Best Buy adds same-day delivery in 11 more markets
April 7, 2016 01:02 PM
Smartphone on the fritz? Did the vacuum finally give up the ghost? Many consumers shopping BestBuy.com can now get products delivered the same day. The retail chain this week began offering same-day delivery for orders placed by 3 p.m. local time to consumers in 11 additional metro areas.
Same-day delivery service Deliv Inc. makes the deliveries for Best Buy Co. Inc., No. 14 in the Internet Retailer 2015 Top 500 Guide, and a “get it by today” option shows up at checkout when consumers are located in the markets where the service is available. Best Buy began testing same-day delivery in November in San Francisco and in New York earlier this year. The markets where same-day delivery is newly available are Atlanta, Boston, Chicago, Dallas, Houston, Las Vegas, Los Angeles, Miami, Philadelphia, Seattle and Washington, D.C. Only products available in Best Buy stores can be delivered the same day.
Best Buy says these 13 markets cover 70% of the U.S. population, and consumers in these areas are within 15 minutes of a Best Buy store. All same-day delivery orders are fulfilled from store inventory. “Our stores also play a key role in this pilot because same-day delivery orders aren’t filled at a warehouse but at one of the more than 165 Best Buy stores in the Deliv markets,” writes John Vomhof Jr., a Best Buy spokesman, in a blog post announcing the rollout.
Best Buy made its announcement late Wednesday, hours after Amazon.com Inc. announced free same-day delivery for Prime members in 11 additional markets, bringing Amazon’s total number of same-day markets to 27. Amazon, No. 1 in the Top 500, has approximately 1 million products available for same-day delivery.
Best Buy charges an additional fee for same-day delivery based on the size and weight of the goods ordered, and says the fee typically will be $10-$20. Most products weighing up to 50 pounds are eligible for same-day delivery. Deliveries are made by 9 p.m. The fee shown at checkout today for delivering a camera in the Chicago area was $9.99.
Best Buy says same-day service is part of its growing omnichannel strategy. The retailer in 2013 began using inventory held in some stores to fulfill web orders and was using inventory from all Best Buy stores by January 2014.
“We continue to believe that strategically ship from store will go down in our history at Best Buy as one of the most important and strategic decisions that we made because it is allowing us to utilize both our online and our retail inventories to serve the online customer,” said Sharon L. McCollam, Best Buy chief financial officer, during the retailer’s Q4 earnings call with analysts. “What ship from store is allowing us to do is be able to on a consistent basis make marketing promises to customers about speed of delivery.”
This isn’t the first time Best Buy has offered same-day delivery. In 2013 it began offering BestBuy.ca shoppers in the Toronto area a service called Delivered Tonight, through which Canada Post handled delivery. Canada Post is Canada’s primary postal service.
Four-year-old Deliv operates in 17 markets and has raised $40.5 million in funding to date, including a $28 million Series B round led by UPS Inc. in February. Retailers that work with Deliv pay a delivery fee determined by how far drivers go to deliver a package, says Deliv CEO Daphne Carmeli. Drivers travel up to 15 miles from the store that fulfills the order, and retailers set their own price for the same-day service. Deliv would not disclose the fee range. Top 500-ranked retailers using Deliv include Macy’s Inc. (No. 7), Bloomingdale’s (part of Macy’s), Best Buy Co. (No. 14), Kohl’s Corp. (No. 22), Walgreen Co. (No. 44), Foot Locker Inc. (No. 54) and online florist 1-800-Flowers.com Inc. (No. 56).
Internet Retailer estimates Best Buy’s web sales for fiscal 2016 totaled $4.01 billion, accounting for 10.1% of total revenue and 11.0% of domestic revenue. Best Buy’s 2016 fiscal year closed Jan. 30.
To learn more about the alternative and expedited delivery options e-retailers are using, read the story “Giving consumers control over delivery” in this month’s issue of Internet Retailer magazine.