What are rapid and same-day delivery?

The digital world has no physical borders – any business can trade globally. Digital barriers, like speed, accuracy and customer experience can all be overcome with the right data and technology. But when the digital world and physical world intersect in online retail, and fibre-optic cables and IP addresses are replaced by road systems and street addresses, the task of maintaining that speed and accuracy comes with a very tight deadline.

What are rapid and same-day delivery?

Rapid delivery is any delivery that gets fulfilled very quickly after an order is placed, and usually the fast nature of the delivery is one of the key criteria for the purchase being made. A good example of a well-known rapid delivery service is Deliveroo.

Same-day delivery is a delivery that is fulfilled on the same day as the order is placed, although the timing of the delivery is often less specific. Same-day delivery is usually offered as an option alongside other speeds of delivery, with same-day delivery often coming at a greater cost. Amazon is the best-recognised example of a company offering same-day delivery as an option for its products.

What are the differences between same-day and rapid delivery?

Same-day delivery means that the delivery is guaranteed to arrive the same day but does not necessarily give the customer the option for it to be delivered as soon as possible. Rapid delivery means that the delivery will take place as a matter of urgency, potentially as soon as within the hour depending on logistics. Rapid delivery start-up GoPuff has an average delivery time of ten minutes.

The type of same-day or rapid delivery also varies. For retailers, the speed of the delivery is the key tenet of the service. However, in other cases, the need for a same-day or rapid delivery comes linked with the nature of the product. For example, corporate documents or medical goods often need to be handled by specialists and delivered directly.

In a word, no. Changing from next day to rapid or same-day delivery isn’t just about increasing scale or frequency. Next day delivery, by its nature, gives you a natural cut-off point for orders to be fulfilled (for example, any order placed after midnight on a Tuesday will be delivered on Thursday).

However, rapid and same-day delivery don’t have the same hard deadline. For this reason, it’s tricky to know when to send staff to retrieve an order. If you wait too long, the delivery won’t be completed in time, but by asking the staff to retrieve the order too soon, you will miss out on the chance to pick up other orders along the way. Furthermore, for rapid deliveries that require specific couriers, it’s hard to know where to station your staff to start with to maximise efficiency.

To use an example of how this specialism differs between rapid and same-day delivery couriers, GoPuff currently has 4,000 SKUs whereas Amazon has 350 million. Even with the disparity between the companies regarding maturity, this shows how rapid delivery requires a smaller inventory to work effectively.

What do the rapid and same-day delivery markets look like?

The rapid delivery industry was worth $4.7 billion in 2021 - a huge increase from $1.1 billion in 2020. The top three most popular ubiquitous rapid delivery apps (in terms of downloads) at present are:

• Getir – 38.1m
• GoPuff – 11.4m
• Gorillas – 4.1m

Other apps such as DoorDash, Deliveroo, and Uber Eats have more downloads but are not available outside major cities.

The global same-day delivery industry is forecast to grow to $26.4 billion by 2027. Furthermore, 36% of online shoppers have ordered online for same-day delivery from an online-only merchant within the last six months and 26% said they ordered online for same-day delivery from a physical store in the last six months.

In the UK, alcohol has the greatest share of rapid delivery, with 7% of its orders requested within the hour. Brand name food products come in second with 5% of orders being through rapid delivery, and groceries currently sit in third with 4% of orders being rapid deliveries.

In the UK, the annual market estimate for the rapid delivery industry is £1.4 billion, while the opportunity size is slated to be worth £3.3 billion. The opportunity for expansion is clear when we learn that 11.2% of customers list faster delivery as the leading aspect they would change about online shopping.

But despite this clamour for faster delivery, retailers must be mindful of the inherent costs and logistical issues before diving headlong into the field. 46% of consumers still expect a delivery to arrive within two to three days of placing the order, so understanding your customers is key when assessing the potential upside of offering rapid delivery.

Similarly, the resources at your disposal will play a crucial role. Over a third of businesses offering rapid or same-day delivery say that expectations around fulfilment in the wake of the pandemic has affected their operations.

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This article was originally published by Loqate, a GBG solution