailers who need to match moves by Amazon and others (such as Google) who see providing nearly instant gratification as a key to attracting and keeping customers.

“It’s a defining feature,” says tech analyst Rob Enderle, of the Enderle Group in San Jose. “If you want to keep somebody at home and have them buy from you exclusively, same-day is critical. Because if I need it now, I need it now. I don’t need it tomorrow or at the end of the week.”

Online retail giant Amazon has been steadily expanding its same-day service, announcing just this month that it would add six cities – New York City, Philadelphia, Baltimore, Washington D.C., Indianapolis and Dallas — to its list of get-it-today towns. And the idea of getting goods to consumers fast is becoming a frothy field, The New York Times reports.

Newegg, which is located in Los Angeles County, says customers who order by 10 a.m. can expect their purchases to arrive by 6 p.m. The site, which appeals to gamers and those who know their way around motherboards and graphics cards, as well as those looking for fully assembled laptops, no doubt has a clientele ready for quick delivery.

Consider, for instance, that millennials are in the sweet spot for gaming-related purchases. They are digital natives, who’ve come to expect nearly instant delivery, like that provided by Amazon.

“Testing same-day delivery for our LA-based customers is something we’ve been excited about for many months,” Soren Mills, chief marketing officer of Newegg North America said in a written statement released today. “If all goes as planned, we will expand into new delivery areas.”

Newegg representatives weren’t available at the time of the announcement to talk about same-day delivery charges, if any, and the exact neighborhoods in which the service will be offered.

Given that same-day delivery is so vital in the new e-commerce landscape, you might wonder why everybody isn’t doing it. Hint: It’s not easy.

“No, not at all,” Enderle says. “For Amazon to do this, they basically had to turn delivery trucks into mini-stores, just have trucks rolling around with stock in them, of commonly-purchased items.”

It’s also expensive, requiring a new infrastructure of smaller and more local distribution centers. In fact, the same-day ambitions of Amazon and others are creating something of a building boom in places like New York, for instance, The New York Times reports.

Newegg will kick off its service with a fleet of trucks. And while I was hoping for egg-shaped vehicles, the trucks are at least flashy.

Whatever shape the trucks, the important thing, says Robyn Hannah, of PunchTab, which helps retailers wrangle data, is that Newegg is attacking a frustration that shoppers have cited in many different ways. She points to recent research from her Palo Alto-based firm, that found that shoppers want a faster, more seamless checkout process when they’re in stores. It sounds, she says, a lot like what online shoppers are saying when they demand quicker delivery.

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“What that says to me is that there’s a retail-experience problem,” says Hannah. “Customers want things more quickly. They want things more conveniently. And the retailer who can provide those experiences for brands are going to win.”

No doubt, says Enderle.

“It’s a huge differentiator for anybody who is selling online,” he says. “If vendor A has same-day delivery and vendor B doesn’t, I’m buying from vendor A.”

Photo of Newegg truck courtesy of Newegg. Photo of computer users by Ed Yourdon published under Creative Commons license

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com. Follow him on Twitter at @mikecassidy.

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Mike Cassidy, a former Mercury News business columnist, is BloomReach’s storyteller and a SiliconBeat contributor. Reach him at mike.cassidy@bloomreach.com and follow him on Twitter at @mikecassidy.