By Ari Kaufman, Chief Executive Officer, Placeable
Some things to consider before jumping in.
In today’s economy, there are two kinds of consumers making online purchases: one is driven by convenience, the other by economics. The convenience customer is looking to make a purchase right here, right now. For this consumer, price may be sacrificed for immediacy. They gravitate towards in-store purchases and are the primary target for the rising number of same day delivery services.
When time is not of the essence, economics will persevere. Consumers who are driven by economics are looking for the best deal. They might spend a lot of time online, searching for the best price on a product. Home delivery isn’t necessarily a benefit to them.
One question that location-based delivery brings up pertains to there being a finite amount of commerce in the world. If home delivery is on the rise, those transactions have to come from somewhere else. The rise of home delivery commerce has to have an impact on other convenience-motivated sales, for example in-store transactions. What effect is home-delivery having on in-store purchases? How often do you go into Target to buy just one thing, but leave with a full cart? With home delivery, consumers order that one thing to be delivered to their home and those extra in-store impulse buys are eliminated. What will be the impact on retailers?
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